determining abuse in matters of indirect taxation.
5.2 The concept of abuse in Part Service
In Part Service, the concept of abuse was once more discussed in relation to VAT. The referring court requested guidance on whether or not an abusive practice could be found in a situation when the:
“accrual of a tax advantage is the principal aim of the transaction… or if such finding can only be made if the accrual of that tax advantage constitutes the sole aim pursued, to the exclusion of other economic objectives ”
Essentially the referring court asked whether the essential aim referenced in the Halifax ruling meant the one and only aim of the transaction, or the most important aim. In reply, the court referenced Advocate-General Maduro and stated that if there was some explanation other than merely the attainment of tax advantages, then there was indeed no abuse present.
The reasoning here seemed to confirm the narrow interpretation of abuse, however in rereferring again to Halifax the Court clarified that for VAT purposes at least, there is an abusive practice when the tax advantage in of the opinion of the judge is the principal reason for engaging in the transaction. No clarity was given as regards the criteria on which a judge should evaluate the importance of the tax advantage to the non-tax advantages.
However, it is clear that this concept is not unlike the ab
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