Opinion of the Advocate General — ECLI:EU:C:2001:457
Date: 2001-09-20
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - successful
Origin: Germany

Summary of the Judgment 
Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Taxable amount — Sales promotion scheme involving, after 
purchase by the final consumer, reimbursement from the manufacturer on presentation 
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SUMMARY — CASE C-427/98 
of a voucher issued by the manufacturer — Intervention of one or more wholesalers in the 
distribution chain between the manufacturer and retailer — Taxable basis at the 
manufacturer's level constituted by the sale price charged by the manufacturer less the 
amount reimbursed 
(Council Directive 77/388, Art. 11) 
Where there is a system used by manu­
facturers to promote sales of their products 
whereby, on the one hand, retailers grant to 
final consumers a price reduction in 
exchange for vouchers issued by the manu­
facturer from whom they subsequently 
obtain reimbursement of their face value 
and, on the other hand, one or more 
wholesalers intervene in the distribution 
chain between the manufacturer and the 
retailers and vouchers are reimbursed 
directly by the manufacturer to the retailers 
without any intervention by the whole­
salers, a Member State that does not adopt 
the measures necessary to allow adjustment 
of the taxable amount of the taxable person 
who has effected reimbursement where 
money off coupons are reimbursed fails to 
fulfil its obligations under Article 11 of 
Sixth Directive 77/388 on the harmon­
isation of the laws of the Member States 
relating to turnover taxes, in the version 
contained in Directive 95/7. 
Since value added tax is intended to tax 
only the final consumer and is completely 
neutral as regards the taxable persons 
involved in the production and distribution 
process prior to the stage of final taxation, 
regardless of the number of transactions 
involved, the taxable amount serving as a 
basis for the tax to be collected by the tax 
authorities cannot exceed the consideration 
actually paid by the final consumer. Con­
sequently, where a manufacturer issues 
money-off coupons giving rise, after pur­
chase by the final consumer, to a reim­
bursement by that manufacturer to a 
retailer not directly connected to him in 
the distribution chain, the manufacturer's 
taxable amount is equal to the selling price 
charged by the manufacturer, less the 
amount indicated on the voucher and 
refunded. 
Deduction from the taxable amount of 
reductions granted directly to the consumer 
by the initial supplier after delivery to a 
wholesaler or retailer do not disturb the 
value added tax system since there is no 
need to readjust the taxable amount for the 
intermediate transactions. For those trans­
actions, observance of the principle of 
neutrality is ensured by application of the 
conditions for deduction set out in the Sixth 
Directive, which allows the intermediate 
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COMMISSION v GERMANY 
links in the distribution chain to deduct 
from their own taxable amount the sums 
paid by each to his own supplier and thus 
to pass on to the tax authorities the part of 
the tax representing the difference between 
the price paid by each to his supplier and 
the price at which he supplied the goods to 
his purchaser. In those circumstances, 
reduction of the manufacturer's taxable 
amount cannot be made to depend on the 
subsequent alteration of the transactions 
effected by the intermediate links in the 
distribution chain, which are in no way 
concerned by the price reduction or the 
reimbursement of the value of the voucher 
or the invoices relating thereto. 
(see paras 22-23, 28-29, 32-33, 
42-43, 79, operative part 1) 
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