With the Morgan Stanley judgment, the Court of Justice of the European Union (CJEU) established what is known as the double requirement (or double layer test) in order to exercise the right to deduct VAT in cases of cross-border transactions carried out by taxable persons. In this work, the author examines this test and its possible incompatibilities with a number of fundamental VAT principles through different cross-border transaction scenarios. The analysis elucidates problems that may arise, and proposals are advanced to address them. These solutions involve eliminating the double requirement or, alternatively, implementing an intra-Community transfer for services regime that is equivalent to that which already exists for goods.