Opinion of the Advocate General — ECLI:EU:C:1999:18
Date: 1999-01-21
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment 
1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Deduction of input tax — Expenditure which is strictly business 
expenditure — Exclusions provided for under national legislation predating the Sixth 
Directive — Exclusion from the right to deduct the VAT payable on motor vehicles 
constituting tools essential to the taxable person's business — Whether permissible 
(Council Directives 67/228, Art. 11(4), and 77/388, Art. 17(6)) 
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SUMMARY — CASE C-305/97 
2. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Deduction of input tax — Exclusions from the right of 
deduction — Time allowed under Article 17(6) of the Sixth Directive for the adoption 
of Community rules — Where the deadline expires before those rules have been 
implemented — Open to Member States to retain exclusions existing when the Sixth 
Directive entered into force 
1. Article 11(4) of Second Directive 
67/228 on the harmonisation of legis­
lation of Member States concerning 
turnover taxes authorised Member 
States to introduce or retain — and 
Article 17(6) of Sixth Directive 77/388 
authorises them to retain — general 
exclusions from the right to deduct the 
VAT payable on the purchase of motor 
cars used by a taxable person for the 
purposes of his taxable transactions, 
even where those cars were tools 
essential to the person's business or 
where they could not, in specific cases, 
be used for private purposes by that 
person. 
2. On a proper construction of Arti­
cle 17(6) of Sixth Directive 77/388 on 
the harmonisation of legislation of 
Member States concerning turnover 
taxes, which provides that before a 
period of four years at the latest has 
elapsed from the date of entry into 
force of that Directive, the Council is to 
decide what expenditure is not to be 
eligible for deduction of VAT and that 
until rules to that effect come into 
force, Member States may retain all the 
exclusions provided for under their 
national legislation as at the time when 
the Directive enters into force, Member 
States may retain the exclusions from 
the right to deduct VAT, even if the 
Council has not, before expiry of the 
deadline referred to, identified the 
expenditure which is not to be eligible 
for deduction of VAT. 
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