# C_2006281EN.01001501.xml

| 18.11.2006 | EN | Official Journal of the European Union | C 281/15 |
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18.11.2006

EN

Official Journal of the European Union

C 281/15

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Judgment of the Court (Third Chamber) of 14 September 2006 (reference for a preliminary ruling from the Commissione tributaria di primo grado di Trento — Italy) — Stradasfalti Srl v Agenzia delle Entrate — Ufficio di Trento

(Case C-228/05) (1)

1

(Sixth VAT Directive - Articles 17(7) and 29 - Right to deduct input VAT)

(2006/C 281/23)

Language of the case: Italian

Referring court

Commissione tributaria di primo grado di Trento

Parties to the main proceedings

Applicant: Stradasfalti Srl

Applicant:

Defendant: Agenzia delle Entrate — Ufficio di Trento

Defendant:

Re:

Reference for a preliminary ruling — Commissione tributaria di primo grado di Trento — Interpretation of Articles 17(7) and 29 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1) — Right to deduct VAT on inputs — National provision restricting the right to deduct without consulting the committee provided for under Article 29 of the directive

Operative part of the judgment

The Court rules:

| 1. | The first sentence of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment requires the Member States, in order to respect the procedural obligation of consultation laid down by Article 29 of that directive, to inform the Advisory Committee on value added tax established by that article that they intend to adopt a national measure derogating from the general system of deducting value added tax and to provide that committee with sufficient information to enable it to examine the measure in full knowledge of the facts. |
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1.

The first sentence of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment requires the Member States, in order to respect the procedural obligation of consultation laid down by Article 29 of that directive, to inform the Advisory Committee on value added tax established by that article that they intend to adopt a national measure derogating from the general system of deducting value added tax and to provide that committee with sufficient information to enable it to examine the measure in full knowledge of the facts.

| 2. | The first sentence of Article 7(7) of the Sixth Directive 77/388 must be interpreted as not authorising a Member State to exclude goods from the system of deducting value added tax without first consulting the Advisory Committee on value added tax established by Article 29 of that directive. Nor does that provision authorise a Member State to adopt measures excluding goods from the system of deducting that tax which contain no indication as to their limitation in time and/or which form part of a body of structural adjustment measures whose aim is to reduce the budget deficit and allow State debt to be repaid. |
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2.

The first sentence of Article 7(7) of the Sixth Directive 77/388 must be interpreted as not authorising a Member State to exclude goods from the system of deducting value added tax without first consulting the Advisory Committee on value added tax established by Article 29 of that directive. Nor does that provision authorise a Member State to adopt measures excluding goods from the system of deducting that tax which contain no indication as to their limitation in time and/or which form part of a body of structural adjustment measures whose aim is to reduce the budget deficit and allow State debt to be repaid.

| 3. | In so far as an exception from the system of deductions has not been established in accordance with Article 17(7) of the Sixth Directive, the national tax authorities may not rely as against a taxable person on a provision derogating from the principle of the right to deduct value added tax set out in Article 17(1) of that directive. A taxable person which has been subject to that derogating provision must be able to recalculate its value added tax debt in accordance with Article 17(2) of the Sixth Directive 77/388, in so far as the goods and services have been used for the purposes of taxable transactions. |
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3.

In so far as an exception from the system of deductions has not been established in accordance with Article 17(7) of the Sixth Directive, the national tax authorities may not rely as against a taxable person on a provision derogating from the principle of the right to deduct value added tax set out in Article 17(1) of that directive. A taxable person which has been subject to that derogating provision must be able to recalculate its value added tax debt in accordance with Article 17(2) of the Sixth Directive 77/388, in so far as the goods and services have been used for the purposes of taxable transactions.

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(1)  OJ C 193, 6. 8. 2005.

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