Abuse of rights and supply of services

HMRC v Paul Newey trading as Ocean Finance (C-653/11)

The ECJ delivered its judgment in this case on 20 June 2013. It related to the abuse of rights principle and the extent to which contractual terms are decisive in identifying the supplier and recipient in the context of a supply of services. The Court held that whilst the contractual terms are a factor to be taken into account, such terms are not decisive in identifying the supplier and recipient of a supply of services. “They may in particular be disregarded if it becomes apparent that hey do not reflect economic and commercial reality, but constitute a wholly artificial arrangement which does not reflect economic reality and was set up with the sole aim of obtaining a tax advantage” and this is for the national court to decide. The full judgment can be accessed here.