Opinion of the Advocate General — ECLI:EU:C:1997:162
Date: 1997-03-20
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary of the Judgmen t 
Tax provisions — Harmonization of laws — Turnover taxes — Common system of value added 
tax — Deduction of input tax — Refund of excess — Retention where there is a presumption of 
fraud or other VAT debts — Whether permissible — Condition — Proportionality 
(Council Directive 77/388, Art. 18(4)) 
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SUMMARY — JOINED CASES C-286/94, C-340/95, C-401/95 AND C-47/96 
Article 18(4) of the Sixth Directive (77/388) 
on the harmonization of the laws of the 
Member States relating to turnover taxes, 
which allows the Member States, where the 
total amount of deductions of input VAT 
exceeds the amount of tax due, either to 
carry the excess forward to the following 
period or to refund it, does not in principle 
preclude national measures allowing the 
competent fiscal authorities to retain, as a 
protective measure, refundable amounts of 
VAT where there are grounds for presump­
tion of tax evasion or where those authorities 
claim that there is a VAT debt owing to them 
which is not apparent from the taxable per­
son's returns and which the taxable person 
contests. 
However, the principle of proportionality is 
applicable to such measures adopted by a 
Member State in the exercise of its powers 
relating to VAT, since, if those measures 
went further than necessary in order to 
attain their objective, they would undermine 
the principles of the common system of VAT 
and in particular the rules governing deduc­
tions which constitute an essential compo­
nent of that system. 
It is for the national court to examine 
whether or not the measures in question and 
the manner in which they are applied by the 
competent administration are proportionate. 
In the context of that examination, if the 
national provisions or a particular construc­
tion of them would constitute a bar to effec­
tive judicial review, in particular review of 
the urgency and necessity of retaining the 
refundable VAT balance, and would prevent 
the taxable person from applying to a court 
for replacement of the retention by another 
guarantee sufficient to protect the interests of 
the Treasury but less onerous for the taxable 
person, or would prevent an order from 
being made, at any stage of the procedure, 
for the total or partial lifting of the retention, 
the national court should disapply those pro­
visions or refrain from placing such a con­
struction on them. Moreover, in the event of 
the retention being lifted, calculation of the 
interest payable by the Treasury which did 
not take as its starting point the date on 
which the VAT balance in question would 
have had to be repaid in the normal course 
of events would be contrary to the principle 
of proportionality. 
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