Opinion of the Advocate General — ECLI:EU:C:2000:700
Date: 2000-12-14
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 
1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Taxable transactions — Allocation of business goods acquired 
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SUMMARY — JOINED CASES C-322/99 AND C-323/99 
without any entitlement to deduct for the taxpayer's private purposes — Work carried 
out on the goods following their acquisition which gave rise to the deduction of input 
tax — Tax on 'component parts' — Definition 
(Council Directive 77/388, Art. 5) 
2. Tax provisions — Harmonisation of laws •—• Turnover taxes — Common system of 
value added tax — Taxable amount — Allocation of business goods acquired with­
out any entitlement to deduct for the taxpayer's private purposes — Work carried out 
on the goods following their acquisition which gave rise to the deduction of input 
tax •—• Determined by reference to the price, at the time of the allocation, of the goods 
incorporated which constitute 'component parts' of the goods 
(Council Directive 77/388, Arts 5(6) and HA(l)(b)) 
3. Tax provisions •— Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Deduction of input tax — Allocation of business goods acquired 
without any entitlement to deduct for the taxpayer's private purposes — Work carried 
out on the goods following their acquisition which gave rise to the deduction of input 
tax not giving rise to liability to VAT under Article 5(6) of the Sixth Directive — 
Adjustment of the original deduction — Conditions 
(Council Directive 77/388, Arts 5(6) and 20(l)(b)) 
1. Where a taxable person allocates for 
purposes other than those of the busi­
ness goods (in this case a motor 
vehicle) on the acquisition of which 
value added tax was not deductible and 
which, after being acquired, had value-
added-tax-deductible work done on 
them, the value added tax payable 
under Article 5(6) of the Sixth Direc­
tive 77/388 on the harmonisation of 
the laws of the Member States relating 
to turnover taxes applies solely to the 
'component parts' of the goods in 
respect of which there was entitlement 
to deduct, namely the components 
which definitively lost their physical 
and economic distinctiveness when 
they were incorporated in the vehicle, 
after its purchase, following transac­
tions involving supplies of goods which 
led to a lasting increase in the value of 
the vehicle which has not been entirely 
consumed at the time of the allocation. 
(see para. 78 and operative part 1) 
2. In the case of an allocation which is 
taxable under Article 5(6) of the Sixth 
Directive 77/388, in particular the 
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FISCHER AND BRANDENSTEIN 
allocation of goods (in this case a 
motor vehicle) 
— which were acquired without any 
entitlement to deduct, 
— on which work giving entitlement 
to deduct has been carried out, 
resulting in the incorporation of 
'component parts' in the goods, 
the taxable amount for the purposes of 
Article 11(A)(1)(b) of the Sixth Direc­
tive 77/388 must be determined with 
reference to the price, at the time of the 
allocation, of the goods incorporated in 
the vehicle which constitute component 
parts of the goods allocated, within the 
meaning of Article 5(6) of that direc­
tive. 
(see para. 84 and operative part 2 ) 
3. Where work which is carried out on 
goods (in this case a motor vehicle) 
after their purchase and on which input 
value added tax was deducted does not 
give rise to liability for value added tax 
pursuant to Article 5(6) of Sixth Direc­
tive 77/388 when the vehicle is allo­
cated, the value added tax deducted in 
respect of that work must be adjusted 
in accordance with Article 20(l)(b) of 
that directive if the value of the work in 
question has not been entirely con­
sumed in the context of the business 
activity of the taxable person before 
the vehicle is allocated to his private 
assets. 
(see para. 95 and operative part 3) 
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