Opinion of the Advocate General — ECLI:EU:C:2008:644
Date: 2008-11-20
Language of the case: English
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment 1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Sixth Directive – Provisions on rounding of the amount of the tax (Council Directives 67/227, Art. 2, and 77/388, Arts 11A(1)(a), 12(3)(a) and 22(3)(b)) 2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Sixth Directive – Provisions on rounding of the amount of the tax (Council Directives 67/227, Art. 2, and 77/388, Arts 11A(1)(a), 12(3)(a) and 22(3)(b)) 3. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Sixth Directive – Rounding of the amount of the tax (Council Directive 77/388) 1. Community law, as it currently stands, contains no specific requirement concerning the method of rounding amounts of value added tax. In the absence of specific Community legislation, it is for Member States to decide on the rules and methods for rounding amounts of value added tax, although those States must, when so deciding, observe the principles underpinning the common system of that tax, particularly the principles of fiscal neutrality and proportionality. In particular, Community law, first, does not preclude the application of a national rule which requires an amount of value added tax to be rounded up whenever the fraction of the smallest unit of currency concerned is at or above 0.50, and, second, does not require that taxable persons be allowed to round down any amount of value added tax which includes a fraction of the smallest unit of national currency. (see para. 38, operative part 1) 2. In a sale at a price inclusive of value added tax, in the absence of specific Community legislation, each Member State is obliged to determine, within the limits of Community law, in particular in compliance with the principles of fiscal neutrality and proportionality, the level at which the rounding of an amount of value added tax which includes a fraction of the smallest unit of national currency may or must occur. (see para. 51, operative part 2) 3. In view of the fact that traders who calculate the price of their sales of goods and services inclusive of value added tax are in a different situation to those effecting that same type of transactions at prices exclusive of value added tax, the former cannot invoke the principle of fiscal neutrality in order to claim the right also to round down, at line level and basket level, the amounts of value added tax due. Where prices are fixed exclusive of value added tax, the rounding occurs before the customer pays the consideration for the supply, the amount of tax collected by the taxable person from his customer and the amount subsequently paid by the taxable person to the State being identical, irrespective of the method of rounding applied. By contrast, where value added tax is included in the price of goods or services, the systematic rounding down at a lower level than the periodic value added tax return would result in the taxable person collecting from his customer the amount of the value added tax actually due whilst systematically paying to the State a lower amount, retaining the difference for his own benefit, which would be contrary to the principle that value added tax is collected by taxable persons at each stage of the production or distribution process on behalf of the tax authorities, to which those taxable persons are required to pay it. (see paras 60-61, 64, operative part 3)