Judgment of the Court (Third Chamber) of 6 September 2012 (reference for a preliminary ruling from the Legfelsőbb Bíróság — Hungary) — Gábor Tóth v Nemzeti Adó- és Vámhivatal Észak-magyarországi Regionális Adó Főigazgatósága

(Case C-324/11) (1)

(Taxation - VAT - Directive 2006/112/EC - Article 9 - Meaning of taxable person - Right to deduct - Refusal - Principle of tax neutrality - Issuer of the invoice removed from the business register - Issuer of the invoice having failed to declare his employees to the tax authority - Obligation of the taxable person to satisfy himself as to the propriety of the conduct of the issuer of that invoice vis-à-vis the tax authority)

(2012/C 331/14)

Language of the case: Hungarian

Referring court

Legfelsőbb Bíróság

Parties to the main proceedings

Applicant: Gábor Tóth

Defendant: Nemzeti Adó- és Vámhivatal Észak-magyarországi Regionális Adó Főigazgatósága

Re:

Reference for a preliminary ruling — Magyar Köztársaság Legfelsöbb Bírósága — Interpretation of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — Conditions for the exercise of the right to deduct input tax in the practice of the national tax authorities — Tax payer’s obligation to satisfy himself both as to the tax status of the issuer of the invoice and as to the lawfulness of the legal relationship and tax situation of the issuer’s employees who carry out the invoiced work

Operative part of the judgment

1. Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and the principle of tax neutrality must be interpreted as meaning that they preclude the tax authority from refusing a taxable person the right to deduct value added tax due or paid for services provided to him solely on the ground that the business operator’s licence of the issuer of the invoice had been withdrawn before he provided the services in question or issued the invoice for them, where that invoice contains all the information required by Article 226 of that directive, in particular the information necessary to identify the person who drew up the invoice and the nature of the services supplied.

2. Directive 2006/112 must be interpreted as meaning that it precludes the tax authority from refusing a taxable person the right to deduct value added tax due or paid for services provided to him on the ground that the issuer of the invoice relating to those services did not declare the workers he employed, without that authority establishing, on the basis of objective evidence, that the taxable person concerned knew, or ought to have known, that the transaction relied on as a basis for the right to deduct was connected with fraud committed by the issuer of the invoice or by another trader acting earlier in the chain of supply.

3. Directive 2006/112 must be interpreted as meaning that the fact that a taxable person did not verify either whether a legal relationship existed between the workers employed on a work site and the issuer of the invoice or whether the latter had declared those workers does not constitute an objective factor which demonstrates that the addressee of the invoice knew or ought to have known that he was participating in a transaction involving fraudulent evasion of value added tax, where the addressee was not in possession of any material justifying the suspicion that irregularities or fraud had been committed within that invoice issuer’s sphere of activity. Accordingly, the right to deduct may not be refused on that ground where the material and formal conditions laid down by that directive for the exercise of that right are met.

4. Where the tax authority provides specific evidence of the existence of fraud, Directive 2006/112 and the principle of tax neutrality do not preclude the national court from verifying, on the basis of an overall examination of the circumstances of the case, whether the issuer of the invoice carried out the transaction in question himself. However, in a situation such as that at issue in the main proceedings, the right to deduct may be refused only where it is established by the tax authority, on the basis of objective evidence, that the addressee of the invoice knew or should have known that the transaction relied on as a basis for the right to deduct was connected with a fraud committed by the issuer or another operator supplying inputs in the chain of supply.

(1) OJ C 282, 24.9.2011.