Fazenda Pública v Banco Mais SA.
Date: 2014-07-10
21. According to settled case-law, in interpreting a provision of EU law, it is necessary to consider the wording of that provision, the context in which that provision arises and the objectives pursued by the rules of which it is part (judgment in SGAE , C‑306/05, EU:C:2006:764, paragraph 34).
24. In the absence of any indication in the Sixth Directive as to the rules that may be used on that occasion, it is for Member States to prescribe them (see, to that effect, judgments in Royal Bank of Scotland , C‑488/07, EU:C:2008:750, paragraph 25, and Crédit Lyonnais , C‑388/11, EU:C:2013:541, paragraph 31).
25. Firstly, as is apparent from the wording of Articles 17(5) and 19(1) of the Sixth Directive, the latter provision refers only to the deductible proportion provided for in the first subparagraph of Article 17(5) of the directive and therefore sets out a detailed calculation rule only for the case referred to in the first subparagraph of Article 17(5) (see, to that effect, judgment in Royal Bank of Scotland , EU:C:2008:750, paragraph 22).
26. Secondly, while the second subparagraph of Article 17(5) of the Sixth Directive provides that the calculation rule applies to all mixed use goods and services acquired by a taxable person, the third subparagraph of Article 17(5), which also contains the provision in point (c), begins with the word ‘however’, which implies the existence of exceptions to that rule (judgment in Royal Bank of Scotland , EU:C:2008:750, paragraph 23).
27. However, in the exercise of the option, provided for under point (c) of the third subparagraph of Article 17(5) of the Sixth Directive, to derogate from the calculation rule provided for under the directive, all Member States must comply with the purpose and general system of that directive, and the principles on which the common system of VAT is based (judgments in BLC Baumarkt , C‑511/10, EU:C:2012:689, paragraph 22, and Crédit Lyonnais , EU:C:2013:541, paragraph 52).
28. In that regard, the Court noted that the deduction system is meant 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 must consequently ensure complete neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject, in principle, to VAT (judgment in Royal Bank of Scotland , EU:C:2008:750, paragraph 15).
29. Furthermore, the Court held that the purpose of the third subparagraph of Article 17(5) of the Sixth Directive is to allow Member States to take account of the specific characteristics of some activities of taxable persons in order to achieve greater accuracy in determining the extent of the right to deduct (see, to that effect, judgments in Royal Bank of Scotland , EU:C:2008:750, paragraph 24, and BLC Baumarkt , EU:C:2012:689, paragraphs 23 and 24).
30. It follows from the foregoing that having regard to, first, the purpose of point (c) of the third subparagraph of Article 17(5) of the Sixth Directive, secondly, the context of which that provision forms part, thirdly, the principles of fiscal neutrality and proportionality and, fourthly, the purpose of the third subparagraph of Article 17(5) of that directive, any Member State that exercises the option provided for under point (c) of the third subparagraph of Article 17(5) of the Sixth Directive must ensure that the method for calculating the right to deduct makes it possible to ascertain with the greatest possible precision the portion of VAT relating to transactions in respect of which VAT is deductible (see, to that effect, judgment in BLC Baumarkt , EU:C:2012:689, paragraph 23).
31. The principle of neutrality, which forms an integral part of the common system of VAT, requires that the method by which the deduction is calculated objectively reflects the actual share of the expenditure resulting from the acquisition of mixed use goods and services that may be attributed to transactions in respect of which VAT is deductible (see, to that effect, judgment in Securenta , C‑437/06, EU:C:2008:166, paragraph 37).
32. To that end, the Sixth Directive does not preclude Member States from using, for a given transaction, a method or formula other than the turnover-based method, provided that the method used guarantees a more precise determination of the deductible proportion of the input VAT than that arising from application of the turnover-based method (see, to that effect, judgment in BLC Baumarkt , EU:C:2012:689, paragraph 24).