Case C-496/11: Judgment of the Court (Sixth Chamber) of 6 September 2012 (reference for a preliminary ruling from the Tribunal Central Administrativo Sul — Portugal) — Portugal Telecom SGPS, SA v Fazenda Pública (VAT — Sixth Directive — Articles 17(2) and 19 — Deductions — VAT due or paid for services acquired by a holding company — Services having a direct, immediate and unequivocal relationship with taxable output transactions)
Date: 2012-09-06
Institutions: Court of Justice
Subjects: VAT, basis of tax assessment, holding company, interpretation of the law, tax collection, tax harmonisation, tax relief








C_2012331EN.01001201.xml










27.10.2012   


EN


Official Journal of the European Union


C 331/12






Judgment of the Court (Sixth Chamber) of 6 September 2012 (reference for a preliminary ruling from the Tribunal Central Administrativo Sul — Portugal) — Portugal Telecom SGPS, SA v Fazenda Pública
(Case C-496/11) (1)

(VAT - Sixth Directive - Articles 17(2) and 19 - Deductions - VAT due or paid for services acquired by a holding company - Services having a direct, immediate and unequivocal relationship with taxable output transactions)
(2012/C 331/18)
Language of the case: Portuguese

Referring court

Tribunal Central Administrativo Sul

Parties to the main proceedings


Applicant: Portugal Telecom SGPS SA

Defendant: Fazenda Pública

Intervening party: Ministério Público

Re:

Reference for a preliminary ruling — Tribunal Central Administrativo Sul — Interpretation of Article 17(2) of the 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) — Deductions — Tax incurred or paid for services acquired by a holding — Services with a direct, immediate and unequivocal relationship with taxable transactions downstream

Operative part of the judgment

Article 17(2) and (5) 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 must be interpreted as meaning that a holding company such as that at issue in the main proceedings which, in addition to its main activity of managing shares in companies in which it holds all or part of the share capital, acquires goods and services which it subsequently invoices to those companies is authorised to deduct the amount of input VAT provided that the input services acquired have a direct and immediate link with the output economic transactions giving rise to a right to deduct. Where those goods and services are used by the holding company in order to perform both economic transactions giving rise to a right to deduct and economic transactions which do not, the deduction is allowed only in respect of the part of the VAT which is proportional to the amount relating to the former transactions and the national tax authorities are authorised to provide for one of the methods for determining the right to deduct in Article 17(5). Where those goods and services are used both for economic and non-economic activities, Article 17(5) of the Sixth Directive is not applicable and the methods of deduction and apportionment are to be defined by the Member States which, in exercising that power, must take account of the purpose and general scheme of the Sixth Directive and, on that basis, lay down a method of calculation which objectively reflects the input expenditure actually attributed to each of those two activities.


(1)  OJ C 362, 10.12.2011.