Opinion of the Advocate General — ECLI:EU:C:2015:212
Date: 2015-03-26
Language of the case: German
Subject matter: Taxation;Approximation of laws;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary — Judgment of the Court (Second Chamber), 16 July 2015 1. Harmonisation of fiscal legislation — Common system of value added tax — Economic activities within the meaning of Article 4 of the Sixth Directive — Involvement of a holding company in the management of its subsidiaries — Included, provided transactions are carried out which are subject to VAT by virtue of Article 2 of the directive (Council Directive 77/388, Art. 2 and 4(2)) 2. Harmonisation of fiscal legislation — Common system of value added tax — Deduction of input tax — Taxable person simultaneously carrying out economic activities and non‑economic activities — Tax due or paid for the acquisition of capital invested by a holding company in its subsidiaries — Proportional deduction — Member States’ discretion — Limits (Council Directive 77/388, Art. 17(2) and (5)) 3. Harmonisation of fiscal legislation — Common system of value added tax — Taxable persons — Concept — Option for Member States to regard persons who are closely linked as a single taxable person — National legislation reserving the possibility to form a group of persons which may be regarded as a sole taxable person only to entities with legal personality and connected with the controlling company of that group in a relationship of subordination — Lawfulness — Limits — Prevention of fraud and tax evasion (Council Directive 77/388, Art. 4(4), second para.) 4. Harmonisation of fiscal legislation — Common system of value added tax — Taxable persons — Concept — Article 4(4) of the Sixth Directive — No direct effect (Council Directive 77/388, Art. 4(4)) 1. See the text of the decision. (See paras 19-21) 2. Article 17(2) and (5) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 2006/69, must be interpreted as meaning that: – the expenditure connected with the acquisition of shareholdings in subsidiaries incurred by a holding company which involves itself in their management and which, on that basis, carries out an economic activity must be regarded as belonging to its general expenditure and the value added tax paid on that expenditure must, in principle, be deducted in full, unless certain output economic transactions are exempt from value added tax under Sixth Directive 77/388, as amended by Directive 2006/69, in which case the right to deduct should have effect only in accordance with the procedures laid down in Article 17(5) of that directive; – the expenditure connected with the acquisition of shareholdings in subsidiaries incurred by a holding company which involves itself in the management only of some of those subsidiaries and which, with regard to the others, does not, by contrast, carry out an economic activity must be regarded as only partially belonging to its general expenditure, so that the value added tax paid on that expenditure may be deducted only in proportion to that which is inherent to the economic activity, according to the criteria for apportioning defined by the Member States, which when exercising that power, must have regard to the aims and broad logic of the Sixth Directive and, on that basis, provide for a method of calculation which objectively reflects the part of the input expenditure actually to be attributed, respectively, to economic and to non-economic activity. (see para. 33, operative part 1) 3. The second subparagraph of Article 4(4) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 2006/69, must be interpreted as precluding national legislation which reserves the right to form a value added tax group, as provided for in those provisions, solely to entities with legal personality and linked to the controlling company of that group in a relationship of subordination, except where those two requirements constitute measures which are appropriate and necessary in order to achieve the objectives seeking to prevent abusive practices or behaviour or to combat tax evasion or tax avoidance, which it is for the referring court to determine. (see para. 46, operative part 2) 4. Article 4(4) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 2006/69, may not be considered to have direct effect allowing taxable persons to claim the benefit thereof against their Member State in the event that that State’s legislation is not compatible with that provision and cannot be interpreted in a way compatible with it. That article is conditional inasmuch as it involves the application of national provisions determining the actual scope thereof. (see paras 50, 52, operative part 3)