Mecsek-Gabona: The Final Step of the ECJ’s Doctrine on Reliance on EU Law for Abusive or Fraudulent Ends in the Context of Intra-Community Transactions

Abstract

The ECJ applied the principle of fraus omnia corrumpit (fraud corrupts everything) in the field of VAT for the first time in 2007. On that occasion, the ECJ decided that knowledge of fraud may have the effect that taxable persons lose the right to deduct input VAT. More recently, the ECJ declared in Mecsek-Gabona that knowledge of fraud may also have the effect that suppliers of goods lose the right to zero rate cross-border transactions. In this article, the author places the ECJ’s decision in Mecsek-Gabona in a broader context.