fabiola annacondia the european court of justice – recently … · 2018. 5. 4. · fabiola...

The European Court of Justice – Recently Decided and Pending CasesIn this overview, the editor provides a list of judgments of the Court of Justice of the European Union (ECJ) and Opinions of the ECJ’s Advocates General delivered in VAT cases in the past 12 months. The overview also contains a list of the remaining cases pending before the ECJ on 31 August 2017, and a list of cases that have been removed from the ECJ’s register in the past year. Summaries of the judgments, Opinions and other pending cases that have not yet been published are presented following the lists.

1. Introduction

The September/October issue of the International VAT Monitor present a list of judgments of the Court of Justice of the European Union (ECJ) delivered in the preceding 12 months (section 2.), and separate lists of cases pending before the ECJ on 31 August of the current year, i.e. cases in respect of which one of the Advocates General of the ECJ has delivered an Opinion (section 3.) and cases in respect of which an Opinion was not (yet) available (section 4.) on 31 August 2017. The cases that were recently removed from the ECJ’s registry are included in the list in section 5. As regards the judgments, Opinions, announcements and removals that have not yet been published in the Interna-tional VAT Monitor, further details are presented follow-ing the respective tables.

For practical reasons, the subsequent basic VAT Direc-tives are simply referred to as, respectively, “Sixth Direc-tive”1 and “Directive 2006/112” or “VAT Directive”.2 Also, the other VAT Directives are simply referred to as “First,3

* Editor of the International VAT Monitor.1. Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmo-

nization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, OJ L145 of 13 June 1977.

2. Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, OJ L347 of 11 December 2006.

3. First Council Directive 67/227/EEC of 11 April 1967 on the harmoni-zation of legislation of Member States concerning turnover taxes, OJ, English Special Edition 1967.

Second,4 Eighth5 and Thirteenth6 Directive and Direc-tive 2008/9”.7 “EC” refers to the former Treaty establishing the European Community.8 “Value added tax” has been abbreviated as “VAT”, “European Union” (used as adjec-tive) as “EU”, and “Advocate General” as “AG”. “Commis-sion” refers to Commission of the European Communities or European Commission. Following the entry into force of the Treaty of Lisbon, on 1 December 2009, the term “Community” has been replaced by “European Union”, unless that term forms part of legally defined concepts, such as in “intra-Community acquisition”.

Although the VAT Directive does not contain any provi-sions on penalties and interest in relation to VAT assess-ment or refunds, judgments on those topics are none-theless included if they are or may also be relevant in the framework of VAT.

2. Recent Judgments

In the period from 1 September 2016 to 31 August 2017, the ECJ delivered the following judgments and reasoned orders in VAT cases.

4. Second Council Directive 67/228/EEC of 11 April 1967 on the harmo-nization of legislation of Member States concerning turnover taxes – Structure and procedures for application of the common system of VAT.

5. Eighth Council Directive 79/1072/EEC of 6 December 1979 on the har-monization of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in the territory of the country, OJ L331 of 27 December 1979.

6. Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonization of the laws of the Member States relating to turn-over taxes – Arrangements for the refund of value added tax to taxable persons not established in Community territory, OJ L326 of 21 Novem-ber 1986.

7. Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable persons not established in the Member State of refund but established in another Member State, OJ L44 of 20 Feb-ruary 2008.

8. Treaty Establishing the European Community, as amended by the Treaty of Athens, which was signed on 16 April 2003, OJ C321 of 29 December 2006. With effect from 1 December 2009, i.e. the date of entry into force of the Treaty of Lisbon, the Treaty Establishing the European Community has been amended and renamed as Treaty on the Func-tioning of the European Union (TFEU), OJ L115 of 9 May 2008. The amended Treaty on European Union has been published in the same Official Journal.

European Union Fabiola Annacondia*

Decided cases Article(s) of AG’s Opinion ECJ’s judgment Keywords

Case Parties involved

Sixth Directive

Directive 2006/112

Date IVM Date IVM

C-516/14 Barlis 06 – Investimentos Imobiliários e Turísticos

– 226(6) 18-02-2016

2(2016) 15-09-2016

6(2016) Details on invoices

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Exported / Printed on 4 May 2018 by IBFD.



Sixth Directive

Directive 2006/112

Date IVM Date IVM

C-518/14 Senatex 17(1), 18(1), 22(3)(a)

167, 178(a), 220 17-02-2016

3(2016) 15-09-2016

6(2016) Correction of invoices – retrospective effect

C-24/15 plöckl 22(8), 28c(A)(a), 28c(A)(d)

273, 131, 138, 139

06-04-2016

3(2016) 20-10-2016

6(2016) Intra-Community supply – Formal requirements – Conditions for exemption

C-208/15 Stock ‘94 – 1(2), 2(1)(a), 2(1)(c), 14(1), 24(1), 73, 78(b), 135(1)(b)

No Opinion

– 08-12-2016

1(2017) Supply of goods – Grant of loans – Single or multiple supplies

C-217/15 Orsi – 193 12-01-2017

1(2017) 05-04-2017

3(2017) Failure to pay VAT – Criminal and administrative liability – Charter of Fundamental rights

C-274/15 Commission / Luxembourg

– 2(1)(c), 132(1)(f), 1(2), 168(a), 178(a), 14(2)(c), 28

06-10-2016

6(2016) 04-05-2017

4(2017) exemption – Independent group of persons

101, 107, 119 TFeU1

C-340/15 Nigl 4(1) and (4), 25

9, 10, 11, 296 30-06-2016

5(2016) 12-10-2016

6(2016) Taxable persons – Flat-rate farmers

C-344/15 National roads Authority

– 13 08-09-2016

6(2016) 19-01-2017

2(2017) Competition between public bodies and private operators – road tolls

C-350/15 Baldetti – 193 12-01-2017

1(2017) 05-04-2017

3(2017) Failure to pay VAT – Criminal and administrative liability – Charter of Fundamental rights

C-378/15 mercedes Benz Italia

17(2) and (5), 19

168, 173, 174, 175

29-06-2016

5(2016) 14-12-2016

1(2017) proportional deduction of input VAT

C-390/15 rpO – 98(2), Annex III(6)

09-09-2016

6(2016) 07-03-2017

3(2017) reduced rates – Books in digital format

C-400/15 Landkreis postdam-mittelmark

6(2), 17(2) 26, 168 No Opinion

– 15-09-2016

6(2016) Deduction – Goods used partially for business purposes

C-412/15 TmD – 132(1)(d) 02-06-2016

4(2016) 05-10-2016

6(2016) exemption – Blood plasma

C-432/15 Baštová – 2, 24, 98, Annex III(14)

14-06-2016

5(2016) 10-11-2016

1(2017) Supply of service – Horses running in a race

C-446/15 Signum Alfa Sped

– 168 No Opinion

– 10-11-20162

1(2017) Deduction – Irregularities in the invoice

C-453/15 A and B – 56(1)(a) 07-09-2016

6(2016) 08-12-2016

1(2017) Greenhouse gas emission allowance trading

C-471/15 Sjelle Autogenbrug

– 311(1) 22-09-2016

6(2016) 18-01-2017

2(2017) Second-hand goods

C-493/15 Agenzia delle entrate

2, 22 2, 272, 273 No Opinion

– 16-03-2017

3(2017) Bankruptcy – extinguishments of VAT debts4(3) TFeU1

C-564/15 Farkas – 196 10-11-2016

1(2017) 26-04-2017

4(2017) reverse charge mechanism – penalty

C-571/15 Wallenborn Transports

– 61, 71(1), 156 13-12-2016

1(2017) 01-06-2017

4(2017) Chargeable event – Free ports203(1), 204(1) CCC3

C-573/15 Oxycure Belgium

– 98(1) and (2), Annex III (3) and (4)

20-10-2016

6(2016) 09-03-2017

3(2017) reduced rate – Oxygen treatment

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Fabiola Annacondia




Sixth Directive

Directive 2006/112

Date IVM Date IVM

C-576/15 maya marinova – 2(1)(a), 9(1), 14(1), 73, 80, 273

No Opinion

– 05-10-2016

6(2016) Taxable amount – prevent VAT evasion

C-592/15 British Film Institute

13(A)(1)(n) 132(1)(n) 29-09-2016

6(2016) 15-02-2017

2(2017) exemption – Cultural services

C-624/15 Litdana – 226(11) and (14), 314(a) and (d)

No Opinion

– 18-05-2017

4(2017) margin scheme – exemption

C-633/15 London Borough of ealing

– 132(1)(m), 133 21-12-2016

1(2017) 13-07-2017

See below

exemption – public non-profit making bodies

C-699/15 Brockenhurst College

– 132(1)(i) 21-12-2016

1(2017) 04-05-2017

4(2017) exemption – Services “closely related” to educational services

C-21/16 euro Tyre – 131, 138(1) No Opinion

– 09-02-20017

2(2017) Intra-Community supply of goods – Valid identification number – Zero rate

C-26/16 Santogal m-Comércio e reparação de Automóveis

– 138(2)(a) 01-02-2017

2(2017) 14-06-2017

4(2017) Intra-Community transaction – New means of transport

C-28/16 magyar Villamos művek

– 9, 168 No Opinion

– 12-01-20172

1(2017) Holding company – right to deduct VAT

C-33/16 A Oy – 148(d) 07-12-2016

1(2017) 04-05-2017

4(2017) Supply of services – Cargo onto and off a vessel

C-36/16 posnania Investment

– 2(1)(a), 14(1) 16-02-2017

2(2017) 11-05-2017

4(2017) Transfer of ownership of land

C-37/16 SAWp – 24(1), 25(a), 28, 220(1)(1)

No Opinion

– 18-01-2017

See below

Collective management organizations – Invoices

C-38/16 Compass Contract Services

– – 02-03-2017

2(2017) 14-06-2017

4(2017) Output and input tax claims

C-154/16 VAS “Latvijas dzelzceļš”

– 2(1)(d), 70, 71, 201, 202, 205

No Opinion

– 18-05-2017

4(2017) Goods destroyed during external transit – VAT on importation94(1), 96(1), 203(1), 204(1)(a),

206, 213 CCC3

C-211/16 Bimotor – 183 No Opinion

– 16-03-2017

3(2017) VAT claims limited

C-254/16 Glencore Grain Hungary

– 183 No Opinion

– 06-07-2017

See below

VAT refund – Default interest

C-286/16 exmitiani – – No Opinion

– 11-05-20172

4(2017) International passenger transport – proceeding took place before romania’s accession to the european Union

C-288/16 IK ‘L.Č’ – 146(1)(e) No Opinion

– 29-06-2017

See below

exemption – services connected with the import and export of goods

C-386/16 Toridas – 138(1) No Opinion

– 26-07-2017

See below

exemption – Intra-Community supply of goods

C-392/16 marcu Dumitru – 199(1)(c) No Opinion

– 06-07-2017

See below

registration – reverse charge mechanism

1. Treaty on the Functioning of the European Union (TFEU), OJ L115 (2008).2. The ECJ delivered its decision in the form of a Court’s order.3. Council Regulation (EEC) 2913/92 of 12 October establishing the Community Customs Code (CCC), OJ L 302 (1992).


The european Court of Justice – recently Decided and pending Cases


Judgment of 13 July 2017: Case C-633/15 London Borough of Ealing v. Commissioners for Her Majesty’s Revenue and Customs

The London Borough of Ealing was a local authority in the United Kingdom which operated sports facilities, such as gymnasia and swimming pools. It remitted the VAT col-lected on the admission charges to those sports facilities to the tax authorities during the period 1 June 2009 to 31 August 2012.

However, the London Borough of Ealing claimed the refund of that VAT, taking the view that those services were exempt from VAT under article 132(1)(m) of the VAT Directive.

The tax authorities rejected the claim on the grounds that the national legislation excluded from the exemption sup-plies of sporting services by local authorities, such as the London Borough of Ealing, in accordance with point (d) of the first paragraph of article 133 of the VAT Directive.

As regards the questions of the First-tier Tribunal (Tax Chamber) (United Kingdom) of whether United Kingdom is entitled to impose a condition to bodies governed by public law to apply the exemption for sport facilities under article 133 of the VAT Directive; if it can impose this con-dition, whether it can do so without also applying that condition to non-profit-making bodies which are not gov-erned by public law; and if the answer to the above is in the affirmative, whether the United Kingdom is permit-ted to exclude all public non-profit-making bodies from the benefit of the exemption contained in article 132(1)(m) of the VAT Directive without having considered in each individual case whether the granting of an exemp-tion would be likely to cause distortion of competition to the disadvantage of commercial enterprises subject to VAT, the ECJ stated that it is not required that all supplies of services closely linked to sport or physical education should have been subject to VAT in order to impose the condition to bodies governed by public law.

The ECJ mentioned that the condition contained in point (d) of the first paragraph of article 133 of the VAT Direc-tive is written in the present tense, and therefore ruled that the exemption for services closely linked to sport or phys-ical education, provided by bodies governed by public law, may be subject to the condition, even if those services did not previously benefit from an exemption in the Member State concerned.

The ECJ recalled that the VAT exemption for services closely related to sport or physical education applies to all non-profit-making organizations. Member States are in principle allowed to make the granting of the exemp-tion to bodies other than those governed by public law subject to the condition. Nevertheless, as regards bodies governed by public law, the second paragraph of article 133 of the VAT Directive also grants Member States the right to impose on them this condition in a case where Member States did not grant the exemption to such bodies before 1 January 1989.

The ECJ ruled, however, that Member States can only set this condition for bodies governed by public law if they have also set this condition for bodies other than those governed by public law. The ECJ based its ruling on the word “also” in the referred paragraph.

In respect of the view of the ECJ, there was no need to answer the third question since the response to the second question covers the subject concerned.

On those grounds, the ECJ (Fourth Chamber) ruled that:“(1) The second paragraph of Article 133 of the VAT

Directive must be interpreted as not precluding the legislation of a Member State from providing that compliance with the condition laid down in point (d) of the first paragraph of Article 133 of that direc-tive is a prerequisite for the grant of a VAT exemption to bodies governed by public law that supply services closely linked to sport or physical education, within the meaning of Article 132(1)(m) of that directive, even though, on the one hand, on 1 January 1989 that Member State did not apply VAT to all those sup-plies of services and, on the other, the supplies of ser-vices at issue were not exempted from VAT before the requirement of compliance with that condition was imposed.

(2) The second paragraph of Article 133 of the VAT Directive must be interpreted as precluding national legislation, such as that at issue in the main proceed-ings, where that legislation provides that compliance with the condition laid down in point (d) of the first paragraph of Article 133 of that directive is a pre-requisite for the grant of a VAT exemption to non-profit making organisations governed by public law making supplies of services closely linked to sport or physical education, within the meaning of Article 132(1)(m) of that directive, but fails also to apply that condition to non-profit making organisations other than those governed by public law that make such supplies of services.”

ECLI:EU:C:2017:544.

Judgment of 18 January 2017: Case C-37/16 Minister Finansów v. Stowarzyszenie Artystów Wykonawców Utworów Muzycznych i Słowno-Muzycznych SAWP (SAWP)

The society for performers of musical works with or without words (SAWP) requested the Minister for Finance to adopt a position as to whether fees on blank media and recording and reproduction devices paid by produc-ers and importers of such devices and media pursuant to article 20 of the Law of 4 February 1994 on copyright and related rights are subject to VAT.

The Minister for Finance took the view that those sums paid to the SAWP constitute a payment for the use of the copyright or related rights that are connected with the sale of equipment for copying and recording works and that, therefore, those sums must be regarded as remuner-ation for the services supplied by the holders of copyright or related rights and must, as such, be subject to VAT. The


Fabiola Annacondia


SAWP then brought an action before the Wojewódzki Sąd Administracyjny w Warszawie (Regional Administrative Court, Warsaw, Poland).

The Naczelny Sąd Administracyjny (Supreme Administra-tive Court, Poland), stating that there are currently two contradictory judicial precedents in Poland on this issue, decided to ask the ECJ whether the VAT Directive must be interpreted as meaning that holders of reproduction rights make a supply of services, within the meaning of that directive, to producers and importers of blank media and of recording and reproduction devices on whom orga-nizations collectively managing copyright and related rights levy on behalf of those rightholders, but in their own name, fees in respect of the sale of those devices and media, and if this question is answered in the affirma-tive, whether collective management organizations, in levying a fee on devices and media by virtue of their sale by producers and importers, are acting as taxable persons, who are required to document those activities by means of an invoice, issued to producers and importers of audio recorders and other similar devices and of blank media, showing VAT as due by virtue of the fees, and whether, at the time at which the fees levied on behalf of the authors, performers and other rightholders are distributed to them, the latter are required to document receipt of the fees by means of an invoice, indicating the VAT, issued to the collective management organization levying the fee.

The ECJ began by analysing whether a transaction such as that at issue in the main proceedings constitutes the assignment of intangible property within the meaning of article 25(a) of Directive 2006/112.

The ECJ noted that it does not appear that there is a legal relationship pursuant to which there is reciprocal perfor-mance by, on the one hand, holders of reproduction rights or, as the case may be, the organization collectively man-aging such rights, and, on the other hand, producers and importers of blank media and of recording and reproduc-tion devices. The obligation to pay fees, such as those at issue in the main proceedings, is owed by those producers and importers by virtue of the national legislation which also determines their amount.

Furthermore, the ECJ noted that the obligation on pro-ducers and importers of blank media and of recording and reproduction devices to pay fees cannot be regarded as resulting from the supply of a service for which it con-stitutes the direct consideration. Those fees are intended to finance fair compensation for holders of reproduction rights. However, the fair compensation does not consti-tute the direct consideration for any supply of services, because it is linked to the harm resulting for those right-holders from the reproduction of their protected works without their authorization.

The ECJ found that there is no need to answer the second question since the first question is answered in the neg-ative.

On those grounds, the ECJ (Eighth Chamber) ruled that:“Directive 2006/112, as amended by Council Direc-tive 2010/45/EU of 13 July 2010, must be interpreted as

meaning that holders of reproduction rights do not make a supply of services, within the meaning of that directive, to producers and importers of blank media and of record-ing and reproduction devices on whom organisations col-lectively managing copyright and related rights levy on behalf of those rightholders, but in their own name, fees in respect of the sale of those devices and media.”

ECLI:EU:C:2017:22.

Judgment of 6 July 2017: Case C-254/16 Glencore Agriculture Hungary Kft., formerly Glencore Grain Hungary Kft. v. Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatóság

Glencore, a taxable person operating in the grain trade, filed a refund request for overpaid VAT with the Hungar-ian tax authorities. After the request was filed, and before the refund for overpaid VAT was granted, the Hungarian tax authorities sent Glencore several requests for data dis-closure. Subsequently, they imposed three fines because of delay in responding to some of their requests. The Hungarian tax authorities took the view that the delay in replies obstructed the conduct of the investigation.

Approximately three years later, the Hungarian tax authorities partially accepted Glencore’s refund request for overpaid VAT and paid the overpaid VAT to Glencore. However, Glencore subsequently requested the Hungar-ian tax authorities to pay default interest for the period from the date on which the period for refunding the over-paid VAT expired until the day the Hungarian tax author-ities paid the amount,

The Hungarian tax authorities rejected the request to pay default interest. They took the view that Glencore was fined for obstruction of the investigation. Consequently, under the applicable Hungarian legislation, the period for a refund for overpaid VAT and any default interest should be calculated from the date of the delivery of the formal report containing the findings of the investigation. Accordingly, the Hungarian tax authorities took the view that they had not made any late payment and they did not grant Glencore default interest. The latter because the late payment was a result of failure to disclose the data requested, which obstructed the conduct of the investi-gation and the refund for overpaid VAT. Glencore did not agree with the Hungarian tax authorities and brought the case before the Hungarian court.

As regards the questions of the Fővárosi Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Budapest) of whether EU law must be interpreted as pre-cluding national legislation, such as that at issue in the main proceedings, under which, where a tax investiga-tion procedure is initiated by a tax authority and where a taxable person is fined for failure to cooperate, the date of the refund of overpaid VAT may be delayed until the formal report on that investigation is delivered to the taxable person and the payment of default interest may be refused, even where the duration of the tax investigation procedure is excessive and cannot be attributed entirely to the conduct of the taxable person. If so, the referring




court asks what its obligations are, as regards EU law, in disposing of the case in the main proceedings. The ECJ recalled that, although Member States are to set rules on the conditions for a refund of overpaid VAT, these rules cannot undermine the principle of fiscal neutrality. Such conditions must enable the taxable person to recover the entire overpayment of VAT in appropriate circumstances. This implies that the national tax authorities should grant a refund for overpaid VAT within a reasonable period of time and that, in any event, the method cannot have any financial risk for the taxable person. Such a period can be extended in case of a tax investigation, but should not go beyond what is necessary for the successful completion of the investigation.

If a refund for overpaid VAT is not paid within a rea-sonable period, a taxable person should be compensated through the payment of default interest. However, the ECJ stated that it cannot be accepted that when a taxable person, by refusing to cooperate with national tax author-ities, caused the delay in the payment of a refund for over-paid VAT, it may claim default interest for that delay.

The ECJ nevertheless ruled that the Hungarian legislation that allows, where a taxable person has been fined for its negligence during a tax investigation, the tax authorities to extend such an investigation period not justified by that negligence, without having to pay him default interest, seems to be incompatible with EU law. In this regard, the proportion of the duration of the tax investigation proce-dure which can be attributed to the conduct of the taxable person must be determined. The ECJ ruled that, accord-ing to the facts, the extended duration of the tax investi-gation period cannot be completely attributed to Glencore and it was therefore in principle entitled to default interest. It is, however, for the referring court to declare the Hun-garian legislation contrary to EU law.

On those grounds, the ECJ (Seventh Chamber) ruled that:

“EU law must be interpreted as precluding national legis-lation, such as that at issue in the main proceedings, under which, where a tax investigation procedure is initiated by a tax authority and where a taxable person is fined for failure to cooperate, the date of the refund of overpaid VAT may be delayed until the formal report on that inves-tigation is delivered to the taxable person and the payment of default interest may be refused, even where the dura-tion of the tax investigation procedure is excessive and cannot be attributed entirely to the conduct of the taxable person.”

ECLI:EU:C:2017:522.

Judgment of 29 June 2017: Case C-288/16 ‘L.Č.’ IK v. Valsts ienemumu dienests

Atek SIA (Atek) concluded several contracts with con-signors to ensure the transport of goods placed under a transit procedure from the port of Riga (Latvia) to Belarus. The actual transport was carried out by L.Č. with vehicles leased by Atek, which nevertheless acted as the carrier. L.Č. was responsible for driving the vehicle, repairs, refu-elling, customs formalities at border points, surveillance

of the goods, transferring the goods to the consignee and the necessary loading and unloading tasks. L.Č. applied the VAT zero rate to those services.

The Latvian tax authorities carried out a tax inspection on L.Č. and subsequently imposed a VAT assessment for the VAT due on the transit services, a fine and late payment interest. The Latvian tax authorities took the view that L.Č. was not entitled to apply the VAT zero rate to the ser-vices. The tax authorities stated that as there was no legal connection with the consignor or the consignee of the exported goods, those services could not be regarded as being services of a carrier or a freight forwarder. Further-more, L.Č. did not hold the requisite licence under Latvian law, and was as such not authorized to transport freight. L.Č. could therefore not be considered to be a carrier.

As regards the questions of the Augstākā tiesa (Supreme Court, Latvia) of whether article 146(1)(e) of the VAT Directive must be interpreted as meaning that the exemp-tion laid down in that provision applies to a transaction such as that at issue in the main proceedings, namely a supply of services consisting in the transport of goods to a third country, where those services are not supplied directly to the consignor or the consignee of those goods and whether the application of that exemption, which requires that the supply of services concerned must be “directly connected” with the exportations or importa-tions of goods referred to in that provision, is subject to the existence of a direct legal connection, such as a reciprocal contractual relationship, between the service provider and the consignor or the consignee of the goods concerned, the ECJ recalled that the purpose of the VAT zero rate for export supplies and services directly connected with export supplies is to respect the principle that the relevant goods or services should be subject to VAT at their place of destination. This also applies for transport services.

For the application of the zero rate for these services, it is required that (1) the supply of services in question con-tributes to the actual performance of an export supply and (2) those services are supplied directly to the exporter or the consignee of the goods. The ECJ ruled that L.Č.’s ser-vices were indeed necessary to the actual export supply. However, those services were not supplied directly to the consignee or to the exporter, but to a contractual counter-party, Atek, using Ateks vehicles. Therefore, the services are not zero rated.

The ECJ emphasized that a broader interpretation of the provision might lead, for the Member States and for the operators concerned, to constraints that would be irrec-oncilable with the correct and straightforward application of the zero rate for VAT purposes. Also, as a zero rate is an exception to the rule that in principle all services supplied for consideration by a taxable person are subject to VAT, this provision should be interpreted strictly.

On those grounds, the ECJ (First Chamber) ruled that:

“Article 146(1)(e) of the VAT Directive must be interpreted as meaning that the exemption laid down in that provision does not apply to a supply of services, such as that at issue in the main proceedings, relating to a transaction con-


Fabiola Annacondia


sisting in the transport of goods to a third country, where those services are not provided directly to the consignor or the consignee of those goods.”

ECLI:EU:C:2017:502.

Judgment of 26 July 2017: Case C-386/16 ‘Toridas’ UAB v.Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos

A company established and registered for VAT purposes in Lithuania (“Toridas”) sold goods (“the first supplies”) to a company established and identified for VAT pur-poses in Estonia (“Megalain”). According to the agreement between Toridas and Megalain, Megalain undertook to have the goods at issue taken out of Lithuania within 30 days and to submit documents to Toridas proving that the goods actually left Lithuania. Toridas was responsi-ble for the goods, including their storage, and for cover-ing the costs incurred until they were actually taken out of Lithuania.

Megalain subsequently resold the goods on the same or on the next day to purchasers established and identified for VAT purposes in other Member States (“the second sup-plies”). Some of the goods were dispatched immediately after their resale from Lithuania to customers in other Member States. The other goods were transported to the premises of a company located in Lithuania in order to be graded, glazed and packaged (“processing”) before being transported directly to the purchasers in the Member States of destination. Megalain was responsible for the processing and transport.

According to Toridas, the first supplies were considered intra-Community supplies of goods and therefore subject to a the zero rate. As a result, Toridas did not charge Lith-uanian VAT to Megalain.

The Lithuanian tax authorities initiated a tax inspection as regards the first supplies. They took the view that these supplies were domestic supplies, subject to the standard VAT rate, and could not be regarded as intra-Community supplies of goods, subject to the zero rate. Toridas did not agree with the outcome of the inspection and brought the case before the Lithuanian court.

The Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court, Lithuania) asked the ECJ for an interpretation of articles 33, 40, 138(1), 140(a) and 141 of the VAT Directive, in particular, to ascertain whether sup-plies of goods such as the first supplies may be exempt pur-suant to the provisions of the VAT Directive applicable to intra-Community transactions.

The ECJ mentioned that solely article 138(1) of the VAT Directive concerns the exemption of supplies of goods, whilst articles 140(a), 141 and 40 thereof apply only to intra-Community acquisitions of goods. Similarly, article 33 of the VAT Directive concerns the place of supply of goods, whereas the request for a preliminary ruling con-cerns the regime governing the exemption of supplies of goods. Accordingly, the ECJ should examine the case

solely in so far as it relates to the interpretation of articles 40 and 138(1) of the VAT Directive.

The ECJ recalled the conditions to apply the zero rate for intra-Community supplies of goods, being:– the right to dispose of the goods as owner has been

transferred to the person acquiring the goods;– the supplier establishes that those goods have been

dispatched or transported to another Member State; and

– as a result of that dispatch or transport, they have physically left the territory of the Member State of supply of the goods.

According to the ECJ, those conditions cannot be ful-filled if goods are not transported or dispatched to the person that carries out an intra-Community acquisi-tion as regards those goods, which is the corollary of an intra-Community supply of goods.

In addition, the ECJ stressed that in the case of transac-tions that form a chain of two successive supplies that have given rise to only one single intra-Community transport, the intra-Community transport can only be ascribed to one of the two supplies, which, therefore, will alone be zero rated. If that transport took place after the second supply, this transport can only be ascribed to the second supply. Therefore, only this supply should be classified as an intra-Community supply of goods, and should be zero rated. Regarding the case at hand, the ECJ stated that the second supplies took place before the intra-Com-munity transport and Megalain was not the person to which the intra-Community transport of the goods was directed. Therefore, the first supplies are not regarded as intra-Community supplies of goods to which the zero rate applies, but as domestic supplies of goods.

The ECJ added that for classification as an intra-Com-munity supply or acquisition of goods, it is not a criterion whether the first person acquiring the goods is identified for VAT purposes in another Member State than that of the place of the first supply or that of the place of the final acquisition, nor is it, in itself, evidence sufficient to show that a transaction is an intra-Community one.

The ECJ reiterated that the zero rate for intra-Commu-nity supplies of goods can be applied if the substantive conditions which are listed in article 138(1) of Directive 2006/112 are met. The processing of the goods that have been supplied is not part of the substantive conditions. Therefore, the ECJ concluded that, since the first sup-plies cannot be classified as intra-Community supplies of goods, any processing of the goods after the first sup-plies does not alter the answer to the first question.

On those grounds, the ECJ (Ninth Chamber) ruled that:“(1) Article 138(1) of Directive 2006/112 must be inter-

preted as meaning that, in circumstances such as those of the main proceedings, a supply of goods by a taxable person established in a first Member State is not exempt (zero rated) from VAT under that pro-vision where, prior to entering into that supply trans-action, the person acquiring the goods, who is iden-tified for VAT purposes in a second Member State,




informs the supplier that the goods will be resold immediately to a taxable person established in a third Member State, before he takes them out of the first Member State and transports them to that third taxable person, provided that that second supply has in fact been carried out and the goods have then been transported from the first Member State to the Member State of the third taxable person. The fact that the first person acquiring the goods is identified for VAT purposes in a Member State other than that of the place of the first supply or that of the place of the final acquisition is not a criterion for classifica-tion of an intra-Community transaction or, in itself, evidence sufficient to show that a transaction is an intra-Community one.

(2) For the purposes of interpreting Article 138(1) of Directive 2006/112, processing of the goods, in the course of a chain of two successive supplies, such as that at issue in the main proceedings, carried out on the instructions of the middleman acquiring the goods and before the goods are transported to the Member State of the person finally acquiring them, has no effect on the conditions for any exemption (zero rating) of the first supply where that processing takes place after the first supply.”

ECLI:EU:C:2017:599.

Judgment of 6 July 2017: Case C-392/16 Dumitru Marcu v. Agenția Națională de Administrare Fiscală (ANAF) – Direcția Generală Regională a Finanțelor Publice București

Mr Marcu sold 35 of his immovable properties, i.e. land and apartments, to persons non-registered and registered for VAT purposes in Romania. He did not charge Roma-nian VAT on those transactions.

After the Romanian tax authorities carried out an audit of Mr Marcu, they found that Mr Marcu should have been a taxable person and that he had exceeded the Romanian VAT registration threshold. Therefore, the immovable property transactions should have been subject to Roma-nian VAT.

In that regard, the Romanian tax authorities noted that Mr Marcu had not registered for VAT purposes as required within 10 days after exceeding the VAT regis-tration threshold. The Romanian tax authorities subse-quently imposed a VAT assessment with respect to all the immovable property transactions from the date Mr Marcu should have been registered for VAT purposes in Romania. Mr Marcu did not agree on the VAT assessment, stating that he reverse charged the VAT liability to his cus-tomers registered for VAT purposes, and brought the case before the Romanian court.

As regards the questions of the Curtea de Apel București (Court of Appeal, Bucharest) whether the Sixth Directive and the VAT Directive preclude a rule of national law or a national tax practice according to which the reverse charge mechanism is applicable only provided that the supplier and the recipient of the asset involved are both registered for VAT at the time when the transaction takes

place, failure to satisfy that condition having the conse-quence that, under the normal rules of the VAT system, the supplier is liable to pay that tax, the ECJ recalled that it cannot rule in a case where the problem is hypothetical, or where it does not have the factual or legal material neces-sary to give a useful answer to the preliminary questions.

In this regard, the ECJ stated that it is necessary to assess whether the immovable property supplies could have been subject to the reverse charge mechanism. In this regard, the ECJ emphasized that the reverse charge mechanism is an exception to the rule that the VAT due on a supply is payable by the taxable person carrying out the supply. For supplies of immovable property, the VAT liability can only be reverse charged to the customer in case the sup-plier opted for a taxable supply.

With respect to supplies of immovable property, the ECJ recalled that Member States are obliged to exempt such supplies from VAT. They have, however, the possibility to allow taxable persons a right to opt for such a supply to be subject to VAT. This option is possible for (i) the supply of a building or parts thereof and of the land on which it stands after first occupation and (ii) the supply of land that has not been built on, not being the supply of building land.

The ECJ concluded that only when a Member State has opted to allow its taxable persons the option for a taxable supply of immovable property and one of those taxable persons has exercised that option, a reverse charge mech-anism may be applied. From the Romanian VAT legis-lation, the ECJ cannot derive that Romania has imple-mented such an option.

Even if the Romanian VAT legislation included such an option, it follows from the facts that Mr Marcu did not use it, as he was not registered for Romanian VAT pur-poses and did not fulfil the conditions. Furthermore, if the transactions concerned the supply of a building or parts of a building or land on which the building stands before first occupation or the supply of building land, it is not possible to reverse charge the VAT liability to the customer, as this is not one of the possibilities in the VAT Directive.

Taking the above into account, the ECJ ruled that the reverse charge mechanism cannot be applied on the sup-plies of immovable property concerned. The preliminary ruling request is therefore hypothetical and the prelimi-nary ruling request is inadmissible.

On those grounds, the ECJ (Ninth Chamber) ruled that:

“The request for a preliminary ruling made by the Curtea de Apel Bucureşti (Court of Appeal, Bucharest, Romania) is inadmissible.”

ECLI:EU:C:2017:519.

3. Recent Opinions

In the following VAT cases, which were pending before the ECJ on 31 August 2017, one of the Advocates General of the ECJ had delivered an Opinion before that date.


Fabiola Annacondia


Opinion of 13 July 2017: Case C-574/15 Mauro Scialdone

In 2013, a company established in Italy failed to pay cor-rectly declared VAT within the prescribed deadline, for an amount equal to EUR 175,272. After receiving a debt notice from the tax authorities, the company opted to pay the amount due in instalments.

At that time, the threshold above which failure to pay with-holding tax and VAT due constituted a criminal offence was EUR 50,000. Consequently, a criminal procedure was initiated against the company’s director. However, while the criminal proceedings were ongoing, legislation was amended and the relevant threshold was increased to EUR 250,000 for unpaid VAT (and EUR 150,000 for unpaid withholding tax).

As regards the questions of the Tribunale di Varese (Dis-trict Court, Varese, Italy) of whether the amendments made by Legislative Decree 158/2015 regarding failure to pay declared VAT are compliant with EU law (the referring court has posed its questions with regard to article 4(3) of the Treaty on European Union (TEU), article 325 of the

Treaty on the Functioning of the EU (TFEU), the Con-vention on the Protection of the European Communities’ Financial Interests (PIF Convention) and the VAT Direc-tive), AG Bobek delivered his Opinion on 13 July 2017.

Firstly, the AG analysed the EU law provisions applicable to the present case.

The AG stated that VAT falls within the scope of the PIF Convention. In particular, with respect to the exclusion of VAT from the notion of “revenue” in article 1(1) of the PIF Convention, provided in a subsequent explanatory report, the AG stressed that the exclusion of one component of the system of the European Union’s own resources from the scope of the PIF Convention would amount to a sig-nificant amendment to its system and objectives, which cannot be made by way of a mere explanatory report. The AG then nevertheless affirmed that the offence concern-ing the failure to pay correctly declared VAT within a pre-scribed deadline is not covered by the notion of “fraud” in article 1(1)(b) of the PIF Convention. The AG noted that, even if it may be intentional and have as an effect the dim-inution of tax revenue, the offence does not entail (i) false,

Pending cases – AG’s Opinion delivered: Article(s) of AG’s Opinion Keywords

Case Parties involved Sixth Directive

Directive 2006/112

Date IVM

C-326/15 DNB Banka – 132(1)(f) 01-03-2017 2(2017) exemption – Independent groups of persons established in different member States

C-574/15 Scialdone 325 TFeU1 1, 2 pIF2

13-07-2017 See below payment of VAT – penalties

C-605/15 Aviva Towarzystwo – 131, 132 (1)(f)

01-03-2017 2(2017) exemption – Independent group of persons

C-616/15 Commission/Germany – 132(1)(f) 05-04-2017 3(2017) exemption – Independent group of persons

C-90/16 english Bridge Union – 132(1)(m) 15-06-2017 4(2017) Sport – Duplicate contract bridge

C-101/16 SC paper Consult – 168 31-05-2017 4(2017) Inactive taxable person – right to deduct VAT

C-132/16 Iberdrola Inmobiliaria real estate Investments

– 26(1)(b), 168(a), 176

06-04-2017 3(2017) right to deduct VAT

C-164/16 mercedes Benz Financial Services UK

– 14(2)(b) 31-05-2017 4(2017) Option to purchase – economic purpose of the contract

C-246/16 enzo di maura 11(C)(1), 20(1)(b)

90, 185 08-06-2017 4(2017) Adjustment of the taxable amount – Totally or partially unpaid

C-262/16 Shields & Sons partnership – 296(2), 299 28-06-2017 See below Flat-rate scheme for farmers

C-303/16 Solar electric martinique 5(5), 6(1) 14(3), 24(1) 29-06-2017 See below Works of construction

C-308/16 Kozuba premium Selection – 12(1)(a) and (2), 135(1)(j)

04-07-2017 See below exemption – Buildings and civil engineering works

C-374/16 rGeX – 226(5) 05-07-2017 See below right to deduct VAT – Invoice requirements

C-375/16 Butin – 226(5) 05-07-2017 See below right to deduct VAT – Invoice requirements

C-462/16 Boehringer Ingelheim pharma – 73, 90 11-07-2017 See below Taxable amount – reduction

1. Treaty on the Functioning of the European Union (TFEU), OJ L115 (2008).2. Convention on the Protection of the European Communities’ Financial Interests (PIF Convention).




incorrect or incomplete statements or documents, or (ii) non-disclosure of information, or (iii) misapplication of a legally obtained benefit. Consequently, the PIF Conven-tion is not applicable to the present case.

With respect to article 325 of the TFEU, the AG stated that the offence at issue is liable to affect the financial interests of the European Union, because it does not only concern the late payment of VAT due, but the potential failure to pay it. In addition, the AG pointed out that, while article 325(2) of the TFEU only covers measures aimed at coun-tering fraud, article 325(1) of the TFEU sets out a general obligation of Member States to counter fraud and any other illegal activities and to adopt measures to protect the financial interests of the European Union, in accor-dance with the principle of sincere cooperation enshrined in article 4(3) of the TFEU and EU Treaty.

Finally, the AG stated that article 206 of the VAT Directive, establishing the obligation of taxable persons to pay VAT when submitting the relevant tax return, and article 273 of the Directive, allowing Member States to also impose other obligations which they deem necessary to ensure correct collection of VAT and prevent evasion, also apply to the present case. The AG noted that the VAT Directive does not provide any further specific collection rules and the choice of appropriate sanctions remains within the discretion of the Member States, which is, however, not unlimited. In the absence of a specific provision, article 4(3) of the TEU requires Member States to adopt effective measures against conducts detrimental to the European Union’s financial interests and penalties must be effec-tive, proportionate and dissuasive, but not necessarily of a criminal nature.

Secondly, the AG proposed a response to the questions referred.

With respect to the first question, the AG noted that the two offences concerning the failure to pay VAT and the failure to pay withholding tax are comparable, but the adoption of different thresholds triggering criminal pen-alties can be justified. Member States are entitled to make their own legislative choices and the Italian government offered plausible reasons to justify the different treatment, which mainly related to the degree of seriousness and the difficulty of discovery and collection. Consequently, the AG opined that article 4(3) of the TEU, read in conjunc-tion with article 325(1) of the TFEU and the VAT Direc-tive, does not preclude the adoption of a financial thresh-old which is higher for VAT than for withholding tax.

According to the AG, the second question is inadmissi-ble, in light of the proposed answers to the first and third questions.

With respect to the first part of the third question, the AG stated that, due to the fact that the PIF Convention is not applicable to the present case, because the concept of fraud in article 1 does not cover the failure to pay VAT or its partial or late payment, Member States are not required to punish these conducts with imprisonment when concern-ing sums exceeding EUR 50,000. Similarly, with respect to the second part of the third question, the AG affirmed

that the threshold referred to by the PIF Convention is not relevant for the offence at issue, because such an offence is not covered by the notion of fraud contained in the PIF Convention.

Finally, the AG analysed the effects of a potential incom-patibility between the national legislation at issue and applicable EU law, should the ECJ reach different conclu-sions. In particular, the AG pointed out that the legality principle precludes the possibility to disapply more lenient criminal provisions in the course of ongoing criminal proceedings, even if those rules are found to be incom-patible with EU law.

On those grounds, the AG proposed that the ECJ should answer the questions of the Tribunale di Varese (District Court, Varese, Italy) as follows:“(1) The concept of fraud in Article 1(1)(b) of the PIF Con-

vention on the protection of the European Commu-nities’ financial interests does not cover an offence, such as the one at issue in the main proceedings, con-cerning the failure to pay correctly declared VAT within the deadline set by law.

(2) Article 4(3) TEU, read in conjunction with Article 325(1) TFEU and the VAT Directive, does not pre-clude national provisions establishing, for the pur-poses of determining the punishable character of the conduct consisting in failure to pay a tax by the legal deadline, a financial threshold which is higher for VAT than the one provided for withholding tax.

(3) The duty to provide effective, dissuasive and pro-portionate penalties to ensure correct collection of VAT imposed by Article 325(1) TFEU and Article 4(3) TEU, read in conjunction with VAT Directive, does not preclude national legislation, such as that at issue in the present case, which, while providing for a system of administrative sanctions, exempts natural persons responsible for tax matters:

– from criminal and administrative liability for failure to pay correctly declared VAT within the deadline set by law in relation to sums equivalent to three or five times the minimum threshold of EUR 50,000 laid down by the PIF Convention;

– from criminal liability if the entity with regard to which they operate has made late payment of the VAT due, as well as interest and the amounts imposed by administrative sanctions, before the trial at first instance is declared open.”

ECLI:EU:C:2017:553.

Opinion of 28 June 2017: Case C-262/16 Shields & Sons Partnership v. The Commissioners for Her Majesty’s Revenue and Customs

The undertaking, Shields & Sons Partnership, ran a farm and carried out the activity of breeding cattle, which qual-ified for the common f lat-rate scheme for farmers in the United Kingdom. By decision of 15 October 2012, the tax authorities revoked the certificate that authorized the undertaking to participate in the common f lat-rate scheme on the basis that it had been found to be recover-


Fabiola Annacondia


ing substantially more than it could have recovered if it had been regularly registered for VAT purposes.

As regards the questions of the Upper Tribunal (Tax and Chancery Chamber) (United Kingdom) of whether and, if so, on what basis a Member State can exclude from the common f lat-rate scheme a farmer who, being in that scheme, obtains substantially more by way of f lat-rate compensation than the amount of VAT which he would be entitled to recover if he were subject to the normal arrangements, AG Szpunar delivered his Opinion on 28 June 2017.

The AG pointed out that the common f lat-rate scheme for farmers provided by the VAT Directive serves two pur-poses and, since it derogates from the general rule that in principle every supply of goods and services against remuneration is subject to VAT, it must be applied only to the extent necessary to achieve them. In particular, the scheme enables qualifying farmers (i) to be exempt from a series of administrative obligations by simultaneously removing the obligation to pay VAT due and the oppor-tunity to deduct input VAT, and (ii) to offset the costs of VAT charged on purchases of goods or services used for the purposes of their activities, in line with the principle of fiscal neutrality. However, because the compensation percentage is calculated on an overall basis, in relation to all participating farmers, neutrality is also only main-tained on an overall basis. Therefore, a specific farmer may receive a higher or lower compensation than the amount of VAT charged in a given tax year.

With respect to the first question referred, the AG stated that, under article 296(2) of the VAT Directive, a farmer may be excluded from the common f lat-rate scheme where (i) he falls under a general exclusion of certain categories of farmers set by the Member State or (ii) the application of the regular arrangements or simplified procedures does not give rise to difficulties for a farmer. This second exclu-sion is usually linked to the size of the farm or the amount of turnover, based on the presumption that a farm of a specific size can fulfil the required administrative obliga-tions. This provision concerns exclusions from the scheme ex ante. Cases of exclusion ex post may only arise where the qualifying farmer ceases to fulfil the criteria for adher-ence to the common f lat-rate scheme. In the AG’s opinion, the exclusion of a farmer can only take place on the basis of the mentioned provision and not on other grounds.

In that regard, the AG added that article 299 of the VAT Directive sets out guidelines for Member States with regard to the f lat-rate compensation percentages, which have to be determined, under article 298(1) of the VAT Directive, on the basis of macroeconomic statistics for all participating farmers. Therefore, it cannot constitute a basis for the issuing of individual decisions concern-ing individual farmers because the relevant regulations concern all participating farmers and not each of them individually. Furthermore, article 295(1)(6) of the VAT Directive defines input VAT as being the total amount of VAT charged on purchases of goods and services by all participating farmers. Therefore, it cannot be inter-preted as meaning that individual farmers are precluded

from obtaining compensation that exceeds the VAT actu-ally paid.

The AG emphasized that Member States have at their disposal a series of instruments to ensure that a partici-pating farmer has not obtained compensation exceeding the VAT that he would be entitled to recover under the regular arrangements and must make use of them because such excessive compensation is contrary to the nature of the scheme and may constitute aid for certain farmers. Therefore, a Member State may not cancel out the negative effects of its action (or lack of action) on a macroeconomic level by means of measures directed against individual economic operators. A farmer fulfilling the required cri-teria should legitimately expect that he will have the right to access the scheme and remain in it, irrespective of his actual financial results; otherwise, the purposes of the common f lat-rate scheme would not be achieved.

With respect to the second question referred, the AG pointed out that article 296(2) of the VAT Directive allows Member States to exclude certain categories of farmers from the common f lat-rate scheme. These excluded cate-gories must be defined in advance and in an abstract way, to provide that a farmer faced with the potential deci-sion about entering the scheme is in a position to assess whether he belongs, or will belong in the future, to a cat-egory that is subject to exclusion, as required by the prin-ciples of legal certainty and of the protection of legitimate expectations.

The AG, however, suggested that the automatic exclusion of a given farmer who is found to be recovering substan-tially more as member of the common f lat-rate scheme than it would if it was regularly registered for VAT pur-poses is not in line with the VAT Directive as it is not con-sistent with the logic of the scheme. In addition, such an exclusion would be based on a premise that is not fore-seeable and largely not dependent on the decisions of the taxable person concerned. Finally, the AG also noted that the exclusion does not fulfil the required criteria of clarity and precision, and it is more of an entitlement for the tax authorities to exclude specific farmers than a systematic exclusion, defined in advance and in an abstract way.

On those grounds, the AG proposed that the ECJ should answer the questions of the Upper Tribunal (Tax and Chancery Chamber) (United Kingdom)) as follows:“(1) Articles 295 to 305 of the VAT Directive should be

interpreted as meaning that the only acceptable premises for the exclusion of a f lat-rate farmer from the common f lat-rate scheme for farmers governed by those provisions are those set out in Article 296(2) of that directive.

(2) Article 296(2) of the VAT Directive should be inter-preted as not authorizing the exclusion from the f lat-rate scheme of the category of farmers defined as farmers who are found to be recovering substantially more as members of that scheme than they would recover if they were registered for purposes of VAT.”

ECLI:EU:C:2017:500.




Opinion of 29 June 2017: Case C-303/16 Solar Electric Martinique v. Ministre des finances et des comptes publics

Solar Electric Martinique’s business includes the sale and installation of solar power equipment in the department of Martinique. Between 1 January 2005 and 31 December 2007 it charged VAT, at the rate of 8.5%, on the installa-tion of photovoltaic and solar water heating panels on the roofs of residential buildings only in respect of the cost of the installation services, as it considered that the supply of that equipment benefited from the exemption provided under article 295 of the General Tax Code.

The tax authorities considered that transactions con-sisting in the installation of photovoltaic and solar water heating panels were in the nature of works of construc-tion and must therefore include the cost of the supply of that equipment. They therefore adjusted the taxable basis of the relevant transactions. On 21 September 2010, Solar Electric Martinique brought an action before the tribunal administratif de Fort-de-France (Administrative Court, Fort-de-France) (France), seeking cancellation of the addi-tional assessments of VAT issued by the tax authorities.

The Conseil d’État stated that the sale and installation of the equipment mentioned in article 295 of the General Tax Code are subject to VAT only in respect of the cost of installation, excluding the cost of the acquisition of the equipment, except where the installation may be charac-terized as a supply of works of construction, in which case it is subject to VAT in respect of the total amount charged to the customer. It also observed that, while article 295 of the Code applies only in the overseas departments, that is to say, outside the territorial scope of the Sixth Direc-tive, article 256 of the Code, on works of construction, also applies in metropolitan France and transposes into French law articles 5(5) and 6(1) of the Sixth Directive, the provisions of which were re-enacted in articles 14(3) and (1) of the VAT Directive.

According to the Conseil d’État, it is necessary to seek a uniform application of the provisions of those direc-tives within the European Union. Therefore, although the dispute which it must resolve relates to transactions carried out outside the territorial scope of those directives, the question arises whether the sale and installation of photovoltaic and solar water heating panels on buildings or with a view to supplying buildings with electricity or hot water are a single transaction in the nature of works of construction, within the meaning of those directives.

As regards the question of the Conseil d’État of whether the supply and installation of photovoltaic and solar water heating panels on the roof of a building in order to supply that building with electricity or hot water had to be anal-ysed for VAT purposes as a single complex transaction or as a number of separable transactions, AG Mengozzi of the ECJ delivered his Opinion on 29 June 2017.

The AG started by pointing out that the ECJ should declare that it lacks jurisdiction to answer the question referred by the Conseil d’État. The facts giving rise to the present case took place solely in Martinique, which is expressly

excluded from the territorial scope of the Sixth Directive, and the main proceedings therefore fall outside the scope of the relevant provisions of EU law. In order to determine whether it has jurisdiction to answer the question referred to it, the ECJ should ascertain whether there are suffi-ciently precise indications that allow it to establish that national law has made such a direct and unconditional reference to EU law. The question for a preliminary ruling is the result of France’s refusal to exercise the option pro-vided for in article 5(5) of the Sixth Directive (article 14(3) of the VAT Directive) in conjunction with the application of an exemption in favour of the French overseas depart-ments, which can be granted by French law only on the ground that those departments are themselves expressly excluded from the scope of those directives.

Therefore, the AG only examined the question referred in the alternative. Regarding the single or distinct nature of the transactions in question, for the purposes of VAT, each transaction must normally be regarded as distinct and independent, unless one of the two exceptions to the basic rule applies. The French government characterizes the two transactions as a single complex supply. Contrary to the French government’s assertion, it cannot be inferred from the ECJ judgment in NN9 that the supply of a physical asset and its subsequent installation by the same taxable person form a single complex operation for the purposes of VAT merely because the installation is necessary in order to ensure that the physical asset can function. In order to assess whether one or more supplies for VAT pur-poses take place, the time from which the transfer of own-ership to the Solar Electric Martinique’s customers takes effect is decisive, more explicitly whether it does so before or after the equipment is installed and put into service. It is for the referring court to ascertain this.

If the referring court concludes there is a single complex supply, the predominant element must be determined in order to assess whether it is a supply of goods or services. The installation, by superimposition, of the photovoltaic panels does not in any way appear to constitute a clearly predominant part of the total cost of the complex single transaction, as the services of the supplier appear to be limited to installing those panels, without altering their nature and without adapting them to the specific require-ments of customers. If the transfer of ownership of the photovoltaic and solar water heating panels takes place after they have been installed and put into service, that transaction would have to be exempt from VAT, in appli-cation of the special arrangement applicable to the over-seas departments under article 295 of the General Tax Code. The AG concluded that, at the time of the facts of the main proceedings, there was no indication in article 5(5) of the Sixth Directive or article 14(3) of the VAT Direc-tive to suggest that any installation of moveable property, such as a photovoltaic panel or a solar water heating panel of the type of those at issue in the main proceedings, on an immovable property would constitute a work of con-struction.

9. SE: ECJ, 29 Mar. 2007, Case C-111/05, Aktiebolaget NN v Skatteverket, ECJ Case Law IBFD.


Fabiola Annacondia


On those grounds, the AG proposed that he ECJ should answer the question of the Conseil d’État (Council of State) (France) as follows:

“the Court should declare that it lacks jurisdiction to answer the request for a preliminary ruling submitted by the Conseil d’État (Council of State) (France).”

ECLI:EU:C:2017:507.

Opinion of 4 July 2017: Case C-308/16 Kozuba Premium Selection sp. z o.o. v. Dyrektor Izby Skarbowej w Warszawie

In 2005, Kozuba Premium Selection sp. z o.o. (“Kozuba”) increased its share capital by the value of a building (cottage) contributed in kind by one of the shareholders. In 2006, the building was modernized, adapted to the business activity of Kuzuba and included in the record of fixed assets. The upgrade costs constituted 55% of the initial value of the building. On 31 July 2007, the build-ing was entered into Kozuba’s register of fixed assets (“show home”), where it remained until 15 January 2009. On 15 January 2009, it was removed from the register of fixed assets, since it was sold to a third party. Since the building was not new, the company claimed that the sale was exempt from VAT. Subsequently, the tax authori-ties assessed a higher VAT liability of Kozuba due to the increased taxable base by the sale price of the building. They argued that Polish VAT Law envisages an exemp-tion from VAT on the sale of buildings after “first occu-pancy”, which occurs only in connection with a taxable activity. As such, even if the building was designated for business purposes in 2007, there was no “first occupancy” at that time because its putting into service did not occur within a taxable activity. Therefore, the “first occupancy” took place in 2009 at the time of the sale of the building.

As regards the questions of the Naczelny Sąd Adminis-tracyjny (Supreme Administrative Court) of whether article 135(1)(j) of the VAT Directive must be interpreted as precluding a national provision under which the supply of buildings, civil engineering works or parts thereof is exempt from VAT except when: (a) the supply is made within the framework of the first occupation or prior to the first occupation, (b) the period between the first occu-pation and the supply of the building, civil engineering works or parts thereof was shorter than two years, in so far as the Law on VAT defines first occupation as release for use of buildings, civil engineering works or parts thereof, in performance of taxable activities, to the first customer or user, following their erection or upgrade, if the expenditure incurred for the upgrade, as defined in the regulations on income tax, constituted at least 30% of the initial value, AG Campos Sanchez-Bordona delivered his Opinion on 4 July 2017.

As regards first occupancy, the AG stated that, based on article 135(1)(j) of the VAT Directive, the supply of build-ings is exempt from VAT, except for buildings listed under article 12(1)(a) of the VAT Directive. This exception applies irrespective of whether a Member State has exercised its power to extend the exemption to taxable persons acting

on an occasional basis. It needs to be investigated whether the supply of the building took place before its first occu-pancy, for which a key element is the fact that a building is not new. Article 12(2) of the VAT Directive empowers Member States to define the conditions for the application of what is “supply before first occupancy” in view of mod-ernization of buildings. In this way, the VAT Directive allows taxation not only of the supply of “new” buildings but also “used” and “old” buildings if they are modern-ized to the extent that they correspond to new buildings.

Under the Polish VAT Law, where an owner or a contrac-tor uses the building for his own purposes for a specified period of time, as is the case in the main proceedings, the subsequent sale of that building is not exempted from VAT because it does not meet the condition of “first occu-pancy”. This is due to the fact that the “first occupancy” did not occur in connection with a transaction subject to VAT (taxable transaction).

The AG concluded that the actual occupancy of a build-ing by the contractor for his own needs for more than two years (as occurred in the main proceedings), irrespective of whether it is considered a taxable activity, means the first supply of the building, so that when the building is subsequently sold, the sale will be exempt from VAT.

As regards the modernization of a building, the AG observed that there is no doubt that the building was subject to modernization, the cost of which was 55% of the initial value of the building. The question remains whether the concept of modernization included in the Polish VAT Law is in line with the VAT Directive, which in fact does not define “modernization”. As such, Member States specify when and under what conditions the mod-ernization takes place. According to the Polish VAT Law, “modernization” of a building occurs if the expenses incurred with regard to the improvement represent at least 30% of the initial value of the building. Such improve-ments contribute value to the building, which is a prereq-uisite for (future) VAT settlement, when the building is sold. It is the responsibility of the national tax authorities (or the national court) to assess whether the expenses at issue correspond to actual improvements of the building rather than to routine maintenance or pure decoration.

On those grounds, the AG proposed that the ECJ should answer the questions of the Naczelny Sąd Administracy-jny (Supreme Administrative Court, Poland) as follows:

“Article 135(1)(j) in conjunction with Article 12(1)(a) and (2) of the VAT Directive must be interpreted as: (1) precluding the “first occupation” of buildings, civil

engineering works or parts thereof necessarily being linked to the performance of taxable activities for the purposes of VAT.

(2) not preventing a Member State from considering, for the purposes of VAT-exemption, that a building has undergone a conversion where the cost of the improvement is at least 30% of the initial value of the building, provided that the improvements are of a substantial nature and affect structural elements. ”

ECLI:EU:C:2017:510.




Opinion of 5 July 2017: Joined Cases C-374/16 and C-375/16 RGEX GmbH, in liquidation, represented by Rochus Geissel, liquidator v. Finanzamt Neuss and Finanzamt Bergisch Gladbach v. Igor Butin

Case C-374/16

RGEX GmbH was a company that traded in motor vehi-cles. In its original VAT return for 2008, RGEX declared VAT zero-rated intra-Community supplies of motor vehi-cles and input VAT deductions relating to motor vehicles purchased from EXTEL GmbH. The German tax author-ities did not agree with RGEX’s VAT return and imposed a VAT assessment. The German tax authorities stated that the intra-Community supplies of motor vehicles to Spain were subject to VAT on the ground that the motor vehi-cles had not been delivered to Spain, but had been sold in Germany. Furthermore, it stated that the input VAT was not deductible, because EXTEL was considered a “ghost company”, which did not have any establishment at the address stated in the invoice.

Case C-375/16

Mr Igor Butin, who ran a car dealership in Germany, deducted input VAT on invoices relating to a number of vehicles acquired from Z and destined for resale. Since Z operated exclusively on the Internet, the vehicles were in some cases delivered to Mr Butin at the address where Z had its corporate seat – even though Z did not run a deal-ership from that address – and sometimes in public places, such as railway station forecourts. In the course of a tax audit, the German tax authorities took the view that the input VAT could not be deducted because the supplier’s address was incorrect. Nothing at that address would indi-cate the presence of an undertaking: it served as a letterbox address from which Z merely collected the post.

As regards the questions of the Bundesfinanzhof (Federal Finance Court, Germany) of whether article 226(5) of the VAT Directive precludes national legislation that subjects the right to deduction of VAT to the indication on the invoice of the address where the issuer carries out its eco-nomic activity; whether, and if so how, a taxable person should be able to invoke his good faith when the address indicated on the invoice is incomplete or erroneous; and whether the fact that the applicant can claim the right to deduct only in a separate equitable procedure is consistent with article 168(a), in conjunction with article 178(a), of the VAT Directive, having regard to the principle of effec-tiveness, AG Wahl delivered his Opinion on 5 July 2017.

As regards the first issue, the AG recalled that the right to deduct input VAT is a key element of the system of VAT established by the VAT Directive, which in principle may not be limited, provided that a taxable person meets the substantive requirements for deduction. The AG contin-ued pointing out that the ECJ has consistently adopted a realistic and pragmatic approach to the interpretation of the EU VAT rules, instead of following a more formalistic one. The national legislation in question therefore appears to be incompatible with the ECJ approach.

The AG further noted that nothing in the text of the VAT Directive supports a strict interpretation of the require-ment of “address” in article 226(5) of the VAT Directive in the form of requiring the existence of actual economic activity or tangible presence at an address, provided that the person can actually be reached at such an address. Such a strict interpretation would also not be justified in the light of the function of the invoice within the VAT system. An invoice is designed to indicate an economic transaction and enable the tax authorities to monitor payment and declaration of the VAT due and the right to deduct input VAT by the customer. The function of stating an address in the invoice is to be linked to the function of the invoice and identify the issuer of an invoice in order to establish a link between an economic transaction and a specific economic operator. The AG opined that the exis-tence of an actual economic activity or a tangible presence of a trader’s business at the address stated in the invoice is therefore not necessary.

Furthermore, the AG stated that the requirement that an economic activity must be exercised at the address stated in an invoice is not convincing in light of the recent eco-nomic developments, such as the rise of e-commerce, increased office sharing and teleworking. In view of these developments, it is difficult to pin down an economic activity to one particular physical location.

Finally, the AG stated that the views of the German tax authorities are difficult to reconcile with recent ECJ case law. The ECJ judged that, for the right to deduct VAT, it is not a requirement that economic activities are carried on at the address stated in the invoice, even in the case of a non-existing trader. It is sufficient that the supplier can be promptly and effectively contacted at that address.

With regard to the second issue, the AG noted that there is no need to answer those questions as they are based on the premise that a taxable person has to exercise an eco-nomic activity at the address stated in the invoice. The AG, however, addressed the issues in case the ECJ’s answer to the first issue diverges from the AG’s opinion.

The AG recalled that a taxable person can be refused the right to deduction if it knew or should have known that it was part of a transaction connected with VAT fraud. Therefore, this right can be refused if the taxable person is shown to have acted recklessly, without demonstrating the diligence that can be expected from a reasonably circum-spect trader. The AG considered that it is unreasonable to oblige a taxable person to carry out in-depth or time-con-suming checks on the accuracy and correctness of the formal data included in each invoice of all of its suppli-ers. Such an obligation would be neither practical nor eco-nomically feasible. The AG recalls that it is, in principle, for the tax authorities to carry out the necessary inspec-tions of taxable persons in order to detect VAT irregu-larities and fraud, as well as to impose penalties on the taxable person that has committed those irregularities or fraud. When a taxable person finds concrete indications for fraud or abuse, it may be expected to make certain additional inquiries regarding its supplier. However, the tax authorities may not require a taxable person to under-


Fabiola Annacondia


take complex and far-reaching checks. The latter would, for example, be the case if a taxable person were required to verify that the address of a supplier in an invoice is where the latter actually exercises its economic activities or has business premises, or that the supplier is lawfully or genuinely established at that address. The AG therefore opined that the right to deduct input VAT can be refused if the taxable person was not in good faith as regards the existence of related fraud or abuse (because it was, or should have been, aware of it). This is the case regardless of whether the formal conditions in the invoices relating to those transactions are fulfilled.

Finally, the AG considered the issue of whether the fact that a taxable person can claim the right to deduct only in a separate equitable procedure is in accordance with EU law. Although the AG stated that this question is not to be answered as the letterbox address is sufficient for the right to deduct input VAT, the AG recalled that, in accordance with the principle of procedural autonomy, it is, in the absence of EU rules, for the Member States to establish internal procedures to prevent VAT fraud. It is for the domestic legal system of each Member State to designate the tax authorities responsible for combating VAT fraud and to lay down detailed procedural rules to safeguard rights which are derived from EU law. However, such rules may not be less favourable than those govern-ing similar domestic actions (principle of equivalence) and may not render impossible in practice or excessively difficult the exercise of rights conferred by the EU legal order (principle of effectiveness). According to the AG, the ECJ does not have sufficiently detailed information on the national procedure in the case at hand. The refer-ring court should therefore assess whether the procedural rules are in accordance with the principles of EU law. In its analysis, the referring court should especially consider whether the length, complexity and costs associated with that special procedure create disproportionate difficul-ties for the taxable person. The AG nevertheless stated that he is not sure whether the national procedural rules in question are in accordance with EU law. The right to deduct input VAT is derived from the VAT Directive and not from equity.

On those grounds, the AG proposed that the ECJ should answer the questions referred by the Bundesfinanzhof (Federal Finance Court, Germany) as follows:“– Article 226(5) of the VAT Directive precludes national

legislation that subjects the right to deduction of value added tax to the indication on the invoice of the address where the issuer carries out its economic activity.

– Article 168(a) and Article 178(a) of the VAT Direc-tive preclude national legislation according to which, where the formal conditions of invoices are not ful-filled, deduction is granted only if the taxable person proves that he took every measure that could reason-ably be required of him in order to satisfy himself that the content of the invoice was correct.

– It is for the national court to assess whether the national procedural rules under which a taxable person may invoke his good faith regarding the integ-

rity of the invoice are compatible with the principle of effectiveness, in the light in particular of the length, complexity and costs associated with the relevant procedures.”

ECLI:EU:C:2017:515.

Opinion of 11 July 2017: Case C-462/16 Finanzamt Bingen-Alzey v. Boehringer Ingelheim Pharma GmbH & Co. KG

Boehringer is a pharmaceuticals company which manu-factures medicinal products and supplies those products to pharmacies through wholesalers. Two situations may be distinguished in this regard.

First, Boehringer’s pharmaceutical products are supplied by pharmacies to public health insurance funds which, in turn, make them available to insured persons. The phar-macies grant the public health insurance funds a discount on the price of the medicinal products. As a pharmaceu-ticals company, Boehringer is required, under German law, to reimburse the pharmacies for this discount. The tax authorities treat the discount as a reduction in remu-neration for VAT purposes.

Second, pharmacies issue Boehringer’s pharmaceutical products to persons with private health insurance. Unlike public health insurance funds, private health insurance funds are not the buyer of the products, but merely reim-burse the insured persons for the costs incurred in pur-chasing the pharmaceutical products. Boehringer is also required, under German law, to grant the private health insurance funds a discount on the price of the medicinal products. The tax authorities do not regard this discount as a reduction in remuneration for VAT purposes.

As regards the questions of the question of the Bundes-finanzhof (Federal Finance Court, Germany) of whether based on the case law of the ECJ in Elida Gibbs10 (Case C-317/94) and having regard to the principle of equal treat-ment under EU law, a pharmaceutical company which supplies medicinal products is entitled to a reduction of the taxable amount under article 90 of the VAT Directive in the case where it supplies those medicinal products to pharmacies via wholesalers, the pharmacies supply those products, subject to tax, to persons with private health insurance, the insurer of the medical expense insur-ance (the private health insurance company) reimburses the persons insured by it for the costs of purchasing the medicinal products, and the pharmaceutical company is required to pay a “discount” to the private health insur-ance company pursuant to a statutory provision, AG Tanchev delivered his Opinion on 11 July 2017.

At the outset, the AG referred to the ECJ decision in Elida Gibbs, reiterating that it is unnecessary for a taxable person to be contractually linked to the direct beneficiary of a dis-count before that discount can amount to a price reduc-tion after the supply takes place, for the purposes of article 90 of the VAT Directive. Furthermore, the AG stated that

10. UK: ECJ, 24 Oct. 1996, Case C-317/94, Elida Gibbs Ltd v. Commissioners of Customs and Excise, ECJ Case Law IBFD.




the decision in Elida Gibbs is not restricted to situations where the recipient of a discount is the final consumer in a supply chain beginning with the taxable person provid-ing the discount.

From the ECJ decision in International Bingo Technol-ogy11 (Case C-377/11), the AG derived that the taxable amount, within the meaning of article 73 of the Direc-tive, should not include a fixed and mandatory amount paid as winnings for a bingo card game. This is because “the proportion of the card price which is paid as winnings to players is fixed in advance and is mandatory”. Accord-ing to the AG, the same judgment is also applicable in a case where article 90 of the VAT Directive applies. The AG was of the opinion that Boehringer had not had at its free disposal the full amount of the price received at the first sale of its products to pharmacies or wholesalers. At most, Boehringer was a “mere temporary custodian” of the part of the amount received that it was bound to pay later to public and private health funds as a rebate and which was indexed to the price of the pharmaceutical products supplied.

Furthermore, the AG stated that the fact that a private insurance fund is not the direct beneficiary of the medic-inal products supplied by Boehringer does not break the direct link between the supply of those goods and the con-sideration received.

In the AG’s opinion, such an approach would have the effect that the basis of assessment is the consideration actually received, which translates with respect to article 90 of the VAT Directive into a requirement to reduce the taxable amount whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person.

The AG stated that the two discounts can only be differ-entiated by their technical characteristics, even though

11. ES: ECJ, 19 July 2012, Case C-377/11, International Bingo Technol-ogy, S.A. v. Tribunal Económico Administrativo Regional de Cataluña (TEARC), ECJ Case Law IBFD.

their tax treatment for VAT purposes is different. Based on the above, the AG took the view that the VAT treat-ment of pharmaceutical supplies to publicly and privately insured persons are comparable situations that are being treated differently, for which there is no apparent objec-tive justification.

On those grounds, the AG proposed that the ECJ should answer the question of the Bundesfinanzhof (Federal Finance Court, Germany) as follows:

“On the basis of the case-law of the Court of Justice of the European Union (judgment of 24 October 1996 in Elida Gibbs, C-317/94, EU:C:1996:400, paragraphs 28 and 31) and having regard to the principle of equal treatment under EU law, a pharmaceutical company which sup-plies medicinal products is entitled to a reduction of the taxable amount under Article 90 of the VAT Directive in the case where– it supplies those medicinal products to pharmacies

via wholesalers,– the pharmacies supply those products, subject to tax,

to persons with private health insurance,– the insurer of the medical expense insurance (the

private health insurance company) reimburses the persons insured by it for the costs of purchasing the medicinal products, and

– the pharmaceutical company is required to pay a ‘dis-count’ to the private health insurance company pur-suant to a statutory provision.”

ECLI:EU:C:2017:534.

4. Recently Announced new Cases

The following VAT cases were pending before the ECJ on 31 August 2017. On that date, one of the Advocates General of the ECJ had not (yet) delivered an Opinion.

Pending cases – No Opinion of AG:

Article(s) of Announcement Keywords

Case Parties involved Sixth Directive Directive 2006/112

IVM

C-524/15 menci 50 of the Charter2

4 of protocol 7 eCHr3 1(2016) Non-payment of VAT – penalty

C-251/16 Cussens and Others 4(3) 12 5(2016) Abuse of rights

C-273/16 Federal express europe

11(B)(3), 14(1) and (2) 86(1), 144 6(2016) Importation of goods connected to transport services

C-298/16 Ispas – – 5(2016) rights of the defence

C-305/16 Avon Cosmetics 11(A)(1)(a), 27 73, 395 5(2016) Unregistered resellers – potentially unfair competition

C-307/16 pieńkowski – 131, 146(1)(b), 147, 273

6(2016) exemption – refund to travellers

C-310/16 Dzivev and Others 325(1) TFeU1 2(1), 1(1)9b) pIF4 47(1) and (2) the Charter2

5(2016) VAT evasion – Fraud


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IVM

C-380/16 Commission / Germany

– 73, 306 to 310 5(2016) Travel agents – Special scheme

258 TFeU1

C-387/16 Nidera – 183 6(2016) VAT overpayment – Interest

C-396-16 T-2 – 184, 185(1) and (2)

6(2016) right to deduct VAT – Non-payment

C-404/16 Lombard – 90(1) and (2) 6(2016) Taxable amount

C-427/16 Chez elektro Balgaria – 73 6(2016) Taxable amount – Layer’s fee

56, 101(1) TFeU1

C-428/16 Frontex International – 73 6(2016) Taxable amount – Layer’s fee

56, 101(1) TFeU1

C-441/16 SmS group 17(2) and (3)(a) 168 to 170 1(2017) Imported goods – Taxable transactions2 to 5 of the eighth Directive5

C-463/16 Stadion Amsterdam 12(3)(a) 96 to 99 1(2017) Single or composite service

C-499/16 AZ – 98(1) and (2) 2(2017) VAT rate – principle of Neutrality

C-500/16 Caterpillar Financial Services

4(3) TeU6 2(2017) refund – Limitation period

C-507/16 Еntertainment Balgaria System

– 168(a), 169(a), 214,

1(2017) right to deduct VAT – registration

C-532/16 SeB bankas – 12, 179, 184 to 186, 250

1(2017) Deduction adjustment – Supply of land

C-533/16 Volkswagen – 167, 178(a) 2(2017) refund – Limitation period

Directive 2008/97

C-534/16 BB construct – 273 2(2017) Outstanding tax liability – Tax deposit16, 21(1), 49(1) and (2) the Charter2

C-544/16 marcandi – 2(1), 14, 24, 62, 63, 65, 73, 79(b)

2(2017) Consideration – Online auctions

C-549/16 palais Kaiserkron – 401 2(2017) Taxable amount – Lease agreement

C-552/16 Wind Inovation 1 – 176 2(2017) Compulsory deregistration – Conditions

C-566/16 Vámos – 213, 281 3(2017) exemption – Start of taxable activities

C-580/16 Firma Hans Bühler – 41(1), 42, 141(c), 197, 263, 265

3(2017) Intra-Community acquisition – recapitulative statement

C-615/16 Kerr – 15(2), 135(1)(f) 4(2017) exemption – marketing services

C-628/16 Kreuzmayr – 32 3(2017) place of supply – Intra-Community supply

C-648/16 Fontana – 168 3(2017) right to deduct VAT

113 and 114 of TFeU1

C-660/16 Kollroß – 167, 185(2), 186

3(2017) Advance payment – refund of VAT

C-661/16 Wirtl – 185, 186 3(2017) Advance payment – Adjustment of input VAT

C-664/16 Vădan – 167, 168, 178, 179, 273

3(2017) right to deduct VAT – evidences

C-665/16 Gmina Wrocław – 14(2)(a) 3(2017) Taxable transactions – Compensation for the transfer of an immovable property







IVM

C-672/16 Imofloresmira – Investimentos Imobiliários

– 137, 167, 168, 184, 185, 187

3(2017) Adjustment of input VAT – exemption for immovable property

C-5/17 DpAS Limited – 135(1)(d) 3(2017) Debt collection – exemption

C-8/17 Biosafe – Indústria de reciclagens

– 63, 167, 168, 178 to 180, 182, 219

3(2017) rectify invoice – incorrect VAT rate – right to deduct VAT

C-16/17 TGe Gas engineering – 44,45, 132(1)(f), 167 to 169, 178, 179, 192a, 193, 194, 196

4(2017) right to deduct VAT

10 and 11 of reg. 282/20118

C-69/17 Gamesa Wind românia

– 213, 214, 273 4(2017) Identification number inoperative – right to deduct VAT

C-81/17 Zabrus Siret – 250, 251 4(2017) error on VAT returns – Tax inspection

C-108/17 enteco Baltic – 138, 143(1)(d), 167

4(2017) Transfer of the right of disposal – exemption

C-140/17 Gmina ryjewo – 167, 168, 184 et seq.

4(2017) right to deduct VAT – Adjustment of capital goods

C-153/17 Volkswagen – 173(2)(c) 4(2017) Overhead costs – right to deduct VAT

C-154/17 e LATS – 311(1)(1) 4(2017) Second-hand goods scheme

C-159/17 Dobre – 167 to 169, 179, 213(1), 214(1)(a), 273

4(2017) registration revoke – Output and input VAT

C-165/17 morgan Stanley & Co International

17(2), (3) and (5), 19(1) 168, 169 and 173 to 175

See below proportional VAT deduction – General costs

C-182/17 Nagyszénás Településszolgáltatási Nonprofit Kft.

– 13(1) See below public body – Consideration

C-249/17 ryanair 4 9 See below Intended economic activity – right to deduct VAT

C-295/17 meO – Serviços de Comunicações e multimédia

– 2(1)(c), 64(1), 66(a) and 73

See below Chargeable event – Taxable amount

C-314/17 Geocycle Bulgaria – 168 See below VAT levied twice –right to deduct VAT

C-320/17 marle participations – 9(1)(f) See below economic Activity – Acquisition and holding of shares

C-364/17 Varna Holideis – 14(1), 90(1), 185(1) and (2)

See below Adjustment of input VAT – Transaction null and void

1. Treaty on the Functioning of the European Union (TFEU), OJ L115 (2008).2. Charter of Fundamental Rights of the European Union (the Charter), OJ C326 (2012).3. European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR).4. Convention on the Protection of the European Communities’ Financial Interests (PIF Convention).5. Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonization of the laws of the Member States relating to turnover taxes – Arrangements for

the refund of value added tax to taxable persons not established in the territory of the country, OJ L331 (1979).6. Treaty on European Union (TEU), OJ L115 (2008).7. Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC, to taxable

persons not established in the Member State of refund but established in another Member State, OJ L44 (2008).8. Council Implementing Regulation (EU) 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of

value added tax, OJ L77 (2011).


Fabiola Annacondia


Preliminary ruling: Case C-165/17 Morgan Stanley & Co International plc v. Ministre de l’Économie et des Finances

On 3 April 2017, the ECJ received from the Conseil d’État (France) a request for a preliminary ruling on the follow-ing questions:“(1) In circumstances where expenditure of a branch

established in one Member State is exclusively used for the transactions of its principal establishment established in another Member State, must the pro-visions of Article 17(2), (3) and (5) and Article 19(1) of the Sixth Directive, incorporated in Articles 168, 169 and 173 to 175 of Directive 2006/112, be inter-preted to the effect that the Member State in which the branch is registered is to apply to that expen-diture the branch’s deductible proportion, deter-mined according to the transactions carried out in the Member State in which it is registered and accord-ing to the rules applicable in that State, or to apply the proportion applicable to the principal establish-ment, or to deduct a specific proportion combining the rules applicable in the Member States in which the branch and the principal establishment are reg-istered, with regard in particular to a possible option mechanism for imposing VAT on transactions?

(2) What rules should be applied in the specific case where expenditure borne by the branch is used both for transactions in the Member State where it is reg-istered and for transactions of the principal establish-ment, particularly as regards the concept of general costs and the proportion of tax deductible?”

Preliminary ruling: Case C-182/17 Ntp. Nagyszénás Településszolgáltatási Nonprofit Kft. v. Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatóság

On 11 April 2017, the ECJ received from the Kúria (Hungary) a request for a preliminary ruling on the fol-lowing questions:“(1) Does the concept of ‘bod[y] governed by public law’

in the first subparagraph of Article 13(1) of Direc-tive 2006/112 include a commercial company which is 100% owned by a municipality?

(2) If the answer to question 1 is in the affirmative, may it be considered that the commercial company acts as a public authority when performing tasks that are the responsibility of the municipality but that the latter delegates to that company?

(3) If the answer to either of the previous questions is in the negative, may it be considered that the amount paid by the municipality to the commercial company for performing the tasks constitutes consideration?”

Preliminary ruling: Case C-249/17 Ryanair Ltd v. The Revenue Commissioners

On 12 May 2017, the ECJ received from the Supreme Court (Ireland) a request for a preliminary ruling on the follow-ing questions:“(1) Can a future intention to provide management ser-

vices to a takeover target, in the event that the take-over is successful, be sufficient to establish that the

potential acquirer is engaged in economic activity for the purposes of Art. 4 of the Sixth Directive so that VAT charged to the potential acquirer on goods or services provided for the purposes of seeking to prog-ress the relevant acquisition can potentially be con-sidered as VAT on an input to the intended economic activity of providing such management services; and

(2) Can there be a sufficient “direct and immediate link”, as identified as a requirement by the CJEU in Cibo,12 between professional services rendered in the context of such a potential takeover and output, being the potential provision of management to the acquisition target in the event that the takeover is successful, so as to permit a deduction to be made in respect of the VAT payable on those professional services?”

Preliminary ruling: Case C-295/17 MEO – Serviços de Comunicações e Multimédia SA v. Autoridade Tributária e Aduaneira

On 22 May 2017, the ECJ received from the Tribunal Arbi-tral Tributário (Centro de Arbitragem Administrativa, CAAD) (Portugal) a request for a preliminary ruling on the following questions:“(1) Must Articles 2(1)(c), 64(1), 66(a) and 73 of Directive

2006/112 be interpreted as meaning that a telecom-munications operator (television, internet, mobile network and fixed network) is liable for VAT as a result of charging its customers – in a case of termi-nation, for reasons attributable to the customer, of a contract containing an obligation to be bound by the contract for a defined term (tie-in period) before the end of that period – a pre-determined amount, corresponding to the basic monthly amount payable by the customer under the contract, multiplied by the number of monthly payments that are still to be made before the end of the tie-in period, the operator having, at the time when that amount is invoiced and independently of its actual payment, already ceased to provide the services, where:

(a) the contractual purpose of the amount invoiced is to deter the customer from disregarding the tie-in period which he has undertaken to observe and to make good the damage sustained by the operator as a result of the failure to complete the tie-in period – in particular, on account of loss of the profit the operator would have obtained if the contract had continued until the end of the period, as well as on account of the agreement to charge lower tariffs, the supply of equipment or other offers, free of charge or at discounted prices, and the costs of advertising and of acquir-ing customers;

(b) contracts negotiated with a tie-in period entail higher remuneration for the commercial inter-mediaries who obtained them than contracts obtained by them without a tie-in period and that remuneration is calculated, in each case (that is,

12. FR: ECJ, 27 Sept. 2001, Case C-16/00, Cibo Participations S.A. v. Direc-teur Régional des Impôts du Nord-Pas-de-Calais, ECJ Case Law IBFD.




as regards contracts with or without a tie-in), on the basis of the amount set for monthly payments in the contracts obtained;

(c) the amount invoiced may be classified, under national law, as a penalty clause?

(2) Is the answer to the first question liable to change in the event that one or more of the situations described in points (a), (b) and (c) of that question does not apply?”

Preliminary ruling: Case C-314/17 Geocycle Bulgaria EOOD v. Direktor na direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ – Veliko Tarnovo, pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

On 29 May 2017, the ECJ received from the Varhoven administrativen sad (Bulgaria) a request for a preliminary ruling on the following question:

“Is there a breach of the principles of fiscal neutrality and effectiveness of the common system of VAT under the pro-visions of Directive 2006/112 if, in a case such as that in the main proceedings, VAT is levied twice on the same supply, once under the general rules, by the supplier showing the tax in the sales invoice, and a second time, by the customer being charged by means of a tax adjustment notice accord-ing to the reverse charge mechanism, and if in practice the right to deduct input VAT is refused and national law makes no provision for the VAT shown in the supplier’s invoice to be rectified following the conclusion of the tax audit procedure?”

Preliminary ruling: Case C-320/17 Marle Participations SARL v. Ministère de l’Économie et des Finances

On 29 May 2017, the ECJ received from the Conseil d’État (Council of State, France) a request for a preliminary ruling on the following question:

“The Court of Justice is asked to rule on the question as to whether – and, if so, under what conditions – the letting of buildings by a holding company to a subsidiary con-stitutes a direct or indirect involvement in the manage-ment of that subsidiary the effect of which being that the acquisition and holding of shares in that subsidiary are considered economic activities within the meaning of the Directive 2006/112.”

Preliminary ruling: Case C-364/17 ‘Varna Holideis’ EOOD v. Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

On 13 June 2017, the ECJ received from the Administra-tiven sad Varna (Bulgaria) a request for a preliminary ruling on the following questions:“(1) Are Articles 90(1) and 185(1) of Directive 2006/112 to

be interpreted as requiring the deduction claimed for input tax on a supply also to be adjusted in a case, such as that in the dispute in the main proceedings, where the legal transaction in respect of which the right to deduct input tax was exercised has been declared null and void by a judgment having legal force or should one, in light of the definition in Article 14(1) of Direc-tive 2006/112, proceed on the basis that there is no supply and the tax claim did not arise in the first place?

(2) Is Article 185(1) and (2) of Directive 2006/112 to be interpreted as meaning that, in the absence of a national provision for the adjustment of deduction claimed in respect of input tax, and in the event of a court decision declaring a legal transaction null and void, the adjustment may be made by direct applica-tion of Article 90(1) of the directive?”

5. Removed Cases

In the period from 1 September 2016 to 31 August 2017, the President of the ECJ removed the following cases from the registry.

Removed cases Article(s) of Announcement Removed Keywords


Sixth Directive

Directive 2006/112 IVM IVM

C-202/15 H3g – 90(2), 185(2) 5(2015) 4(2017) Unpaid consideration – recovery of the tax

C-238/16 X – 132(1)(d), 146(1), 169(b) 6(2016) 2(2017) exemption – Blood plasma


Fabiola Annacondia


fabiola annacondia the european court of justice – recently … · 2018. 5. 4. · fabiola...

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