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In ITH Comercial Timişoara (ITH) VAT case C-734/19, the European Court of Justice (CJEU) ruled that the right to deduct input VAT on goods and services acquired with a view to carrying out taxable operations is maintained when a project is abandoned due to circumstances beyond the control of the taxable person.

The Romanian tax authorities challenged the input VAT deduction on the basis that:

ITH appealed and the Romanian tax authorities referred the case to the Court of Justice.

The CJEU ruled that:

It also ruled that in the absence of an agency contract without representation, the commission agent mechanism is not applicable when a taxable person carries out construction in accordance with the needs and requirements of another person supposed to hire said construction.

ITH was entitled to recover input tax incurred on the projects provided that it could show that its intention had not changed.

Useful guides on this topic

VAT on land and property
A handy outline of the VAT treatment of some of the more common supplies of land and property.

Capital Goods Scheme
What is the VAT Capital Goods Scheme (CGS)? When do I use it? How does it work?

External links

ITH Comercial Timişoara (ITH) VAT case C-734/19