Arsene Taxand - VAT & indirect taxes

Hot off the press - IRAP

The decision with regard to Irap has just been issued by the ECJ.
The ECJ does not consider that Irap has characteristics similar to those of VAT, in the sense of Article 33 of the Sixth VAT directive.

As we had previously stated, there were no imperative reasons, of either a factual or legal nature, requiring the filing of protests against business tax/VA, the Organic (French social security compensation tax) or the taxe sur les salaires (tax on wages) in great haste in the middle of the summer vacation period.

This decision does however provide material for calmly continuing with the reflection process, due to its interpretation of Article 33 of the Sixth directive, combined, for the very first time, with the recitals of the First VAT Directive.

Although it will logically lead to the conclusion that the question of the compatibility of business tax/VA with the Sixth VAT Directive was not really a cause for concern for the French tax authorities or a source of potential savings for companies, the debate remains open with regard to the compatibility of certain other taxes.

Alain Recoules