CELEX: C2003/226/05
Language: en
Date: 2003-09-20 00:00:00
Title: Case C-231/03: Reference for a preliminary ruling by the Tribunale Amministrativo Regionale per la Lombardia — Sezione staccata di Brescia — by order of that Court of 8 October 2002, 17 December 2002 and 14 February 2003 in the case of Consorzio Aziende Metano — CO.NA.ME. against il Comune di Cingia de' Botti; with the participation of Padania Acque S.p.A.

C 226/4              EN                        Official Journal of the European Union                                           20.9.2003
    the taxable person who receives it, the subsidy concerned                Court of Justice, inasmuch as it is a special rule which has
    will be liable to VAT twice. Although Article 19 provides                no basis in the directive, applies to all taxable persons in
    expressly that the Member States may include in the                      receipt of a subsidy, including fully taxable persons, and,
    deductible proportions for mixed taxable persons those                   even it if its applied to mixed taxable persons, it may in
    subsidies which are not part of the basis of assessment,                 certain circumstances be less advantageous than using the
    that exception to the ‘normal’ method of calculation is a                option provided for by Article 19 of the directive.
    tool available to the national legislature to prevent a body
    which is ‘by its nature’ subsidised obtaining repayment of
    VAT for carrying out a merely nominal activity in order to
    qualify as a taxable person. However, that provision is to          (1) OJ 1977 L 145, p. 1.
    be interpreted restrictively. On the other hand, it is clear
    that, by including subsidies in the deductible proportion,
    the right to deduct of mixed taxable persons is reduced,
    while that is not possible with regard to fully taxable
    persons. Article 19 is an optional provision and the
    Member States may determine the procedures for
    implementing it provided they observe, as a whole, the              Reference for a preliminary ruling by the Tribunale
    basic principles and provisions of the Sixth Directive,             Amministrativo Regionale per la Lombardia — Sezione
    which contains other provisions which make it possible to           staccata di Brescia — by order of that Court of
    prevent deductions considered to be abusive.                        8 October 2002, 17 December 2002 and 14 February
                                                                        2003 in the case of Consorzio Aziende Metano —
                                                                        CO.NA.ME. against il Comune di Cingia de' Botti; with
                                                                                   the participation of Padania Acque S.p.A.
                                                                                                  (Case C-231/03)
2.  Laying down of a special rule which limits the right to
    deduct VAT owed for the purchase of goods or services
    financed in whole or in part by subsidies (second para-                                       (2003/C 226/05)
    graph of Article 104(2) of the Spanish Law on VAT).
                                                                        Reference has been made to the Court of Justice of the
                                                                        European Communities by order of the Tribunale
    That special rule, according to which subsidies to finance          Amministrativo Regionale per la Lombardia — Sezione stac-
    the purchase of certain goods or services do not give rise          cata di Brescia (Lombardy Regional Administrative Court —
    to the application of the deductible proportion and are             Separate Chamber for Brescia) of 8 October 2002,
    not included in the denominator but instead limit the right         17 December 2002 and 14 February 2003, received at the
    to deduct the VAT paid on the portion of the price of the           Court Registry on 28 May 2003, for a preliminary ruling in the
    goods or services financed by the subsidy, is incompatible          case of Consorzio Aziende Metano — CO.NA.ME. against il
    with the Sixth Directive. Indeed, the Spanish provision             Comune di Cingia de' Botti; with the participation of Padania
    establishes a limit on the right to deduct in respect of fully      Acque S.p.A. on the following question:
    taxable persons which is not provided for under the
    directive. As for mixed taxable persons, the only limitation
    possible under the directive is the inclusion of the
    subsidies in the denominator of the deductible proportion.
                                                                        Do Articles 43, 49 and 81 EC, in so far as they prohibit,
    The VAT which a taxable person has paid for a certain
                                                                        respectively, restrictions on the freedom of establishment of
    service or certain goods is always deductible in accordance
                                                                        nationals of a Member State in the territory of another Member
    with the rules on the right to deduct provided for by the
                                                                        State and on the freedom to provide services within the
    directive and, to that end, the source of the financing for
                                                                        Community in respect of nationals of Member States and the
    the goods or services are of no relevance whatever. The
                                                                        commercial practices of undertakings which have as their effect
    Member States may take into account only those subsidies
                                                                        the prevention, restriction or distortion of competition within
    which are not linked to the price of the transaction, and
                                                                        the European Union, preclude provision for the direct award,
    may choose whether or not to include them in the
                                                                        without the announcement of a tender, of the management of a
    deductible proportion only if the taxable person carries
                                                                        public contract for the distribution of gas to a company in
    out, at the same time, taxed and exempt transactions.
                                                                        which a local authority participates, whenever that participa-
    Application of the provision is optional and the Member
                                                                        tion in the share capital is such as to preclude any direct control
    States may determine the procedures for implementing it
                                                                        over the management itself and must it therefore be declared
    provided they observe the basic principles and provisions
                                                                        that, as is the case in these proceedings where the shareholding
    of the Sixth Directive as a whole.
                                                                        amounts to 0,97 % of the share capital, the essential precondi-
                                                                        tions for ‘in-house’ management are not met?
    The Spanish provision infringes the fundamental right to
    deduct VAT, acknowledged as such in the case-law of the