Organizational unit without legal personality as a VAT taxable person

Abstract

In this article, the Authors analyse the CJEU jurisprudence and answer the question of what criteria should be taken into account when assessing whether a certain organisational unit without legal personality can be ascribed the status of a VAT taxpayer. Undoubtedly, in accordance with the CJEU case law, in the Author’s view, the criterion of independence should be applied to assess the subjective taxability of both natural and legal persons under private law and organisational units under public law. The analysis carried out leads the Authors of this article to the conclusion that, in order to determine whether a distinct organisational unit has the status of a VAT-taxable person, it should first be examined whether a VAT-taxable event may occur. As the event involves the exchange of goods and services as part in a legal relationship, the entity must have the legal capacity to establish such a relationship. Such capacity is possessed by natural and legal persons. It may also be possessed by those organisational units without legal personality that have been granted in a particular legal system the capacity to acquire rights and incur obligations in their own name without being simultaneously granted legal personality.