Judgment — ECLI:EU:C:2014:50
Date: 2014-02-06
Language of the case: Romanian
Court formation: Second Chamber
Subject matter: Taxation;Principles, objectives and tasks of the Treaties;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Romania

Summary — Judgment of the Court (Second Chamber), 6 February 2014 1. Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Clearly irrelevant questions and hypothetical questions put in a context not permitting a useful answer — Questions bearing no relation to the subject matter of the case in the main proceedings (Art. 267 TFEU) 2. Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Reverse charge procedure — Taxable person liable for value added tax as the recipient of goods or services — Right to deduct — Conditions — National legislation depriving the recipient of the services of the right to deduct where he paid value added tax when it was not due to the service supplier as a result of an incorrectly drawn up invoice — Lawfulness — Impossibility to correct the error due to the insolvency of the supplier — No effect (Council Directive 2006/112) 3. Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Administrative practice of the national tax authorities whereby, within a limitation period, they revoke a right granted to the taxable person to deduct the tax and then, following a fresh investigation, order him to pay that tax together with default interest — Principle of legal certainty — Lawfulness — Limits — Observance of EU law and its general principles, including the principle of proportionality 1. See the text of the decision. (see para. 25) 2. Directive 2006/112 on the common system of value added tax and the principle of fiscal neutrality do not preclude, in a transaction subject to the reverse charge regime, the recipient of the services from being deprived of the right to deduct the value added tax which he paid when that tax was not due to the service supplier on the basis of an incorrectly drawn up invoice, even where the correction of that error is impossible because that supplier is insolvent. Under the reverse charge regime, no value added tax payment takes place between the supplier and the recipient of the services, the recipient being liable, in respect of the transactions carried out, for the input value added tax, while being able, in principle, to deduct that tax so that no amount is payable to the tax authorities. In this regard, while the principle of fiscal neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements, the recipient of the services should have paid the value added tax to the tax authorities in accordance with Article 199 of Directive 2006/112. Thus, besides the fact that the invoice at issue does not meet the formal requirements provided for by the national legislation, a substantive condition of the reverse charge regime has not been satisfied. That situation prevented the tax authorities from investigating the application of the reverse charge regime and led to a risk of a loss of tax revenue for the Member State concerned. Thus, since the value added tax paid by the recipient to the supplier is not due and that payment is made in breach of a substantive requirement of that regime, the recipient of the services cannot claim the right to deduct that value added tax. Further, the fact that the service supplier is insolvent cannot call into question the refusal to allow deduction of value added tax as a result of the service recipient’s failure to fulfil essential obligations for the application of the reverse charge regime. However, the service recipient which paid value added tax that was not due to the service supplier can request repayment of the value added tax from it in accordance with the national law. (see paras 29, 35, 37, 38, 40-42, 44, operative part 1) 3. The principle of legal certainty does not preclude an administrative practice of the national tax authorities whereby, within a limitation period, they revoke a decision by which they granted the taxable person the right to deduct value added tax and then, following a fresh investigation, order him to pay that tax together with default interest. Admittedly, the principle of legal certainty requires the tax position of the taxable person, having regard to his rights and obligations vis-à-vis the tax authorities, not to be open to challenge indefinitely. However, national rules which allow, in exceptional circumstances, before the expiry of the limitation period, a new investigation to be carried out concerning a particular period where additional information unknown to the tax investigators at the date of the investigation or errors in calculation having an effect on the results of that investigation come to light comply with the principle of legal certainty. Concerning the default interest, in the absence of harmonisation of EU legislation in the field of the penalties applicable in cases where conditions laid down by arrangements under such legislation are not complied with, Member States retain the power to choose the penalties which seem to them to be appropriate. They must, however, exercise that power in accordance with EU law and its general principles, and, consequently, in accordance with the principle of proportionality (see paras 46-48, 50, 51, operative part 2)