CJEU - Recent Developments in Value Added Tax 2022

S. 59CJEU: Substance over form “principle” and new tendencies

David Hummel

1. Introduction

In one of her recent opinions, Advocate General Kokott cited Rudolf von Jhering, a well-known German legal scholar, who once said: “Form is the sworn enemy of arbitrariness, the twin sister of freedom.”

Perhaps this is why VAT law includes many formal requirements that must be met before the taxpayer can exercise his right of deduction, can opt for taxation, or can use a special simplification scheme, for example. Concerning these formal requirements, it is not disputed that the Court of Justice of the European Union (CJEU or Court of Justice) has ended excessive formalism in VAT law. However, there are some interesting recent decisions of the Court of Justice that are dealing with these questions even if the material conditions are fulfilled.

2. Substance over form vs. sense of form?

It is not disputed that the CJEU has ended excessive formalism in VAT law. Nevertheless, this path of deformalization must not be taken too far as it would jeopardize the uniform application of VAT law and thus fair competition and encourage arbitrariness. This problem is usually discussed under the heading “substance over...