Judgment — ECLI:EU:C:2007:819
Date: 2007-12-18
Language of the case: French
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Concepts: National derogations;Origin and scope of right of deduction
Procedure: Reference for a preliminary ruling
Origin: France

Summary of the Judgment Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Option for Member States to retain provisions derogating from the principle of immediate deduction (Council Directive 77/388, Arts 17, 18(4), and 28(3)(d)) Articles 17 and 18(4) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes are to be interpreted as not precluding national measures which are designed to accompany the abolition of a national derogating provision authorised by Article 28(3)(d) of the same directive, in so far as the national court verifies that, in its application to the specific case before it, those measures reduce the effects of the national derogating provision. Firstly, Article 28(3)(d) of the Sixth Directive is one of the derogations from the common system of VAT provided for by that directive, in the sense that it permits Member States to continue to retain some provisions of their national law which predate that directive and which derogate from the principle of immediate deduction provided for in the first subparagraph of Article 18(2) of the Sixth Directive. Secondly, Article 28(3)(d) of the Sixth Directive, whilst it precludes the introduction of new exemptions or an extension of the scope of existing exemptions following the entry into force of the Sixth Directive, does not prevent a reduction in their scope, given the transitional nature of the derogation for which it provides. Moreover, a different interpretation of one of the derogations provided for by the Sixth Directive, to the effect that a Member State may maintain an existing exemption but may not abolish it gradually, would be contrary to the objective pursued by that directive, which aims to abolish the derogations therefrom. Likewise, such an interpretation would undermine the uniform application of the Sixth Directive, in that a Member State might find itself compelled to maintain all the exemptions existing at the date of the entry into force of that directive, even if it regarded it as possible, appropriate and desirable progressively to implement the system provided for therein in the field in question. (see paras 33-34, 37, 43, operative part)