# C_2006143EN.01000801.xml

| 17.6.2006 | EN | Official Journal of the European Union | C 143/8 |
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17.6.2006

EN

Official Journal of the European Union

C 143/8

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Judgment of the Court (First Chamber) of 30 March 2006 (reference for a preliminary ruling from the Korkein hallinto-oikeus) — Uudenkaupungin kaupunki

(Case C-184/04) (1)

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(VAT - Deduction of input tax - Capital goods - Immovable property - Adjustment of deductions)

(2006/C 143/15)

Language of the case: Finnish

Referring court

Korkein hallinto-oikeus (Finland)

Parties to the main proceedings

Applicant: Uudenkaupungin kaupunki

Applicant:

Re:

Preliminary ruling — Korkein hallinto-oikeus — Interpretation of the second subparagraph of Article 13(C), Article 17(6) and Article 20 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) — Deduction of input tax on immovable capital goods used in connection with transactions for which the taxable person subsequently opts to be taxable — National legislation under which the right to deduct is subject to exercising the right of option for taxation within six months from the bringing into use of the property

Operative part of the judgment

| 1. | Article 20 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, must be interpreted as meaning that, subject to the provisions of Article 20(5) thereof, it requires Member States to make provision for adjustment of deductions of value added tax on capital goods. |
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1.

Article 20 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, must be interpreted as meaning that, subject to the provisions of Article 20(5) thereof, it requires Member States to make provision for adjustment of deductions of value added tax on capital goods.

| 2. | Article 20 of Sixth Directive 77/388 must be interpreted as meaning that the adjustment provided for therein is also applicable where the capital goods were first used in non-taxable activity that was not eligible for deduction and were then used in activity, subject to value added tax during the adjustment period. |
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2.

Article 20 of Sixth Directive 77/388 must be interpreted as meaning that the adjustment provided for therein is also applicable where the capital goods were first used in non-taxable activity that was not eligible for deduction and were then used in activity, subject to value added tax during the adjustment period.

| 3. | The second subparagraph of Article 13(C) of Sixth Directive 77/388 must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of value added tax on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use. |
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3.

The second subparagraph of Article 13(C) of Sixth Directive 77/388 must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of value added tax on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use.

| 4. | Article 17(6) of Sixth Directive 77/388 must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of value added tax on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use. |
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4.

Article 17(6) of Sixth Directive 77/388 must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of value added tax on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use.

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(1)  OJ C 156 of 12.06.2004.

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