Judgment — ECLI:EU:C:2017:389
Date: 2017-05-18
Language of the case: Lithuanian
Court formation: Ninth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Lithuania

Summary — Judgment of the Court (Ninth Chamber), 18 May 2017 Harmonisation of fiscal legislation — Common system of value added tax — Special scheme for taxable dealers — Margin scheme — Sale, by a taxable person, of second-hand vehicles acquired from a taxable dealer — Invoices including references relating both to the margin scheme and to exemption from value added tax — Check by the tax authorities showing that the taxable dealer had not actually applied that scheme — Refusal by the tax authorities to grant the taxable person concerned the right to apply the margin scheme — Not permissible — Exception — Suspicion of an infringement or fraud in the supply — Verification a matter for the national court (Council Directive 2006/112, as amended by Directive 2010/45, Art. 314) Article 314 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, must be interpreted as precluding the competent authorities of a Member State from denying a taxable person the right to apply the margin scheme where he received an invoice that includes references relating both to the margin scheme and to exemption from value added tax (VAT), even if it is apparent from a subsequent check carried out by those authorities that the taxable dealer supplying the second-hand goods had not actually applied that scheme to the supply of those goods, unless it is established by the competent authorities that the taxable person did not act in good faith or did not take every reasonable measure in his power to satisfy himself that the transaction carried out by him does not result in his participation in tax evasion — a matter which it is for the referring court to determine. It should be recalled, in that context, that the Court has repeatedly held that EU law cannot be relied on by individuals for abusive or fraudulent ends (judgment of 18 December 2014, Schoenimport ‘Italmoda’ Mariano Previti and Others, C‑131/13, C‑163/13 and C‑164/13, EU:C:2014:2455, paragraph 43). According to settled case-law, that is the position not only where tax evasion has been carried out by the taxable person himself but also where a taxable person knew, or should have known, that, by the transaction concerned, he was participating in a transaction involving evasion of VAT carried out by the supplier or by another trader acting upstream or downstream in the supply chain (see, regarding the right of deduction, judgment of 6 December 2012, Bonik, C‑285/11, EU:C:2012:774, paragraphs 38 to 40, regarding the right of exemption for an intra-Community supply, judgment of 6 September 2012, Mecsek-Gabona, C‑273/11, EU:C:2012:547, paragraph 54, and, regarding VAT reimbursement, judgment of 18 December 2014, Schoenimport ‘Italmoda’ Mariano Previti and Others, C‑131/13, C‑163/13 and C‑164/13, EU:C:2014:2455, paragraphs 49 and 50). When there are indications giving grounds for suspecting an infringement or fraud, a prudent trader could, depending on the circumstances of the case, be obliged to make enquiries about another trader from whom he intends to purchase goods or services in order to ascertain the latter’s trustworthiness (see, by analogy, judgment of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 60). However, the tax authority cannot, as a general rule, require the taxable person wishing to exercise the right to apply the margin scheme, first, to verify, inter alia, that the issuer of the invoice relating to the goods in respect of which the exercise of that right is sought has satisfied his obligations as regards declaration and payment of VAT, in order to be satisfied that there are no irregularities or fraud at the level of the traders operating at an earlier stage of the transaction or, secondly, to be in possession of documents in that regard (see, by analogy, judgment of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 61). It is, in principle, for the tax authorities to carry out the necessary inspections of traders in order to detect irregularities and VAT fraud as well as to impose penalties on the trader who has committed those irregularities or that fraud (see, by analogy, judgment of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 62). (see paras 31, 33, 39-41, 48, operative part)