Case C-661/18: Judgment of the Court (Seventh Chamber) of 30 April 2020 (request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD) — Portugal) — CTT — Correios de Portugal v Autoridade Tributária e Aduaneira (Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Deduction of input tax — Article 173 — Mixed taxable person — Deduction methods — Pro rata method — Deduction on the basis of actual use — Article 184 to Article 186 — Adjustment of deductions — Change in the factors used to determine the amount to be deducted — Output transaction incorrectly regarded as VAT-exempt — National measure prohibiting a change in the deduction method for years that have already elapsed — Limitation period — Principles of fiscal neutrality, legal certainty, effectiveness, and proportionality)
Date: 2020-04-30
Institutions: Court of Justice
Subjects: VAT, principle of legal certainty, principle of proportionality, tax exemption, tax law, tax relief, taxpayer








C_2020240EN.01001002.xml










20.7.2020   


EN


Official Journal of the European Union


C 240/10






Judgment of the Court (Seventh Chamber) of 30 April 2020 (request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD) — Portugal) — CTT — Correios de Portugal v Autoridade Tributária e Aduaneira
(Case C-661/18) (1)

(Reference for a preliminary ruling - Value added tax (VAT) - Directive 2006/112/EC - Deduction of input tax - Article 173 - Mixed taxable person - Deduction methods - Pro rata method - Deduction on the basis of actual use - Article 184 to Article 186 - Adjustment of deductions - Change in the factors used to determine the amount to be deducted - Output transaction incorrectly regarded as VAT-exempt - National measure prohibiting a change in the deduction method for years that have already elapsed - Limitation period - Principles of fiscal neutrality, legal certainty, effectiveness, and proportionality)
(2020/C 240/13)
Language of the case: Portuguese

Referring court

Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD)

Parties to the main proceedings


Applicant: CTT — Correios de Portugal

Defendant: Autoridade Tributária e Aduaneira

Operative part of the judgment







1.


Article 173(2)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in the light of the EU law principles of fiscal neutrality, legal certainty and proportionality, must be interpreted as not precluding a Member State, when authorising a taxable person to deduct VAT on the basis of the use made of all or part of the goods and services used both for transactions in respect of which VAT is deductible and for transactions in respect of which VAT is not deductible pursuant to that provision, from prohibiting such a taxable person from changing the deduction method once the final proportion has been fixed.










2.


Articles 184 to 186 of the VAT Directive, read in the light of the EU law principles of fiscal neutrality, effectiveness and proportionality, must be interpreted as precluding national legislation under which a taxable person who deducted VAT charged on the acquisition of goods and services used both for transactions in respect of which VAT is deductible and for transactions in respect of which VAT is not deductible, using the turnover-based method, is denied the opportunity, once the final proportion has been fixed pursuant to Article 175(3) of that directive, to correct those deductions, by using the actual use method in a situation where:






—


the Member State concerned authorises taxable persons to deduct VAT on the basis of the use made of all or part of the goods and services used both for transactions in respect of which VAT is deductible and for transactions in respect of which VAT is not deductible, pursuant to Article 173(2)(c) of that directive;










—


the taxable person was unaware, and acting in good faith, when choosing the deduction method, that a transaction which it regarded as exempt was in fact taxable;










—


the general limitation period fixed by the national law for the purposes of adjusting the deductions has not yet expired, and










—


the change in the deduction method makes it possible to establish more precisely the proportion of VAT relating to transactions in respect of which VAT is deductible.










(1)  OJ C 25, 21.1.2019.