(Judgment) The special measures for derogation which the Member States may introduce, pursuant to Article 27 of the Sixth Council Directive 77/388 on the harmonization of the laws of the Member States relating to turnover taxes, in order to prevent tax evasion or avoidance must be strictly interpreted and may not derogate from the basis for charging value added tax laid down in Article 11 of the Sixth Directive except within the limits strictly necessary for achieving that aim.
Consequently, despite an authorization given by the Council to the Member State concerned pursuant to Article 27, national rules which, in the case of supplies for consideration made between associated persons, in particular as regards rental of property, take as the minimum basis of assessment the full cost of the services supplied, as defined in Article 11A(1)(c) of the Directive, although the agreed consideration, while less than the minimum basis of assessment, represents the market rate, are not covered by Article 27 of the Directive.
Citations:
C-63/96, [1997] EUECJ C-63/96
Links:
Jurisdiction:
European
VAT
Updated: 03 June 2022; Ref: scu.161797