# C_2005182EN.01002103.xml

| 23.7.2005 | EN | Official Journal of the European Union | C 182/21 |
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23.7.2005

EN

Official Journal of the European Union

C 182/21

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Action brought on 18 March 2005 by the Commission of the European Communities against the Republic of Austria

(Case C-128/05)

(2005/C 182/41)

Language of the case: German

An action against the Republic of Austria was brought before the Court of Justice of the European Communities on 18 March 2005 by the Commission of the European Communities, represented by Dr. Dimitris Triantafyllou, with an address for service in Luxembourg.

The applicant claims that the Court should:

| — | declare that, by allowing taxable persons not established in Austria and who transport passengers there not to submit tax return forms and not to pay the net amount of VAT, when their annual turnover in Austria is below EUR 22 000, in assuming, in this case, that the amount of VAT owed is equal to the amount of deductible VAT and that the application of the simplified regulation is contingent on Austrian VAT not being in invoices or in other documents serving as invoices, the Republic of Austria has failed to fulfil its obligations under Articles 2, 6, 9(2)(b), 17, 18 and 22(3) to (5) of the 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; (1) |
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declare that, by allowing taxable persons not established in Austria and who transport passengers there not to submit tax return forms and not to pay the net amount of VAT, when their annual turnover in Austria is below EUR 22 000, in assuming, in this case, that the amount of VAT owed is equal to the amount of deductible VAT and that the application of the simplified regulation is contingent on Austrian VAT not being in invoices or in other documents serving as invoices, the Republic of Austria has failed to fulfil its obligations under Articles 2, 6, 9(2)(b), 17, 18 and 22(3) to (5) of the 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; (1)

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| — | order the defendant to pay the costs of the proceedings. |
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order the defendant to pay the costs of the proceedings.

Pleas in law and main arguments

For international passenger transport by taxable persons established in another Member State or in a third country, simplified rules have been in force in Austria since 1 April 2002. Such taxable persons are permitted not to submit tax return forms and not to pay the net amount of VAT, when their annual turnover in Austria is below 22 000 euros. The rules assume that, in this case, the amount of VAT owed is equal to the amount of deductible VAT. At the same time taxable persons who take advantage of these simplified rules do not have to state the Austrian VAT in their invoices or in other documents serving as invoices.

These rules are neither in accordance with the provisions of Council Directive 77/388/EEC of 17 May 1977 (‘Sixth VAT Directive’) nor with Council Decision 2001/242/EC of 19 May 2001.

The Commission submits that the abovementioned directive does in fact provide for the possibility of a flat-rate scheme for small enterprises, but the definition of ‘small enterprise’ used under Austrian rules — turnover in Austria of less than EUR 22 000 — does not correspond to the Community law concept of ‘small enterprise’, which must be given a uniform interpretation. It remains furthermore unproven that the Austrian flat-rate scheme does not lead to a tax reduction which exceeds the simplification measure which Article 24(1) of the abovementioned directive aims to permit. The release from the other invoicing and tax return obligations and the duty to keep records further constitutes the formal aspect of the oversimplification.

The Commission claims that the Austrian rules at issue cannot be accepted on the basis of the abovementioned Council decision either. This decision does admittedly authorise the Republic of Austria to tax, from 1 January 2001 to 31 December 2005, the international transportation of passengers carried out by taxable persons not established in Austria by means of motor vehicles not registered in Austria in derogation from Article 11 of the abovementioned directive. This exception is, however, expressly based on the condition that the distance covered in Austria be taxed on the basis of an average taxable amount per person and per kilometre.

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(1)  OJ 1977 L 145, p. 1

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