# C_2019230EN.01001001.xml

| 8.7.2019 | EN | Official Journal of the European Union | C 230/10 |
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8.7.2019

EN

Official Journal of the European Union

C 230/10

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Judgment of the Court (First Chamber) of 8 May 2019 (request for a preliminary ruling from the Commissione tributaria regionale di Lombardia — Italy) — EN.SA. Srl v Agenzia delle Entrate — Direzione Regionale Lombardia Ufficio Contenzioso

(Case C-712/17) (1)

(Reference for a preliminary ruling - Value added tax (VAT) - Fictitious transactions - Impossibility of deducting the tax - Obligation on the issuer of an invoice to pay the VAT indicated thereon - Fine in an amount equal to the amount of the improperly deducted VAT - Whether compatible with the principles of VAT neutrality and proportionality)

(2019/C 230/11)

Language of the case: Italian

Referring court

Commissione tributaria regionale di Lombardia

Parties to the main proceedings

Appellant: EN.SA. Srl

Respondent: Agenzia delle Entrate — Direzione Regionale Lombardia Ufficio Contenzioso

Operative part of the judgment

| 1. | In a situation, such as that at issue in the main proceedings, in which fictitious circular sales of electricity made between the same traders and for the same amounts did not cause tax losses, Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in the light of the principles of neutrality and proportionality, must be interpreted as not precluding national legislation which excludes the right to deduct value added tax (VAT) relating to fictitious transactions while requiring the persons who enter VAT on an invoice to pay that tax, including for a fictitious transaction, provided that national law allows the tax liability arising from that obligation to be adjusted when the issuer of that invoice, who was not acting in good faith, has, in sufficient time, wholly eliminated the risk of any loss of tax revenue, this being a matter for the referring court to ascertain. |
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1.

In a situation, such as that at issue in the main proceedings, in which fictitious circular sales of electricity made between the same traders and for the same amounts did not cause tax losses, Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in the light of the principles of neutrality and proportionality, must be interpreted as not precluding national legislation which excludes the right to deduct value added tax (VAT) relating to fictitious transactions while requiring the persons who enter VAT on an invoice to pay that tax, including for a fictitious transaction, provided that national law allows the tax liability arising from that obligation to be adjusted when the issuer of that invoice, who was not acting in good faith, has, in sufficient time, wholly eliminated the risk of any loss of tax revenue, this being a matter for the referring court to ascertain.

| 2. | The principles of proportionality and neutrality of value added tax (VAT) must be interpreted as precluding, in a situation such as that at issue in the main proceedings, a rule of national law under which the unlawful deduction of VAT is penalised by a fine equal to the amount of the deduction made. |
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2.

The principles of proportionality and neutrality of value added tax (VAT) must be interpreted as precluding, in a situation such as that at issue in the main proceedings, a rule of national law under which the unlawful deduction of VAT is penalised by a fine equal to the amount of the deduction made.

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(1)  OJ C 112, 26.3.2018.

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