Treaty of Lisbon and B2B VAT Exemptions

Since 1 December 2009, article 113 of the Treaty on the Functioning of the European Union imposes an obligation on the Council of the European Union to adopt measures in order to avoid “distortion of competition”. In this article, the author looks at the origin of the EU VAT system, describes the position of the ECJ as regards VAT exemptions and raises the question of the extent to which businesses can rely on article 113 of the TFEU in order to challenge national VAT exemptions for B2B transactions before national courts.