V1.230B Fiscal neutrality

The principle of fiscal neutrality is not, in practice, a single principle, but two or more related, but distinct ones. No complete definition of the principle has ever, it appears, been attempted; Lindsay J got closer than most when he said1:

“The ECJ does little to help by failing to refer to some locus classicus as to that principle. I may be alone in finding references to it as varying in emphasis depending upon its context; sometimes it seems to direct one to the way in which VAT is intended to be passed on, by way of deductibility, supplier to supplier, until it is finally and irrecoverably borne by the ultimate consumer-recipient. Another aspect of the principle is that a person who, within the EU, provides services which are exempt for VAT purposes cannot recover the input tax attributable to those services – see WHA Ltd & another v Revenue and Customs Commissioners [2007] STC 1695 at para 16. Sometimes the principle seems to refer to a sort of fiscal parity, as between one supplier and others, so that it can be said, so far as concerns VAT, that they are competing with one another on the mythical level playing field. Sometimes it may refer to the fact that VAT advantages open to one supplier using a particular mode of supply are to be of a kind neutral between suppliers in the sense that, whether or not other traders have sought to obtain the VAT advantages under consideration,

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial