Preventing VAT Fraud without Compromising the Competitive Terms of the Internal Market. A study in whether the CJEU interprets the right of Member States to fight VAT fraud under Article 273 VAT Directive without jeopardising the competitive terms of the

Sammanfattning: The consequences of VAT fraud are many and far-reaching. Accordingly, Member States have both a right and an obligation to fight tax fraud. However, the same measures aimed at preventing tax fraud can compromise the establishment and functioning of the internal market. For instance, if a Member State refuses to deduct input VAT for certain goods in order to combat tax fraud, it will result in companies established in other Member States having a competitive advantage, as they are allowed to deduct input VAT. The purpose of this paper is to investigate whether the objective of fiscal harmonisation, more specifically the objective of avoiding distortions of competition, pursued by the VAT Directive, is observed by the CJEU when interpreting the right of Member States to combat VAT fraud under Article 273 VAT Directive, having regard to the principles of neutrality and proportionality. In conclusion, the interpretation of Article 273 allows Member States to distort competition at national and Union level, either by introducing anti-fraud measures having this effect or by not doing enough to prevent VAT fraud.