Judgment — ECLI:EU:C:2014:147
Date: 2014-03-13
Language of the case: German
Court formation: Sixth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary — Judgment of the Court (Sixth Chamber), 13 March 2014 Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Origin and scope of right of deduction — Acquisition by one of the partners of a portion of the client base of a partnership in order to make it available free of charge to a new partnership — Right to deduction — No such right — Principle of fiscal neutrality — Not applicable (Council Directive 77/388, Arts 2(1), 4(1) and (2), and 17(2)(a)) Article 4(1) and (2) and Article 17(2)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must, having regard to the principle of value added tax neutrality, be interpreted as meaning that a partner in a partnership of tax advisors who acquires from that partnership a portion of its client base for the sole purpose of making that client base available directly and free of charge to a newly founded partnership of tax advisors, in which he is the principal partner, so that that partnership can use that client base in its business, without that client base however becoming part of the capital assets of the newly founded partnership, is not entitled to deduct input value added tax paid on the acquisition of the client base concerned. That provision of the client base for the use of the new partnership is free of charge and therefore does not fall within the scope of Article 2(1) of the Sixth Directive, which refers only to supplies of goods and services provided for consideration, nor within the scope of Article 4(1) and (2) of the Sixth Directive, which refers to the exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis. Moreover, the principle of fiscal neutrality manifests itself through the deduction system which is meant to relieve the trader entirely of the burden of the value added tax payable or paid in the course of all his economic activities. The common system of value added tax consequently ensures that all economic activities, whatever their purpose or results, provided that they are themselves subject to that tax, are taxed in a wholly neutral way. The principle of fiscal neutrality does not apply therefore to a situation of the provision of the client base for the use of a partnership free of charge is not a transaction falling within the scope of value added tax. (see paras 36, 41, 42, 47, operative part)