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VAT “rounding rule” referred to CJEU
The Tax Court of Muenster has asked the CJEU to verify the applicable rounding provisions on the German pro rata rate.
On March 17, 2015, the Tax Court of Muenster requested a preliminary ruling from the Court of Justice of the European Union (CJEU) on whether the “rounding rule” in article 175(1) of the EU VAT directive must be implemented by the EU member states where the calculation of the pro rata deduction rate is based on calculation methods other than the relation of the generated revenue. In the case at issue, the taxpayer used a specific margin-based methodology. The CJEU now will have to decide whether the rate of pro rata input VAT deductions have to be rounded up in favor of the taxpayer regardless of the pro rata calculation method used.