Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft GbR v Finanzamt Krefeld.
Date: 2016-06-09
25


In this connection, it should be noted that the extent of the right to deduct varies according to the intended use of the goods and services at issue. Whilst, for goods and services intended to be used exclusively for the carrying out of taxable transactions, Article 17(2) of the Sixth Directive provides that taxable persons are entitled to deduct all the tax that has been charged on their acquisition or supply, for goods and services intended for a mixed use, the first subparagraph of Article 17(5) of the directive states that the right to deduct is limited to such proportion of the VAT as is attributable to the transactions in respect of which VAT is deductible that are carried out by means of those goods or services.
26


In the light of that difference in the extent of the right to deduct according to the intended use of the goods and services on which VAT has been charged, the Member States are, in principle, required to lay down that taxable persons, in order to determine the amount that they are entitled to deduct, must, in a first stage, assign the input goods and services to the various output transactions which have been carried out and for the performance of which they were intended. In a second stage, the competent authorities of those States have the task of applying, in respect of those goods or services, the deduction arrangement corresponding to their assignation; the arrangement laid down in Article 17(5) of the Sixth Directive should, however, be applied so far as concerns goods and services which do not relate to a single type of transaction.
32


Nonetheless, the Court has accepted that, when the Member States make use of certain of the options provided for in the third subparagraph of Article 17(5) of the Sixth Directive, they may apply a calculation method different from the one referred to in the previous paragraph of the present judgment, subject to the condition, in particular, that the method used guarantees a more precise determination of the deductible proportion of the input VAT than that arising from application of that first method (see, to this effect, judgment of 8 November 2012 in BLC Baumarkt, C‑511/10, EU:C:2012:689, paragraph 24).
33


That condition does not, however, mean that the method chosen must necessarily be the most precise possible. As the Advocate General has observed in point 90 of his Opinion, the operative part of the judgment of 8 November 2012 in BLC Baumarkt (C‑511/10, EU:C:2012:689) merely requires that the method chosen must guarantee a more precise result than the result which would arise from application of the turnover-based allocation key (see also, to this effect, judgment of 10 July 2014 in Banco Mais, C‑183/13, EU:C:2014:2056, paragraph 29).
40


Consequently, in order to determine whether that provision covers such a situation, it is necessary to examine its context and the objectives pursued by the legislation of which it forms part (see to this effect, inter alia, judgment of 27 November 2003 in Zita Modes, C‑497/01, EU:C:2003:644, paragraph 34).
41


So far as concerns the context in which Article 20(1)(b) of the Sixth Directive is laid down, it is clear from Article 17(5) of the directive, read in conjunction with Article 19(1), that the amount of VAT charged on the mixed-use input goods or services supplied that is deductible is determined by applying an allocation key which may be that provided for by those provisions, based on turnover, or another allocation key chosen in accordance with the third subparagraph of Article 17(5) of the directive in so far as for the activity in question that allocation key enables more precise results to be achieved when calculating the deductible proportion (see, to this effect, judgment of 8 November 2012 in BLC Baumarkt, C‑511/10, EU:C:2012:689, paragraph 24).
43


So far as concerns the objective pursued by the adjustment mechanism set up by the Sixth Directive, that mechanism is intended, in particular, to enhance the precision of VAT deductions (see, to this effect, judgments of 30 March 2006 in Uudenkaupungin kaupunki, C‑184/04, EU:C:2006:214, paragraph 25, and of 18 October 2012 in TETS Haskovo, C‑234/11, EU:C:2012:644, paragraph 31).
44


As is pointed out in paragraphs 32 and 33 of the present judgment, as regards mixed-use goods and services the method provided for by the Sixth Directive for determining the deduction entitlement may be departed from only in order to apply another method guaranteeing a more precise result.
46


Thus, it is clear from examination of the context of Article 20(1)(b) of the Sixth Directive and the objective pursued by the mechanism for the adjustment of deductions which the directive sets up that that provision must be interpreted as covering the situation where the method of calculating the deduction entitlement applicable to mixed-use goods and services is changed.
49


First of all, it should be recalled that the principles of the protection of legitimate expectations and of legal certainty form part of the EU legal order. They must accordingly be observed not only by the EU institutions, but also by the Member States when they exercise the powers conferred on them by EU directives (judgment of 29 April 2004 in Gemeente Leusden and Holin Groep, C‑487/01 and C‑7/02, EU:C:2004:263, paragraph 57).
51


That said, in construing a provision of secondary EU law, such as Article 20 of the Sixth Directive, preference should as far as possible be given to the interpretation which renders the provision consistent with the general principles of EU law and, more specifically, with the principles of legal certainty and of the protection of legitimate expectations (see, to this effect, judgment of 29 April 2010 in M and Others, C‑340/08, EU:C:2010:232, paragraph 64).
53


It is clear from settled case-law that, when the Member States apply the provisions of their domestic law transposing a directive, they are required to interpret them, as far as possible, in accordance with that directive (see, to this effect, judgment of 27 June 2000 in Océano Grupo Editorial and Salvat Editores, C‑240/98 to C‑244/98, EU:C:2000:346, paragraph 31).
56


It is in principle compatible with EU law for a new rule of law to apply from the entry into force of the act introducing it (judgment of 7 November 2013 in Gemeinde Altrip and Others, C‑72/12, EU:C:2013:712 paragraph 22). Consequently, the principles of legal certainty and of the protection of legitimate expectations do not preclude, in principle, a Member State from being able to amend an old law with immediate effect, without laying down transitional arrangements.
58


Thus, as the referring court points out, the Court has held that a national legislature may breach the principles of legal certainty and of the protection of legitimate expectations when it suddenly and unexpectedly adopts a new law which withdraws a right that taxable persons enjoyed until then, without allowing them the time necessary to adjust, when the objective to be attained did not so require (see, to this effect, judgment of 29 April 2004 in Gemeente Leusden and Holin Groep, C‑487/01 and C‑7/02, EU:C:2004:263, paragraph 70).
59


In particular, taxable persons must have time to adapt when withdrawal of the right which they enjoyed until then obliges them to carry out consequential economic adjustments (see, to this effect, judgment of 11 June 2015 in Berlington Hungary and Others, C‑98/14, EU:C:2015:386, paragraph 87).
63


So far as concerns, finally, the fact that, by virtue of national legislation such as that at issue in the main proceedings, the method of calculating the deduction entitlement is amended although the previous method was described as ‘reasonable’ by one of the supreme courts of the Member State concerned, it should be pointed out that the principles of legal certainty and of the protection of legitimate expectations, in the light of which Article 20 of the Sixth Directive must be interpreted, do not in principle prevent a national legislature from amending its legislation designed to implement EU law (see, by analogy, judgment of 14 January 2010 in Stadt Papenburg, C‑226/08, EU:C:2010:10, paragraph 46 and the case-law cited).