Siemens Gamesa Renewable Energy România SRL v Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Soluţionare a Contestaţiilor and Agenţia Naţională de Administrare Fiscală - Direcţia Generală de Administrare a Marilor Contribuabili.
Date: 2018-09-12
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It must be recalled at the outset that the right of taxable persons to deduct the VAT due or already paid on goods purchased and services received as inputs from the VAT which they are liable to pay is a fundamental principle of the common system of VAT established by EU legislation (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 35 and the case-law cited).
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As the Court has repeatedly pointed out, the right of deduction provided for in Article 167 et seq. of Directive 2006/112 is an integral part of the VAT scheme and in principle may not be limited. In particular, the right of deduction is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 36 and the case-law cited).
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The deduction system is intended to relieve the trader 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 the neutrality of taxation of all economic activities, whatever the purpose or results of those activities, provided that they are themselves subject in principle to VAT (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 37 and the case-law cited).
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With regard to the substantive requirements or conditions, it is apparent from the wording of Article 168(a) of Directive 2006/112 that, in order to have a right to deduct, it is necessary, first, that the interested party be a ‘taxable person’ within the meaning of that directive and, second, that the goods or services relied on to confer entitlement to that right be used by the taxable person for the purposes of his own taxed output transactions, and that, as inputs, those goods or services must be supplied by another taxable person (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 39).
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As to the detailed rules governing the exercise of the right of deduction, which may be considered formal requirements or conditions, Article 178(a) of Directive 2006/112 provides that the taxable person must hold an invoice drawn up in accordance with Articles 220 to 236 and Articles 238 to 240 of that directive (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 40).
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According to settled case-law, the fundamental principle of VAT 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 (judgments of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 45; 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 41, and 26 April 2018, Zabrus Siret, C‑81/17, EU:C:2018:283, paragraph 44).
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In particular, identification for VAT purposes, provided for in Article 214 of Directive 2006/112, and the obligation of the taxable person to state when his activity as a taxable person commences, changes or ceases, provided for in Article 213 of that directive, are only formal requirements for the purposes of control, and they cannot compromise, inter alia, the right to deduct VAT, in so far as the substantive conditions which give rise to that right have been satisfied (judgments of 9 July 2015, Salomie and Oltean, C‑183/14, EU:C:2015:454, paragraph 60, and 7 March 2018, Dobre, C‑159/17, EU:C:2018:161, paragraph 32).
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Accordingly, a person taxable for VAT purposes may not be prevented from exercising his right of deduction on the ground that he had not been identified as a taxable person for those purposes before using the goods purchased in the context of his taxed activity (judgments of 21 October 2010, Nidera Handelscompagnie, C‑385/09, EU:C:2010:627, paragraph 51, and 7 March 2018, Dobre, C‑159/17, EU:C:2018:161, paragraph 33).
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Furthermore, the Court has held that penalising the failure on the part of the taxable person to comply with the obligations relating to accounts and tax returns by denial of the right of deduction clearly goes further than is necessary to attain the objective of ensuring the correct application of those obligations, since EU law does not prevent Member States from imposing, where necessary, a fine or a financial penalty proportionate to the seriousness of the offence (judgments of 9 July 2015, Salomie and Oltean, C‑183/14, EU:C:2015:454, paragraph 63, and 7 March 2018, Dobre, C-159/17, EU:C:2018:161, paragraph 34).
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The position could be different if the effect of breach of failure to satisfy formal requirements is to prevent the production of conclusive evidence that the substantive requirements have been satisfied (judgments of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 46 and the case-law cited, and 7 March 2018, Dobre, C‑159/17, EU:C:2018:161, paragraph 35).
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Similarly, the right of deduction may be refused, if it has been established, in the light of objective evidence, that that right is being invoked fraudulently or abusively (judgments of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 43, and 7 March 2018, Dobre, C-159/17, EU:C:2018:161, paragraph 36).