Keywords

Summary



Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Legislation providing for an administrative penalty which may be imposed on persons liable to pay the tax, such as the ‘additional tax’ provided for in the Polish legislation

(Council Directives 67/227, Art. 2, first and second paras and 77/388, Arts 2 and 10(1)(a) and (2))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Directive 77/388 – National derogating measures

(Council Directive 77/388, Art. 27(1))

3. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Prohibition on the levying of other domestic taxes which can be characterised as turnover taxes

(Council Directive 77/388, Art. 33)

Summary

1. The common system of value added tax, as defined in the first and second paragraphs of Article 2 of First Directive 67/227 on the harmonisation of legislation of Member States concerning turnover taxes and in Articles 2 and 10(1)(a) and (2) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 2004/66, does not preclude a Member State from providing in its legislation for an administrative penalty which may be imposed on persons liable to value added tax, such as the ‘additional tax’ provided for in Polish legislation which is due where it is found that the taxable person has indicated in the tax declaration submitted an amount of tax difference to be repaid or an amount of input tax to be repaid which is greater than the amount due.

Such an ‘additional tax’ does not have the essential characteristics of value added tax, since it arises not from any transaction but from a declaration error and the amount thereof is not proportional to the price charged by the taxable person. It is not a tax but in fact an administrative penalty imposed where it is established that the taxable person has indicated an amount of tax difference to be repaid in respect of value added tax or of input tax to be repaid which is greater than the amount due to that person.

The principle of a common system of value added tax does not preclude the introduction by the Member States of measures penalising irregularities committed when declarations are made as to the amount of value added tax due. On the contrary, Article 22(8) of the Sixth Directive provides that Member States may impose other obligations which they deem necessary for the correct levying and collection of the tax.

(see paras 18-21, operative part 1)

2. Provisions relating to value added tax which introduce an administrative penalty which is liable to be imposed on taxable persons subject to the tax where it is established that the taxable person has declared an overstated amount of value added tax difference to be repaid or an amount of input tax to be repaid greater than the amount due, do not constitute ‘special measures for derogation’ for preventing certain types of tax evasion or avoidance within the meaning of Article 27(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.

Such an administrative penalty cannot fall within the scope of Article 27(1), since it constitutes a measure referred to in Article 22(8) of the Sixth Directive, by virtue of which Member States may impose other obligations which they deem necessary for the correct levying and collection of the tax and for the prevention of fraud.

(see paras 23-25, operative part 2)

3. Article 33 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended, does not preclude the maintenance of provisions such as those in the Polish Law on the taxation of goods and services which provide for an administrative penalty which is liable to be imposed on a taxable person where it is established that that person has declared an amount of tax difference to be repaid in respect of the tax or of input tax to be repaid which is greater than the amount due to that person, provided that those provisions do not introduce a tax, a duty or a charge.

(see paras 28-29, operative part 3)