Case C-1/21: Judgment of the Court (Seventh Chamber) of 13 October 2022 (request for a preliminary ruling from the Administrativen sad Veliko Tarnovo — Bulgaria) — MC v Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Article 273 — Measures to ensure the correct collection of VAT — Article 325(1) TFEU — Obligation to counter illegal activities affecting the financial interests of the European Union — VAT debts of a taxable legal person — National legislation which provides for the joint and several liability of the non-taxable manager of the legal person — Transfers made in bad faith by the manager — Depletion of the legal person’s assets leading to insolvency — Failure to pay the amounts of VAT payable by the legal person within the prescribed time limits — Default interest — Proportionality)
Date: 2022-10-13
Institutions: Court of Justice
Subjects: VAT, financial solvency, interest, legal person, liability, manager, principle of proportionality, tax collection, tax law








C_2022463EN.01000502.xml










5.12.2022   


EN


Official Journal of the European Union


C 463/5






Judgment of the Court (Seventh Chamber) of 13 October 2022 (request for a preliminary ruling from the Administrativen sad Veliko Tarnovo — Bulgaria) — MC v Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite
(Case C-1/21) (1)

(Reference for a preliminary ruling - Value added tax (VAT) - Directive 2006/112/EC - Article 273 - Measures to ensure the correct collection of VAT - Article 325(1) TFEU - Obligation to counter illegal activities affecting the financial interests of the European Union - VAT debts of a taxable legal person - National legislation which provides for the joint and several liability of the non-taxable manager of the legal person - Transfers made in bad faith by the manager - Depletion of the legal person’s assets leading to insolvency - Failure to pay the amounts of VAT payable by the legal person within the prescribed time limits - Default interest - Proportionality)
(2022/C 463/06)
Language of the case: Bulgarian

Referring court

Administrativen sad Veliko Tarnovo

Parties to the main proceedings


Applicant: MC

Defendant: Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

Operative part of the judgment







1.


Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and the principle of proportionality
must be interpreted as not precluding national legislation providing for a system of joint and several liability for a legal person’s value added tax (VAT) debts in the following circumstances:






—


the person held jointly and severally liable is a manager or member of an executive body of the legal person;










—


the person held jointly and severally liable made, in bad faith, payments from the legal person’s assets which could be characterised as a hidden distribution of profits or dividends, or transferred those assets free of charge or at a price significantly lower than the market price;










—


the acts carried out in bad faith had the effect of rendering the legal person unable to pay all or part of the VAT for which it is liable;










—


the joint and several liability is limited to the amount by which the legal person’s assets were depleted as a result of the acts carried out in bad faith; and










—


that joint and several liability is incurred only in the alternative, where it proves impossible to recover from the legal person the amounts of VAT payable.














2.


Article 273 of Directive 2006/112 and the principle of proportionality
must be interpreted as not precluding national legislation providing for a system of joint and several liability, such as that described in point 1 of the operative part of the present judgment, which extends to default interest payable by the legal person for failure to pay VAT within the mandatory time limits laid down by that directive on account of acts committed in bad faith by the person designated as jointly and severally liable.






(1)  OJ C 88, 15.3.2021.