SC Fatorie SRL v Direcţia Generală a Finanţelor Publice Bihor.
Date: 2014-02-06
25. It is settled case-law that the Court may refuse to rule on a request for a preliminary ruling made by a national court only where it is quite obvious that the interpretation of European Union law that is sought bears no relation to the facts of the main action or to its subject-matter, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (Case C-11/07 Eckelkamp and Others  [2008] ECR I-6845, paragraph 28, and Case C-259/12 Rodopi-M 91  [2013] ECR, paragraph 27).
29. It must be recalled to begin with that, under the reverse charge regime, no VAT payment takes place between the supplier and the recipient of the services, the recipient being liable, in respect of the transactions carried out, for the input VAT, while being able, in principle, to deduct that tax so that no amount is payable to the tax authorities.
30. It must also be pointed out, first, that the right to deduct forms an integral part of the VAT mechanism and in principle cannot be limited ( Bockemühl , paragraph 38, and Case C-368/09 Pannon Gép Centrum  [2010] ECR I-7467, paragraph 37 and the case-law cited).
31. The rules governing deduction are meant to relieve the taxable person entirely of the burden of the VAT payable or paid in the course of all his economic activities. The common system of VAT consequently ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that those activities are themselves subject in principle to VAT (see Case C‑408/98 Abbey National  [2001] ECR I‑1361, paragraph 24, and Joined Cases C‑439/04 and C‑440/04 Kittel and Recolta Recycling  [2006] ECR I‑6161, paragraph 48).
32. As regards, secondly, the procedures for exercising the right to deduct VAT listed in Article 178 of the VAT Directive, only that set out in Article 178(f) of that directive is applicable since a reverse charge procedure under Article 199(1)(a) of that directive is at issue.
33. In this connection, a taxable person who is liable as the recipient of services for the VAT relating thereto is not obliged to hold an invoice drawn up in accordance with the formal requirements of the VAT Directive in order to be able to exercise his right to deduct, and only has to fulfil the formalities laid down by the Member State concerned in the exercise of the option conferred by Article 178(f) of that directive (see, to that effect, Bockemühl , paragraph 47).
34. It is also apparent from the Court’s case-law that the scope of the formalities laid down by the Member State concerned, which must be complied with by a taxable person in order to be able to exercise the right to deduct VAT, should not exceed what is strictly necessary for the purposes of verifying the correct application of the reverse charge procedure and ensuring that the VAT is collected (see, to that effect, Bockemühl , paragraph 50, and Case C-392/09 Uszodaépítő  [2010] ECR I-8791, paragraph 38).
35. Thus, the Court has already held that, in the context of the reverse charge procedure, the principle of fiscal neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements (Joined Cases C‑95/07 and C‑96/07 Ecotrade  [2008] ECR I‑3457, paragraph 63, and Uszodaépítő , paragraph 39).
38. Such a situation prevented the tax authorities from investigating the application of the reverse charge regime and led to a risk of a loss of tax revenue for the Member State concerned.
39. Moreover, it is settled case-law that the right to deduct can be exercised only in respect of taxes actually due, that is to say, the taxes corresponding to a transaction subject to VAT or paid in so far as they were due (Case C-342/87 Genius Holding  [1989] ECR 4227, paragraph 13, and Case C-454/98 Schmeink & Cofreth and Strobel  [2000] ECR I‑6973, paragraph 53).
42. However, the recipient of the services which paid VAT that was not due to the service supplier can request repayment of the VAT from it in accordance with the national law.
46. First of all, it must be acknowledged that the principle of legal certainty, requires the tax position of the taxable person, having regard to his rights and obligations vis-à-vis the tax authorities, not to be open to challenge indefinitely (see, to that effect, Ecotrade , paragraph 44).
47. In this connection, in its written observations the Romanian Government refers to Article 105(3) of Government Order No 92/2003 on the Tax Procedure Code which allows, in exceptional circumstances, before the expiry of the limitation period, a new investigation to be carried out concerning a particular period where additional information unknown to the tax investigators at the date of the investigation or errors in calculation having an effect on the results of that investigation come to light.
48. It must be conceded that such rules, the clarity of which and the predictability of which for the taxable person have not been seriously called into question, comply with the principle of legal certainty.
50. Concerning the default interest, it must be observed that, in the absence of harmonisation of European Union legislation in the field of the penalties applicable in cases where conditions laid down by arrangements under such legislation are not complied with, Member States retain the power to choose the penalties which seem to them to be appropriate. They must, however, exercise that power in accordance with European Union law and its general principles, and, consequently, in accordance with the principle of proportionality (see, to that effect, inter alia, Case C-210/91 Commission  v Greece  [1992] ECR I-6735, paragraph 19 and the case-law cited; Case C-213/99 de Andrade  [2000] ECR I-11083, paragraph 20; and Rodopi-M 91 , paragraph 31).
51. Having regard to the foregoing, the answer to the second question is that the principle of legal certainty does not preclude an administrative practice of the national tax authorities whereby, within a limitation period, they revoke a decision by which they granted the taxable person the right to deduct VAT and then, following a fresh investigation, order him to pay that VAT together with default interest.
Costs