Tax cases

Work in progress

The claimant a construction company in Portugal carried out work that was subject to VAT and other work that was exempt. Following an investigation the claimant was assessed to additional tax and interest. During his appeal the question arose whether in calculating the input tax that was partly deductible under Article 17(5) of Sixth Council Directive 77/388/EEC it was appropriate to include in the denominator of the fraction referred to in Article 19 the value of work in progress that at the end of every year had not yet been put on the market and the value of which had not in whole or in part been received by the taxable person. The matter was referred to the European Court of Justice for a preliminary ruling.
The European Court said that it followed from Articles 17(1)...