Opinion of the Advocate General — ECLI:EU:C:2016:750
Date: 2016-10-06
Language of the case: French
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Luxembourg

Summary — Judgment of the Court (Fourth Chamber), 4 May 2017 1. Actions for failure to fulfil obligations — Right of the Commission to bring judicial proceedings — No limitation period — Discretion to choose when to initiate proceedings — Exception — Excessive duration of the pre-litigation procedure prejudicial to the rights of the defence — Burden of proof — National legislation amended after the expiry of the period prescribed in the reasoned opinion — Irrelevant (Art. 258 TFEU) 2. Harmonisation of fiscal legislation — Common system of value added tax — Exemptions — Restrictive interpretation — Limits (Council Directive 2006/112, Art. 132) 3. Harmonisation of fiscal legislation — Common system of value added tax — Exemptions — Exemptions for certain activities in the public interest — Supplies of services by independent groups of persons who are carrying on an activity which is exempt for the purpose of rendering services to their members — National legislation not restricting the exemption from VAT to solely the services directly necessary for the activities which are not liable to VAT or which are exempt undertaken by the members of the independent groups of persons — Unlawful (Council Directive 2006/112, Arts 2(1)(c) and 132(1)(f)) 4. Harmonisation of fiscal legislation — Common system of value added tax — Exemptions — Exemptions for certain activities in the public interest — Supplies of services by independent groups of persons who are carrying on an activity which is exempt for the purpose of rendering services to their members — National legislation permitting the members of an independent group of persons to deduct the tax invoiced to that group —Unlawful (Council Directive 2006/112, Arts 168(a) and 178(a)) 5. Member States — Obligations — Failure to fulfil obligations — Assessment by reference to an administrative practice rather than national legislation — Lawful — Conditions (Art. 258 TFEU) 6. Harmonisation of fiscal legislation — Common system of value added tax — Exemptions — Exemptions for certain activities in the public interest — Supplies of services by independent groups of persons who are carrying on an activity which is exempt for the purpose of rendering services to their members — National legislation excluding from the scope of VAT a transaction consisting in the allocation to the independent group of persons, by one of its members, of expenses incurred by that member in his name but on behalf of the group — Unlawful (Council Directive 2006/112, Arts 14(2)(c) and 28) 1. See the text of the decision. (see paras 39-42) 2. See the text of the decision. (see para. 50) 3. A Member State fails to fulfil its obligations under Articles 2(1)(c) and 132(1)(f) of Directive 2006/112 on the common system of value added tax, as amended by Directive 2010/45, where it provides for a value added tax (VAT) regime applicable to independent groups of persons (IGP) under which the services supplied by an IGP to its members are exempt from VAT provided that the members of that group who also carry out taxable activities generate a turnover excluding tax from those activities of no more than 30%, and even 45% in certain cases, of their total turnover excluding tax. Article 132(1)(f) of Directive 2006/112 does not provide for an exemption for the supply of services which are not directly necessary for the exercise of an IGP’s members’ exempt activities or those in relation to which they are not taxable persons. Since such a supply of services does not fall within the scope of the exemption set out in Article 132(1)(f) of Directive 2006/112, Article 2(1)(c) of that directive requires that that supply of services for consideration within the territory of a Member State by a taxable person acting as such be subject to VAT. That interpretation of Article 132(1)(f) of Directive 2006/112 does not result in the exemption provided for in that provision being deprived of its intended effect. In particular, the application of that exemption is not restricted to groups whose members exercise exclusively an activity which is exempt from VAT or in relation to which they are not taxable persons. Accordingly, the services rendered by an IGP whose members also carry out taxable activities may qualify for that exemption, but only in so far as those services are directly necessary for those members’ exempt activities or activities in relation to which they are not taxable persons. (see paras 43, 51-53, 55, 92, operative part 1) 4. A Member State fails to fulfil its obligations under Articles 168(a) and 178(a) of Directive 2006/112 on the common system of value added tax, as amended by Directive 2010/45, where it provides for a value added tax (VAT) regime applicable to independent groups of persons (IGP) which permits the members of an IGP who carry out transactions subject to VAT to deduct, from the VAT which they are liable to pay in respect of those taxed transactions, the tax invoiced to the IGP or payable by the latter in respect of the goods and services which the IGP received for the purposes of its own activities. In the first place, under Article 168(a) of Directive 2006/112, a taxable person is entitled to deduct from the VAT which he is liable to pay the VAT due or paid in respect of supplies to him of goods or services carried out by another taxable person. However, it follows from the exemption provided for in Article 132(1)(f) of Directive 2006/112 that the IGP is a taxable person in its own right, separate from its members. Therefore, it is contrary to Article 168(a) of Directive 2006/112 to permit the members of an IGP to deduct from the VAT which they are liable to pay the VAT due or paid in respect of goods and services supplied to the IGP. In the second place, it is clear from Article 178(a) of Directive 2006/112, read in conjunction with Article 226(5) and Article 168(a) thereof, that, in order to exercise the right of deduction, the taxable person must hold an invoice on which his name appears as customer. Consequently, by permitting the members of an IGP to deduct from the VAT which they themselves are liable to pay, on the basis of an invoice drawn up in the name of that group, the VAT invoiced to the latter, the national legislation at issue is also contrary to Article 178(a) of Directive 2006/112. (see paras 61, 63, 67, 70, 92, operative part 1) 5. See the text of the decision. (see para. 73) 6. A Member State fails to fulfil its obligations under Articles 14(2)(c) and 28 of Directive 2006/112 on the common system of value added tax, as amended by Directive 2010/45, where it provides for a value added tax (VAT) regime applicable to independent groups of persons (IGP) under which the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which is excluded from the scope of VAT. The IGP is a taxable person in its own right, separate from its members, who are also taxable persons. Consequently, the transactions between the IGP, which acts independently, and one of its members are to be regarded as transactions between two taxable persons which fall within the scope of VAT. It follows that the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which falls within the scope of VAT. That finding is confirmed by Article 14(2)(c) and Article 28 of Directive 2006/112. (see paras 82-84, 91, 92, operative part 1)