Opinion of the Advocate General — ECLI:EU:C:1997:537
Date: 1997-11-13
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - unfounded
Origin: France

Summary of the Judgment
Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added
tax — Deduction of input tax — Expenditure which is strictly business expenditure — Exclusions
provided for by national rules predating the Sixth Directive — Exclusion of the right to deduct
value added tax on means of transport constituting the very tool of the taxable person's trade —
Whether permissible
(Council Directive 77/388, Art. 17(2)(a) and (6))
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SUMMARY — CASE C-43/96
A national system of value added tax in
existence at the time of the entry into force
of the Sixth Directive 77/388 on the har­
monisation of the laws of the Member States
relating to turnover taxes, which excludes the
right to deduct tax on means of transport
which constitute the very tool of the taxable
person's trade, is not in breach of Article
17(2) of the directive since the second sub­
paragraph of Article 17(6) thereof authorises
the Member State to maintain, until the entry
into force of rules to be adopted by the
Council, all the exclusions of the right to
deduct provided for under their national
laws at the time of the directive's entry into
force.
It is apparent from the wording of Article
17(6) of the Sixth Directive that, while it is
for the Council to decide what expenditure
is not eligible for a deduction of value added
tax, the rules which the Council is called
upon to adopt are not automatically limited
to expenditure that is not strictly business
expenditure. In those circumstances, the
expression 'all the exclusions', used in the
second subparagraph of Article 17(6) of the
directive, comprises expenditure which is
strictly business expenditure.
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