Ryanair Ltd -v- Revenue Commissioners [2017] IESC 19 (27 March 2017)

Ryanair Ltd -v- Revenue Commissioners [2017] IESC 19 (27 March 2017)

Resolution of whether VAT on professional services incurred in a failed acquisition is deductible depends on interpretation of EU law regarding economic activity and the required link between input and output transactions; as these issues are not acte clair, a reference to the CJEU is necessary.

Citation
[2017] IESC 19
Parties
Appellant: Ryanair Limited; Respondents: The Revenue Commissioners
Jurisdiction
Ireland
Judgment Date
27 March 2017
Procedural Posture
Tax Appeal (vat Input Deduction) / Supreme Court Appeal; Referral to CJEU
Outcome
Reference to the Court of Justice of the European Union under Article 267 TFEU
Legal Topics
VAT Input Deduction, Economic Activity Definition, Right to Deduct VAT, CJEU Preliminary Reference
Tax Law European Union Law VAT Input Deduction Economic Activity Definition Right to Deduct VAT CJEU Preliminary Reference

Case Brief

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Parties

Ryanair Limited

Appellant

The Revenue Commissioners

Respondents

Procedural Posture

Tax Appeal (vat Input Deduction) / Supreme Court Appeal; Referral to CJEU

Legal Issues

  1. 1 Whether Ryanair is entitled to deduct VAT paid on professional services incurred in a failed takeover bid for Aer Lingus under EU VAT law
  2. 2 Whether intention to provide management services to the target company constitutes 'economic activity' for VAT purposes
  3. 3 Whether there is a direct and immediate link between input services and output transactions when the acquisition did not proceed

Ratio Decidendi

Resolution of whether VAT on professional services incurred in a failed acquisition is deductible depends on interpretation of EU law regarding economic activity and the required link between input and output transactions; as these issues are not acte clair, a reference to the CJEU is necessary.

Court Disposition

Reference to the Court of Justice of the European Union under Article 267 TFEU

Orders

  • Parties to make written observations on the draft reference within two weeks
  • No determination on the substantive VAT deduction issue pending CJEU ruling