Case C-160/11

Bawaria Motors sp. z o.o.

v

Minister Finansów

(Reference for a preliminary ruling from the Naczelny Sąd Administracyjny)

‛Directive 2006/112/EC — VAT — Article 136 — Exemptions — Articles 313 to 315 — Special margin scheme — Supply of second-hand vehicles by a taxable dealer — Vehicles previously supplied exempt from VAT to a taxable dealer by another taxable person which had a right of partial deduction of input tax’

Summary of the Judgment

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme applicable to taxable dealers — Margin scheme — Sale, by a taxable dealer, of second-hand vehicles acquired exempt from tax from a seller which had a right of partial deduction of input VAT — Entitlement of the taxable dealer to apply the margin scheme — None — Potential double taxation of the taxable dealer — No effect

(Council Directive 2006/112, Art. 313(1) and 314)

Articles 313(1) and 314 of Directive 2006/112 on the common system of value added tax, read in conjunction with Articles 136 and 315 of that directive must be interpreted as meaning that a taxable dealer is not eligible for the application of the margin scheme where it supplies motor vehicles considered to be second-hand goods, within the meaning of Article 311(1)(1) of that directive, which it has previously acquired exempt from VAT from another taxable person which had only a right of partial deduction of input VAT paid on the purchase price of those vehicles.

The fact that such an interpretation results in the taxable dealer being subjected to partial double taxation has no effect on the determination of the conditions under which the margin scheme is applied. It falls to the national legislature to end such a situation.

(see paras 40-42, 46, operative part)

Case C-160/11

Bawaria Motors sp. z o.o.

v

Minister Finansów

(Reference for a preliminary ruling from the Naczelny Sąd Administracyjny)

‛Directive 2006/112/EC — VAT — Article 136 — Exemptions — Articles 313 to 315 — Special margin scheme — Supply of second-hand vehicles by a taxable dealer — Vehicles previously supplied exempt from VAT to a taxable dealer by another taxable person which had a right of partial deduction of input tax’

Summary of the Judgment

Harmonisation of fiscal legislation — Common system of value added tax — Special scheme applicable to taxable dealers — Margin scheme — Sale, by a taxable dealer, of second-hand vehicles acquired exempt from tax from a seller which had a right of partial deduction of input VAT — Entitlement of the taxable dealer to apply the margin scheme — None — Potential double taxation of the taxable dealer — No effect

(Council Directive 2006/112, Art. 313(1) and 314)

Articles 313(1) and 314 of Directive 2006/112 on the common system of value added tax, read in conjunction with Articles 136 and 315 of that directive must be interpreted as meaning that a taxable dealer is not eligible for the application of the margin scheme where it supplies motor vehicles considered to be second-hand goods, within the meaning of Article 311(1)(1) of that directive, which it has previously acquired exempt from VAT from another taxable person which had only a right of partial deduction of input VAT paid on the purchase price of those vehicles.

The fact that such an interpretation results in the taxable dealer being subjected to partial double taxation has no effect on the determination of the conditions under which the margin scheme is applied. It falls to the national legislature to end such a situation.

(see paras 40-42, 46, operative part)