TGE Gas Engineering GmbH - Sucursal em Portugal v Autoridade Tributária e Aduaneira.
Date: 2018-08-07
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Article 9 of the VAT Directive defines ‘taxable person’ as being any person who carries out any economic activity ‘independently’. It is especially important for the uniform application of the VAT Directive that the notion of ‘taxable person’, defined in Title III thereof, should be given an autonomous and uniform interpretation (judgment of 17 September 2014, Skandia America (USA), filial Sverige, C‑7/13, EU:C:2014:2225, paragraph 23).
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With regard to a company established in one Member State and its branch located in another Member State, it is apparent from the case-law of the Court that those two entities constitute a single taxable person subject to VAT (see, to that effect, judgments of 23 March 2006, FCE Bank, C‑210/04, EU:C:2006:196, paragraph 37; of 16 July 2009, Commission v Italy, C‑244/08, not published, EU:C:2009:478, paragraph 38; and of 12 September 2013, Le Crédit Lyonnais, C‑388/11, EU:C:2013:541, paragraph 34), unless it is established that the branch carries out an independent economic activity. It is necessary in that regard to determine whether that branch may be considered to be independent, in particular in that it bears the economic risk arising from its business (judgment of 23 March 2006, FCE Bank, C‑210/04, EU:C:2006:196, paragraph 35).
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It should be recalled, on the other hand, that, according to settled case-law, the right to deduct laid down in Articles 167 and 168 of the VAT Directive is an integral part of the VAT mechanism and in principle may not be limited (see, inter alia, judgments of 8 May 2008, Ecotrade, C‑95/07 and C‑96/07, EU:C:2008:267, paragraph 39 and the case-law cited; of 12 July 2012, EMS-Bulgaria Transport, C‑284/11, EU:C:2012:458, paragraph 44; and of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 30).
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In the present case, as TGE Bonn and TGE Sucursal em Portugal must be regarded as constituting a single legal entity and, therefore, a single taxable person, the principle of fiscal neutrality requires the deduction of input VAT to be allowed if the substantive requirements governing that deduction are satisfied (see, by analogy, judgment of 27 September 2007, Collée, C‑146/05, EU:C:2007:549, paragraph 31).
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Consequently, where the tax authority has the information necessary to establish that the taxable person, as the recipient of the supplies in question, is liable to VAT, it cannot, in relation to the right of that taxable person to deduct that tax, impose additional conditions which may have the effect of rendering that right ineffective for practical purposes (judgments of 1 April 2004, Bockemühl, C‑90/02, EU:C:2004:206, paragraph 51, and of 8 May 2008, Ecotrade, C‑95/07 and C‑96/07, EU:C:2008:267, paragraph 64).
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In that regard, it should be recalled that, in accordance with the first sentence of Article 44 of the VAT Directive, the place of supply of services to a taxable person acting as such is the place where that person has established his business. The EU legislature used that point of reference principally because, as an objective criterion that is simple and practical, it offers great legal certainty (judgment of 16 October 2014, Welmory, C‑605/12, EU:C:2014:2298, paragraphs 53 to 55). By contrast, the connection to the taxable person’s fixed establishment, referred to in the second sentence of Article 44 of the VAT Directive, is a secondary point of reference which is an exception to the general rule (judgment of 16 October 2014, Welmory, C‑605/12, EU:C:2014:2298, paragraph 56).