Provisional text
JUDGMENT OF THE COURT (Seventh Chamber)
12 March 2026 (*)
( Reference for a preliminary ruling – Taxation – Common system of value added tax (VAT) – Deduction of input VAT – Directive 2006/112/EC – Second paragraph of Article 176 – Exclusion from the right to deduct VAT – Acquisition of tickets for leisure events and services – Entry into force of the right to deduct VAT on the date of accession of the Kingdom of Spain to the European Economic Community – Standstill clause )
In Case C‑515/24,
REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Supremo (Supreme Court, Spain), made by decision of 22 July 2024, received at the Court on 24 July 2024, in the proceedings
Randstad España SLU
v
Administracíon General del Estado,
THE COURT (Seventh Chamber),
composed of F. Schalin (Rapporteur), President of the Chamber, M. Gavalec and Z. Csehi, Judges,
Advocate General: J. Kokott,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
–        Randstad España SLU, by C. Durán Haeussler, J.M. Martínez Gimeno and A. Villegas Viñeta, abogados,
–        the Spanish Government, by P. Pérez Zapico, acting as Agent,
–        the European Commission, by C. Calvo Langdon, M. Herold and B. Martenczuk, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 23 October 2025,
gives the following
Judgment
1        This request for a preliminary ruling concerns the interpretation of Article 168(a) and Article 176 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).
2        The request has been made in proceedings between Randstad España SLU and the Administración General del Estado (General State Administration, Spain) (‘the tax authority’) concerning a value added tax (VAT) assessment by which that authority denied Randstad the right to deduct input VAT in respect of purchases of tickets to leisure events and services.
Legal context
European Union law
Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties
3        Article 395 of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23) provides:
‘The new Member States shall put into effect the measures necessary for them to comply, from the date of accession, with the provisions of Directives and Decisions within the meaning of Article 189 of the EEC Treaty and of Article 161 of the Euratom Treaty, and with recommendations and decisions within the meaning of Article 14 of the ECSC Treaty, unless a time limit is provided for in the list of Annex XXXVI or in any other provisions of this Act.’
Sixth Directive 77/388/EEC
4        Article 17(6) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’) provided:
‘Before a period of four years at the latest has elapsed from the date of entry into force of this directive, the Council [of the European Communities], acting unanimously on a proposal from the Commission [of the European Communities], shall decide what expenditure shall not be eligible for a deduction of [VAT]. [VAT] shall in no circumstances be deductible on expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.
Until the above rules come into force, Member States may retain all the exclusions provided for under their national laws when this Directive comes into force.’
5        The Sixth Directive was repealed and replaced by the VAT Directive, which entered into force on 1 January 2007.
The VAT Directive
6        Article 168(a) of the VAT Directive provides:
‘In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay:
(a)      the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person’.
7        Article 176 of the VAT Directive is worded as follows:
‘The Council [of the European Union], acting unanimously on a proposal from the [European] Commission, shall determine the expenditure in respect of which VAT shall not be deductible. VAT shall in no circumstances be deductible in respect of expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.
Pending the entry into force of the provisions referred to in the first paragraph, Member States may retain all the exclusions provided for under their national laws at 1 January 1979 or, in the case of the Member States which acceded to the [European] Community after that date, on the date of their accession.’
8        As of the date of the present judgment, the Council has not established a list of categories of expenditure in respect of which VAT is not deductible.
Spanish law
Law 30/1985
9        Points 3 and 5 of Article 33(1) of Ley 30/1985 del Impuesto sobre el Valor Añadido (Law 30/1985 on value added tax) of 2 August 1985 (BOE No 190 of 9 August 1985, p. 25214) provided:
‘(1)      The following amounts shall not be deductible:
…
3.°      Input tax paid on purchases or imports of food or beverages or on hospitality services, restaurant services or services related to shows, except when they are intended to be used or consumed by salaried employees or third parties for remuneration.
…
5.°      Input tax paid as a result of acquiring goods or services intended to show appreciation for clients, customers, salaried employees or third parties.’
10      Law 30/1985 entered into force on 1 January 1986 and was repealed by Ley 37/1992 del Impuesto sobre el Valor Añadido (Law 37/1992 on value added tax) of 28 December 1992 (BOE No 312 of 29 December 1992, p. 44247).
Law 37/1992
11      Article 96(1) of Law 37/1992, in the version relevant to the present case, provides:
‘(1)      No proportion of the input VAT on the acquisition – including for personal use, import, letting out, transformation, repair, maintenance or use – of the goods and services set out below, or goods and services that are incidental or supplementary to them, shall be deductible:
…
4.º      Shows and recreational services.
5.º      Goods and services used to show appreciation for clients, customers, salaried employees or third parties.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
12      From 2009 to 2011, Randstad España purchased tickets to football matches of Real Madrid C.F. and F.C. Barcelona, invitations to the Paddock Club of the Formula 1 Grand Prix in Spain, and invitations to excursions on board the ship Clipper Stad Amsterdam. It deducted the VAT on the purchase of those tickets, which were intended to be supplied to its clients free of charge.
13      Following verification and investigation actions carried out by the Dependencia de Control Tributario y Aduanero (Office for Tax and Customs Control) of the Delegación Central de Grandes Contribuyentes (Central Office for Large Taxpayers) of the Agencia Tributaria (Tax Agency, Spain), the tax authority issued assessment decisions by which it denied Randstad España the right to deduct VAT on purchases of tickets to leisure events and services, in respect of the period from 2009 to 2011, and ordered the adjustment of the corresponding amount of VAT under Article 96(1) of Law 37/1992.
14      Randstad España brought a challenge against those assessment decisions, which was rejected by the Tribunal Económico-Administrativo Central (Central Tax Tribunal, Spain) on 22 November 2017. Randstad brought proceedings contesting that decision before the administrative division of the Audiencia Nacional (National High Court, Spain).
15      That court, by judgment of 17 January 2022, upheld that rejection decision in so far as it concerned the adjustment with respect to the purchase of tickets to sports events and leisure services. The Audiencia Nacional (National High Court) relied on the application of the standstill clause, which results in the implementation at national level, first, of the second subparagraph of Article 17(6) of the Sixth Directive and, second, of the second paragraph of Article 176 of the VAT Directive.
16      Randstad España brought an appeal before the Tribunal Supremo (Supreme Court, Spain), which is the referring court.
17      Randstad España submits that, under the principle of neutrality of VAT, taxable persons must be authorised to deduct VAT paid on purchases linked to their professional activity; that would include purchases of tickets to attend sports or leisure events to be supplied to its clients free of charge. A standstill clause allows Member States to retain national legislation in force at the time of their accession to the European Union and sets restrictions on the deduction of VAT. However, it argues that the circumstances of this case are different, due to the fact that the Spanish legislation excluding the right to a deduction of input VAT paid on such purchases was not in force before the Kingdom of Spain’s accession to the European Economic Community.
18      The Spanish Government argues that, although that legislation entered into force on the day of the Kingdom of Spain’s accession to the Community, it was adopted on 2 August 1985, thus before that accession, and it may be retained on the basis of the standstill clause.
19      The referring court observes, for its part, that the Court of Justice has already interpreted the derogation from the right of deduction provided for in Article 176 of the VAT Directive, in particular as regards restrictions on that right, inter alia in the judgments of 30 September 2010, Oasis East (C‑395/09, EU:C:2010:570), and of 18 July 2013, AES-3C Maritza East 1 (C‑124/12, EU:C:2013:488). It appears from those judgments that, in principle, restrictions on the right of deduction not only had to be provided for, but they also had to be in force and actually applicable prior to EU accession. However, that court observes that Spanish VAT legislation comes within a particular context, since VAT did not exist in that Member State before its accession to the Community. None of the taxes which existed at the time, in particular the general tax on the turnover of companies and the tax on luxuries, were comparable to the VAT system. In particular, none of those taxes provided for the deduction of any input tax.
20      In
those circumstances,
the Tribunal Supremo (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      Is a rule such as that contained in Article 96[(1)](4) and (5) of [Law 37/1992] consistent with Article 168(a) and Article 176, first paragraph, of [the VAT Directive], where, in accordance with that rule, no proportion of the input VAT amounts resulting from the acquisition of goods and services such as [tickets for] sporting events, or those used to show appreciation for clients, salaried employees or third parties, is deductible, even if the taxpayer proves that such expenditure is directly related to his or her business or professional activity, that it had a strictly business or professional purpose and that the goods and services were used by the taxable person to carry out taxable transactions, and even though the amount of such expenditure is tax deductible for the purposes of income taxes (personal income tax and corporation tax)?
(2)      Is a rule such as that contained in Article 96[(1)](4) and (5) of [Law 37/1992], which introduces a condition limiting the exercise of the right of deduction, consistent with Article 176, second paragraph, of [the VAT Directive], where that rule entered into force the same day that the Kingdom of Spain joined the [Community], on 1 January 1986, and where no legislation in force until the date of accession provided for such a restriction?’
Consideration of the questions referred
The second question
21      In the present case, the Court finds it appropriate to begin its analysis by examining the second question. As it is apparent from the question referred, the tax authority has based the restriction on the right of deduction of input VAT that it relies on against Randstad España solely on the standstill clause.
22      By that question, the referring court asks, in essence, whether the second paragraph of Article 176 of the VAT Directive must be interpreted as precluding national legislation which enters into force on the date of the concerned Member State’s accession to the European Union, and which introduces an exclusion from the right to deduct input VAT in respect of the acquisition of goods and services, such as tickets to attend sporting events, intended to show appreciation for clients, customers, salaried employees or third parties.
23      According to settled case-law, the right of deduction provided for in Article 168(a) of the VAT Directive is an integral part of the VAT scheme and in principle may not be limited. The right to deduct must be exercised immediately in respect of all the VAT charged on transactions relating to inputs (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 25 and the case-law cited).
24      It is also apparent from the case-law of the Court that derogations from the right to deduct VAT are permitted only in the cases expressly provided for by the provisions of the directives governing that tax and are to be interpreted strictly (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 28 and the case-law cited).
25      Those derogations include the second paragraph of Article 176 of the VAT Directive – which is in essence identical to the second subparagraph of Article 17(6) of the Sixth Directive – the adoption of which did not affect the case-law relating to the interpretation of the second subparagraph of Article 17(6) of the Sixth Directive (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 29 and the case-law cited).
26      Like the second subparagraph of Article 17(6) of the Sixth Directive which preceded it, the second paragraph of Article 176 of the VAT Directive contains a standstill clause, which provides, in particular, for the retention by States acceding to the European Union, of national exclusions from the right to deduct VAT which were applicable on the date of their accession, until such time as the Council has adopted the provisions envisaged by the first paragraph of Article 176, which it has failed to do (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 30 and the case-law cited).
27      The Court has specified that the Member States’ residual power to retain national exclusions from the right to deduct VAT, pursuant to the second paragraph of Article 176 of the VAT Directive, is not, however, absolute. Thus, the standstill clause is not intended to allow a new Member State to amend its domestic legislation on its accession to the European Union, the effect of which would be to extend the scope of existing exclusions, in a way which diverts that legislation from the objectives of the VAT Directive, which would be contrary to the very spirit of that clause (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 31 and the case-law cited).
28      In the case in the main proceedings, it is apparent from the order for reference that, before the date of accession of the Kingdom of Spain to the Community, on 1 January 1986, in that Member State there was no tax on consumption with a structure analogous to that of VAT, in force at that time in the Community. According to the referring court, the taxes which have been replaced by VAT, inter alia and principally the general tax on the turnover of companies and the tax on luxuries, did not provide for a general deduction scheme.
29      Therefore, the entry into force of the Sixth Directive in Spain resulted in the introduction of a general system of VAT deduction.
30      However, it is clear from an analysis of the scope of the standstill clause laid down in the second paragraph of Article 176 of the VAT Directive that it does not preclude a provision which brings about the retention in the legislation of a Member State of an exclusion which existed prior to its accession to the European Union, in so far as the scope of that exclusion remains unchanged.
31      It should first of all be observed, subject to verification on the part of the referring court, that points 3 and 5 of Article 33(1) of Law 30/1985, the content of which is reflected, in essence, in points 4 and 5 of Article 96(1) of Law 37/1992, do not appear to have extended the scope of the exclusion from the right of deduction at issue in the main proceedings, in breach of the objectives of the standstill clause laid down in the second paragraph of Article 176 of the VAT Directive.
32      Therefore, it must be found that the entry into force of those national provisions has not led to actual changes for economic operators which, in the absence of a system of VAT before the entry into force of those provisions, were not able to deduct input VAT on the expenditure in question.
33      Next, it must be held, as the Advocate General observes in point 42 of her Opinion, that the exclusion of
expenditure on amusements and entertainment from the right to deduct input VAT is consistent with the intention of the EU legislature. In view of the close link between such expenditure and
private consumer satisfaction, that exclusion
accords with the logic of the VAT system.
34      In that regard, it follows from the first paragraph of Article 176 of the VAT Directive that, although it is for the Council to determine the expenditure in respect of which VAT is not deductible, ‘VAT shall in no circumstances be deductible in respect of expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.’
35      In those circumstances, it would rather be the possibility of deducting input VAT on expenditure on amusements and entertainment that might appear contrary to the objectives of the VAT Directive.
36      Moreover, an interpretation to that effect allows all Member States to benefit from the effectiveness of the second paragraph of Article 176 of the VAT Directive, regardless of which indirect tax scheme on consumption applied before their accession to the European Union. In that regard, as the Advocate General observes, in essence, in points 4 and 46 to 48 of her Opinion, an interpretation to the contrary might be to the detriment of those Member States which, prior to their accession to the European Union, did not have, in their national legislation, a system of taxation equivalent or identical to VAT.
37      Lastly, the national legislation at issue adequately defines the nature or the purpose of the goods and services in respect of which the right to deduct VAT is excluded in order to ensure that that option granted to the Member States is not used to authorise general exclusions from that system (see judgment of 2 May 2019, Grupa Lotos, C‑225/18, EU:C:2019:349, paragraph 40 and the case-law cited).
38      The exclusion of acquisitions of goods or services intended to show appreciation for clients, customers, salaried employees or third parties, provided for by that legislation, from the right of deduction is sufficiently specific and not of a general nature.
39      In any event, the fact that that the expenditure at issue is tax deductible for the purposes of income tax in Spain, as pointed out by the referring court in the order for reference, has no bearing on the present case. As the Advocate General states in point 35 of her Opinion, income tax law is not harmonised under EU law, with the result that Member States are free to keep in force or adopt different rules governing prohibitions on deducting expenditure from that taxable basis. Moreover, legislation governing income tax pursues other objectives, namely, as a general rule, to tax income from an activity or goods, whereas VAT law taxes expenditure for consumer goods.
40      In the light of the foregoing, the answer to the second question is that the second paragraph of Article 176 of the VAT Directive must be interpreted as not precluding national legislation which enters into force on the date of the concerned Member State’s accession to the European Union, and which introduces an exclusion from the right to deduct input VAT in respect of expenditure for the acquisition of goods and services, such as tickets to attend sporting events, intended to show appreciation for clients, customers, salaried employees or third parties.
The first question
41      In the light of the answer provided to the second question, there is no need to answer the first question.
Costs
42      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Seventh Chamber) hereby rules:
The second paragraph of Article 176 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax
must be interpreted as not precluding national legislation which enters into force on the date of the concerned Member State’s accession to the European Union, and which introduces an exclusion from the right to deduct input value added tax in respect of expenditure for the acquisition of goods and services, such as tickets to attend sporting events, intended to show appreciation for clients, customers, salaried employees or third parties.
[Signatures]
*      Language of the case: Spanish.