In establishing the objective element, the Court did not deviate from what was already established in previous caselaw. In order to fulfil this element, it must be proved that the person seeking to have the right has obtained it for the achievement of an “improper advantage, manifestly contrary to the objective of that provision”. Thus, if the right in question is exercised within the aims and limits of Union law, there is no abuse, merely a legitimate exercise of a right.

3.1.2 The Subjective element
The subjective element of this test attracted much controversy and produced much scholarly debate. Motives are irrelevant in this exercise, as they do not exist when it comes to legal persons. Determining that the transactions in question are created artificially in order to obtain an advantage from Union provisions must instead be determined by objective evidence and objective circumstances.

4 VAT: a system vulnerable to abuse
In force as Directive 2006/112/EC, the VAT system within the EU is built upon the general features of a general tax on consumption, which is calculated proportionate to the price of the supplied good or service. Virtually all commercial activities are subject to VAT and it exists essentially as a multistage turnover tax. In this form, it has created the foundation for Member States to design their own VAT rates and is as of yet not fully harmonised. Most relevant to this paper is how the system of EU VAT creates the possibilities for abusive practices to occur.

4.1.1 Vulnerability 1: Cross-border supply of goods and services: creating an envir