Empowering the Taxpayer - How the Charter of Fundamental Rights Helps to Shape an Equitable European VAT System

Abstract: C-617/10 Åkerberg Fransson is the landmark case of the Court of Justice of the European Union (CJEU) that dealt with the interpretation and application of the Charter of Fundamental Rights of the European Union (Charter). In brief, the case concerned a Swedish national who was accused of tax evasion and faced criminal charges for failing to pay value added tax (VAT) on certain business transactions. The defendant argued that the criminal charges violated his right to ne bis in idem, which is a principle that prevents a person from being tried or punished twice for the same offence. He argued that the VAT assessment by the Swedish tax authorities was equivalent to a penalty, and therefore, the criminal charges constituted a second penalty for the same offence. With that, the Åkerberg Fransson case established that, to a large extent, the VAT Directive falls within the scope of the Charter. The Charter plays a vital role in shaping an equitable VAT system in the EU. It ensures that no individual or legal person is to be discriminated against within this system. By upholding the principles outlined in the Charter, the European VAT strives to treat all individuals, and legal entities equally under the law. The Charter is a legally binding document that sets out a range of fundamental rights that apply to all individuals in the European Union (EU). These rights include, among others, the right to non-discrimination, the right to fair trial, and the right to an effective remedy. In essence, the Charter serves as a crucial instrument in guaranteeing the equity of the European VAT, ultimately promoting a just economic environment for taxpayers.