European Union Gazettes ECJ Preliminary Ruling on Spanish Input VAT Deduction Rules for Business Gifts

The European Union Official Gazette May 26 published the European Court of Justice (ECJ) preliminary ruling for Case No. C-515/24, on input VAT deductions for gifts to clients. The taxpayer, a Spanish company, purchased event tickets as gifts for clients. The tax authorities denied input VAT deductions, citing VAT legislation that excluded input VAT deductions for goods and services used to show appreciation to clients, customers, salaried employees, or third parties. Upon request for a preliminary ruling, the ECJ held that EU Directive 2006/112/EC, on the common system of VAT, must be interpreted as not precluding domestic legislation that enters ...