Opinion of the Advocate General — ECLI:EU:C:2004:828
Date: 2004-12-16
Language of the case: Portuguese
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Portugal

Summary of the Judgment 1. Questions referred for a preliminary ruling – Jurisdiction of the Court – Limits – Identification of the subject-matter of the question (Art. 234 EC) 2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Taxable person carrying out both transactions giving right to deduct and transactions not giving right to deduct – Deductible proportion – Calculation – Value of transactions not yet performed – Excluded (Council Directive 77/388, Art. 19) 1. Although the Court has no jurisdiction under Article 234 EC to apply a rule of Community law to a particular case and thus to judge a provision of national law by reference to such a rule it may, in the framework of the judicial cooperation provided for by that article, and on the basis of the material presented to it, provide a national court with an interpretation of Community law which may be useful to it in assessing the effects of that provision. However, if questions have been improperly formulated or go beyond the scope of the powers conferred on it by Article 234 EC, the Court is free to extract from all the factors provided by the national court, and in particular from the statement of the grounds contained in the reference, the elements of Community law requiring an interpretation having regard to the subject-matter of the dispute. (see paras 15-16) 2. It is contrary to Article 19 of Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, concerning the calculation of the deductible proportion where a taxable person carries out both transactions giving the right to deduct and transactions not giving the right to deduct, to include, in the denominator of the fraction making that calculation possible, the value of work in progress carried out by a taxable person in the course of civil construction activity subject to tax, where that value does not correspond to the supply of goods or the provision of services which has already been effected by the taxable person or which has given rise to statements of account of work and/or the receipt of payments on account. It is contrary to the system under the Sixth Directive to allow the determination of the extent of deduction to take into account transactions not yet performed and which may never in fact take place, whilst in that system the chargeable event for the tax, and as a result the right to deduct, depend on a transaction’s having actually been carried out. (see paras 26-27, operative part)