Avon Cosmetics Ltd v The Commissioners for Her Majesty's Revenue and Customs.
Date: 2017-12-14
36


As the Court has already held, national derogating measures designed to prevent the evasion or avoidance of tax must be interpreted strictly and may not derogate from the basis for charging VAT laid down in Article 11 of the Sixth Directive, except within the limits strictly necessary for achieving that aim (judgments of 10 April 1984, Commission v Belgium, 324/82, EU:C:1984:152, paragraph 29, and of 29 May 1997, Skripalle, C‑63/96, EU:C:1997:263, paragraph 24).
37


According to the fundamental principle which underlies the VAT system, and which follows from Article 2 of the Sixth Directive, VAT 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 to deduct is an integral part of the VAT scheme and in principle may not be limited (see, to that effect, judgments of 6 July 1995, BP Supergas, C‑62/93, EU:C:1995:223, paragraphs 16 and 18, and of 19 September 2000, Ampafrance and Sanofi, C‑177/99 and C‑181/99, EU:C:2000:470, paragraph 34).
44


As regards the validity of Decision 89/534, first, it should be noted that, in order for an EU measure relating to the VAT system to be compatible with the principle of proportionality, the provisions which it contains must be considered to be appropriate and necessary for the attainment of the objectives which it pursues and to be such as to affect as little as possible the objectives and principles of the Sixth Directive (see, to that effect, judgments of 19 September 2000, Ampafrance and Sanofi, C‑177/99 and C‑181/99, EU:C:2000:470, paragraph 60, and of 29 April 2004, Sudholz, C‑17/01, EU:C:2004:242, paragraph 46).
46


The Court has held that the concept of ‘tax avoidance’, within the meaning of Article 27(1) of the Sixth Directive, corresponds to a purely objective phenomenon and that that provision permits the adoption of a measure derogating from the basic rule set out in Article 11A(1)(a) of that directive even where the taxable person carries on business not with any intention of obtaining a tax advantage but for commercial reasons (see, to that effect, judgment of 12 July 1988, Direct Cosmetics and Laughtons Photographs, 138/86 and 139/86, EU:C:1988:383, paragraphs 21 and 24).
52


Secondly, it should be recalled that the principle of fiscal neutrality precludes, in particular, treating similar goods or supplies of services, which are thus in competition with each other, differently for VAT purposes (judgment of 10 November 2011, The Rank Group, C‑259/10 and C‑260/10, EU:C:2011:719, paragraph 32 and the case-law cited).
59


It should be recalled that, according to the Court’s settled case-law, questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, 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 (judgment of 14 June 2017, Santogal M-Comércio e Reparação de Automóveis, C‑26/16, EU:C:2017:453, paragraph 31 and the case-law cited).