Judgment — ECLI:EU:C:2008:750
Date: 2008-12-18
Language of the case: English
Court formation: Eighth Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Concepts: Proportional deduction
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Goods and services used both for transactions in respect of which VAT is deductible and for transactions in respect of which it is not deductible (Council Directive 77/388, Arts 17(5), third subpara., and 19(1)) Member States are not obliged to apply the rounding up rule in the second subparagraph of Article 19(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes where the proportion of input tax deductible is calculated in accordance with one of the special methods in (a), (b), (c) or (d) of the third subparagraph of Article 17(5) of that directive. Article 19(1) of the Sixth Directive refers only to the proportion deductible under the first subparagraph of Article 17(5) of the directive and therefore lays down a detailed rule for calculating the proportion referred to in that provision only. It follows that, where a particular case is subject to a special scheme allowing for derogations, such as that in (a) to (d) of the third subparagraph of Article 17(5) of the Sixth Directive, the rule for calculating the deductible proportion in Article 19 of the directive is inapplicable in that case. Thus, Member States are not obliged to apply the rounding up rule in that provision where they employ the methods of calculation set out in (a), (b), (c) or (d) of the third subparagraph of Article 17(5) of that directive but may adopt their own rounding up rules, provided that they observe the principles underpinning the common system of value added tax. (see paras 22, 25, 29, operative part)