Judgment — ECLI:EU:C:2012:614
Date: 2012-10-04
Language of the case: Bulgarian
Court formation: Seventh Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary — Judgment of the Court (Seventh Chamber), 4 October 2012 1. Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Adjustment of the initial deduction — Aim (Council Directive 2006/112, Art. 185(1)) 2. Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Adjustment of the initial deduction — Member States’ power to require adjustment in the event of theft — Concept of theft (Council Directive 2006/112, Art. 185(2)) 1. See the text of the decision. (see paras 21, 25) 2. Article 185(2) of Directive 2006/112 on the common system of value added tax must be interpreted as not precluding national tax provisions which require, where a shortfall in the goods subject to value added tax has been established, that an adjustment be made to the deduction of that input tax at the time of acquisition of those goods, where the taxable person was the victim of a theft of those goods and the perpetrator has not been identified. Member States may provide for adjustments of input VAT deductions in any cases of theft of property giving rise to entitlement to value added tax deduction, irrespective of whether or not the circumstances surrounding the theft have been fully elucidated. Member States, in exercising the power provided for in the second subparagraph of Article 185(2) of the Directive, are free to employ, in their domestic tax legislation, terms which are not identical to the enabling provision of the Directive, provided that those terms reflect the objective pursued by the latter. Since the concept of ‘theft’ generally comes within the scope of criminal law, the Member States may employ the terms they consider most appropriate in establishing the fiscal legislative framework intended to implement a European Union law provision governing value added tax adjustments. Therefore, and in so far as theft entails a ‘shortfall’ in the property concerned, with the result that it is not possible to use it for taxable output transactions, the national tax legislation which refers to a ‘shortfall [being] established’ as a ground for adjusting the input VAT deduction and its application by the competent authority must be regarded as a suitable implementation of the second subparagraph of Article 185(2) of the Directive. (see paras 29, 32, 34, 35, 37, operative part)