X Holding BV v Staatssecretaris van Financiën

VAT: Input tax

In X Holding BV v Staatssecretaris van Financiën (ECJ Case C-538/08) a company reclaimed input tax in respect of the purchase of 30 cars for use by its employees. The tax authority issued an assessment to recover the tax on the basis that the cars were used privately as well as for business purposes. The company appealed and the case was referred to the ECJ for a ruling on the interpretation of Article 17(6) of the EC Sixth Directive.

The ECJ held that Article 17(6) 'must be interpreted as not precluding national legislation enacted before the Sixth Directive entered into force under which a taxable person may deduct value added tax paid on the acquisition of certain goods and services used partly for private purposes and partly for professional purposes not in full but only in proportion to their use for professional...