Varzim Sol-Turismo, Jogo & Animaçao SA v Fazenda Pública

Alan Dolton

In the Portuguese case of Varzim Sol-Turismo Jogo & Animaçao SA v Fazenda Pública (CJEU Case C-25/11) the CJEU held that Article 19 of the EC Sixth Directive ‘must be interpreted as precluding a Member State where it authorises mixed taxable persons to make the deduction provided for in those provisions on the basis of the use of all or part of the goods and services from calculating the deductible amount for sectors in which such taxable persons carry out taxable transactions only by including untaxed "subsidies" in the denominator of the fraction used to determine the deductible proportion’.

Why it matters: The CJEU held that the relevant Portuguese legislation contravened Article 19 of the EC Sixth Directive.

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