Opinion of the Advocate General — ECLI:EU:C:2010:51
Date: 2010-01-28
Language of the case: Dutch
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgment 1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Exclusion from the right to make deductions – Option for Member States to retain exclusions in existence when the Sixth Directive entered into force (Council Directives 67/228, Art. 11(4), and 77/388, Art. 17(6)) 2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Exclusion from the right to make deductions – Option for Member States to retain exclusions in existence when the Sixth Directive entered into force (Council Directive 77/388, Art. 17(6)) 3. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Exclusion from the right to make deductions – Option for Member States to retain exclusions in existence when the Sixth Directive entered into force (Council Directive 77/388, Art. 17(6)) 1. Article 11(4) of Second Directive 67/228 on the harmonisation of legislation of Member States concerning turnover taxes and Article 17(6) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as not precluding the tax legislation of a Member State applicable on the date when the Sixth Directive entered into force from excluding from deduction value added tax that relates to categories of expenditure concerning, on the one hand, the provision of ‘private transport’, ‘food’, ‘drink’, ‘accommodation’ and ‘opportunities for recreation’ to the members of staff of a taxable person and, on the other hand, the provision of ‘business gifts’ or ‘other gifts’, where those categories of expenditure that have been excluded from the right of deduction have been adequately defined by such legislation. The option given to Member States by the second subparagraph of Article 17(6) of the Sixth Directive presupposes that those Member States adequately define the nature or the purpose of the goods and services in respect of which the right to deduct is excluded in order to ensure that that option is not used to authorise general exclusions from that system. (see paras 44-45, 57, operative part 1) 2. Article 17(6) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as not precluding national legislation, enacted before the Sixth Directive entered into force, under which a taxable person may deduct value added tax paid on the acquisition of certain goods and services used partly for private purposes and partly for professional purposes not in full but only in proportion to their use for professional purposes. Even though, taking into account the scope of the option given Member States by that provision, those Member States are entitled to retain, in full, exclusions from the right to deduct in respect of categories of expenditure that are adequately defined, Member States may also restrict the scope of an exclusion from the right to deduct in respect of such categories of expenditure, since such legislation is consistent with the objective of that directive, which is reflected in particular in Article 17(2) thereof. (see paras 59-61, operative part 2) 3. Article 17(6) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as not precluding an amendment by a Member State, after the entry into force of that directive, to an existing exclusion from the right of deduction, designed in principle to restrict the scope of that exclusion but in respect of which it cannot be ruled out that, in an individual case in a particular tax year, the scope of that exclusion might be extended by reason of the flat-rate nature of the amended scheme. The mere possibility that such an unfavourable effect may arise cannot be a reason to take the view that such a legislative amendment breaches Article 17(6) of that directive, given that that amendment is, in general, more favourable to taxable persons than was the scheme in existence up to that date. In those circumstances, the existence, even if established, of such an isolated or exceptional situation would not affect the principle that the amendment to the national legislation which was adopted after the entry into force of the Sixth Directive has reduced the scope of the previously existing exclusions from the right to deduct. (see paras 70-71, operative part 3)