Joint Venture and Value Added Tax Regime. Common Law Rules versus Tax Law Rules

The overall economic situation considers a scenario that is not exactly optimistic in the context of the current health crisis. The need for cheap resources will probably lead to the seizing of the opportunities provided by the trade companies, without patrimonial transfers of goods and labour force. Taking this context into account, we believe that the mixed ventures might become relevant again nowadays. The challenge posed by the indirect taxation of these associations without legal personality points out a series of practical aspects which we consider that should be rigorously and thoroughly addressed, especially that the tax payers’ option is not always in accordance with that of the fiscal authorities causing contentious issues, which are time and money consuming and at the same time lead to forced executions endangering the company’s existence itself. The article hereby is based on the material tax law rules as regards the common law provisions, with the aim of setting up the tax deductions regime regarding the contributions and purchases related to joint ventures, given that the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax does not include specific provisions for joint ventures, which is why the jurisprudence of the Court of Justice of the European Union is applicable in this matter.