# C_2011362EN.01001301.xml

| 10.12.2011 | EN | Official Journal of the European Union | C 362/13 |
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10.12.2011

EN

Official Journal of the European Union

C 362/13

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Reference for a preliminary ruling from the Tribunal Central Administrativo Sul (Portugal) lodged on 26 September 2011 — Portugal Telecom SGPS, SA v Fazenda Pública

(Case C-496/11)

2011/C 362/19

Language of the case: Portuguese

Referring court

Referring court

Tribunal Central Administrativo Sul

Parties to the main proceedings

Parties to the main proceedings

Appellant: Portugal Telecom SGPS, SA

Appellant:

Respondent: Fazenda Pública

Respondent:

Intervening party: Ministério Público

Intervening party:

Questions referred

Questions referred

| (a) | Is Article 17(2) of Sixth Council Directive 77/388/EEC (1) of 17 May 1977 concerning VAT to be interpreted as precluding the Portuguese tax authorities from requiring the appellant, a holding company, to use the pro rata deduction method for all the VAT incurred in its inputs, on the basis of the fact that the main corporate purpose of that company is the management of shareholdings of other companies, even when such inputs (acquired services) have a direct, immediate and unequivocal relationship with taxable transactions — supplies of services — which are carried out downstream in the context of the complementary activity of supplying legally permitted, technical management services? |
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(a)

Is Article 17(2) of Sixth Council Directive 77/388/EEC (1) of 17 May 1977 concerning VAT to be interpreted as precluding the Portuguese tax authorities from requiring the appellant, a holding company, to use the pro rata deduction method for all the VAT incurred in its inputs, on the basis of the fact that the main corporate purpose of that company is the management of shareholdings of other companies, even when such inputs (acquired services) have a direct, immediate and unequivocal relationship with taxable transactions — supplies of services — which are carried out downstream in the context of the complementary activity of supplying legally permitted, technical management services?

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| (b) | May a body that has the status of a holding company and is subject to VAT on the acquisition of goods and services that are thereupon wholly transmitted to companies in which it has a holding, with payment of the VAT, when that institution combines the main activity it carries out (management of shareholdings) with an accessory activity (supply of technical administration and management services), deduct all the tax incurred in respect of those acquisitions by applying the method of deduction based on actual use set out in Article 17(2) of the Sixth Directive? |
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(b)

May a body that has the status of a holding company and is subject to VAT on the acquisition of goods and services that are thereupon wholly transmitted to companies in which it has a holding, with payment of the VAT, when that institution combines the main activity it carries out (management of shareholdings) with an accessory activity (supply of technical administration and management services), deduct all the tax incurred in respect of those acquisitions by applying the method of deduction based on actual use set out in Article 17(2) of the Sixth Directive?

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(1)  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).

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