On the meaning of the term ‘construction work’ and on VAT harmonisation in the EU

This judgment favours a narrow interpretation of terms in Council Decisions that authorise a derogation from the VAT Directives (here: ‘construction work’ contained in Council Decision 2004/290/EC). The Court also ruled that a Member State is not obliged to fully apply the authorisation, but may instead apply it only in part, provided the requirements of fiscal neutrality, proportionality and legal certainty are met. It is the task of the courts of the Member States to ascertain whether this is the case.