A tax advantage contrary to the purpose of VAT provisions

Sammanfattning: One of two conditions for establishing abuse of European law in the area of VAT is that in spite fulfillment of the literal meaning of a VAT directive and national provisions, a tax advantage is gained which is contrary to the purpose of those provisions. First, a comparison of ten examples illustrating different conditions shows that whether it is advantageous or not to be taxed and allowed to deduct input VAT depends on the circumstances of the case. Second, it has been shown that the Court of Justice has used a wide range of synonyms for the word purpose and it has not been entirely consistent in its use of those synonyms. Third, a terminology of purposes has been proposed: Literal purpose, further purpose, still further purpose and yet still further purpose. Fourth it has been argued that it is a heavy burden on especially small undertakings to know all the purposes of all VAT provisions.