PARAT Automotive Cabrio Textiltetőket Gyártó Kft. v Adó- és Pénzügyi Ellenőrzési Hivatal, Hatósági Főosztály, Észak-magyarországi Kihelyezett Hatósági Osztály.
Date: 2009-04-23
15. In order to answer that question, it is to be recalled first of all that the right to deduct VAT, as an integral part of the VAT scheme, is a fundamental principle underlying the common system of VAT, and in principle may not be limited (see Joined Cases C‑110/98 to C‑147/98 Gabalfrisa and Others  [2000] ECR I‑1577, paragraph 43; Case C‑409/99 Metropol and Stadler  [2002] ECR I‑81, paragraph 42; and Case C‑465/03 Kretztechnik  [2005] ECR I‑4357, paragraph 33).
16. The Court has also ruled, in the paragraphs of the case-law cited above, that, according to the principles governing the common system of VAT, that tax applies to each transaction by way of production or distribution, after deduction has been made of the VAT which has been levied directly on transactions relating to inputs. The right of deduction must be exercised immediately in respect of all the taxes charged on input transactions. It follows that any limitation on the right of deduction of VAT affects the level of the tax burden and must be applied in a similar manner in all Member States.
17. In addition, it should be pointed out that Article 17(2) of the Sixth Directive sets out, in explicit and precise terms, the principle of the taxable person’s right to deduct the amounts invoiced as VAT for goods supplied or services rendered to him, in so far as such goods or services are used for the purposes of his taxable transactions (see Metropol and Stadler , paragraph 43; Case C‑371/07 Danfoss and AstraZeneca  [2008] ECR I-0000, paragraph 27; and Case C‑414/07 Magoora [2008] ECR I‑0000, paragraph 29).
18. In those circumstances, derogations are permitted only in the cases expressly provided for in the Sixth Directive (see Joined Cases C‑177/99 and C‑181/99 Ampafrance and Sanofi  [2000] ECR I‑7013, paragraph 34; Danfoss and AstraZeneca , paragraph 26; and Magoora , paragraph 28).
20. Such national legislation introduces, with regard to the purchase of goods or services financed by a subsidy, a restriction of the right to deduct which is not permissible under Article 17(2) of the Sixth Directive (see, to that effect, Case C‑204/03 Commission  v Spain  [2005] ECR I‑8389, paragraphs 26 and 27, and Case C‑243/03 Commission  v France  [2005] ECR I‑8411, paragraph 32).
21. The principle of the right to deduct VAT is none the less subject to the derogation set out in the second subparagraph of Article 17(6) of the Sixth Directive. In accordance with that provision, Member States are authorised to retain their existing legislation as at the date of entry into force of that directive in regard to exclusion from the right of deduction of VAT until such time as the Council has determined the costs not covered by that right (see Metropol and Stadler , paragraph 44, and Danfoss and AstraZeneca , paragraph 28).
22. The second subparagraph of Article 17(6) of the Sixth Directive contains a standstill clause which provides for the retention of national exclusions from the right to deduct VAT which were applicable before the Sixth Directive entered into force for the Member State concerned. The objective of that provision is to allow Member States, pending the establishment by the Council of the Community system of exclusions from the right to deduct VAT, to maintain any rules of national law excluding that right to deduct which were actually applied by their public authorities at the date of entry into force of the Sixth Directive (see Metropol and Stadler , paragraph 48; Danfoss and AstraZeneca , paragraphs 30 and 31; and Magoora , paragraph 35).
23. However, arrangements providing for a derogation from the principle of the right to deduct VAT, which are laid down in a general manner in Article 17(2) of the Sixth Directive and which ensure the neutrality of that tax, are to be interpreted strictly (see Metropol and Stadler , paragraph 59, and Magoora , paragraph 28).
26. That legislation entails a restriction of the right to deduct which goes beyond what is authorised by Article 17(6) of the Sixth Directive.
28. Consequently, and in view of the strict interpretation which it must be given as a derogation, the second subparagraph of Article 17(6) of the Sixth Directive cannot be regarded as permitting a Member State to maintain a restriction of the right to deduct VAT which may also apply in a general manner to any expenditure related to the acquisition of goods, irrespective of its nature or purpose.
29. That interpretation is also obvious in the light of the history of that provision, which demonstrates a continuing intention on the part of the Community legislature to authorise only the exclusion of certain goods or services from the deduction system, and not to authorise general exclusions from that system (see, to that effect, Case C‑305/97 Royscot and Others  [1999] ECR I‑6671, paragraph 22, and Case C‑434/03 Charles and Charles-Tijmens  [2005] ECR I‑7037, paragraphs 32 and 35).
32. In order to answer that question, it should be recalled that the Court held in Case C‑62/93 BP Soupergaz  [1995] ECR I‑1883, paragraph 35, that Article 17(2) of the Sixth Directive clearly specifies the conditions giving rise to the right to deduct and the extent of that right, and does not leave the Member States any discretion as regards implementation.
34. The Court also stressed that, in so far as an exception from the system of deductions has not been established in accordance with the provisions of the Sixth Directive, the national tax authorities may not rely as against a taxable person on a provision derogating from the principle of the right to deduct VAT (see Case C‑228/05 Stradasfalti  [2006] ECR I‑8391, paragraph 66).
35. A taxable person having been subject to such a measure must therefore be able to recalculate his VAT debt in accordance with Article 17(2) of the Sixth Directive, in so far as the goods and services have been used for the purposes of taxable transactions (see Stradasfalti , paragraph 68).