Commissioners for Her Majesty’s Revenue & Customs v GMAC UK plc.
Date: 2014-09-03
29. It should be recalled that, according to settled case-law of the Court, whenever the provisions of a directive appear, so far as their subject-matter is concerned, to be unconditional and sufficiently precise, they may be relied upon before the national courts by individuals against the State where the latter has failed to implement the directive in domestic law by the end of the period prescribed or where it has failed to implement the directive correctly (judgment in Almos Agrárkülkereskedelmi , C‑337/13, EU:C:2014:328, paragraph 31 and the case-law cited).
30. A provision of EU law is unconditional where it sets forth an obligation which is not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the European Union or by the Member States (judgment in Almos Agrárkülkereskedelmi , EU:C:2014:328, paragraph 32 and the case-law cited).
31. The first subparagraph of Article 11C(1) of the Sixth Directive defines the cases in which the Member States are required to ensure that the taxable amount is reduced accordingly, under conditions which are to be determined by the Member States themselves. That provision thus requires the Member States to reduce the taxable amount whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person (judgment in Goldsmiths , C‑330/95, EU:C:1997:339, paragraph 16).
32. Although that provision thus allows the Member States a certain degree of discretion when adopting the measures to determine the amount of the reduction, that does not alter the precise and unconditional nature of the obligation to allow the reduction in the taxable amount in the cases referred to by that provision. It therefore fulfils the conditions for it to have direct effect (judgment in Almos Agrárkülkereskedelmi , EU:C:2014:328, paragraph 34).
37. It is true that that provision embodies one of the fundamental principles of the Sixth Directive, according to which the taxable amount is the consideration actually received and the corollary of which is that the tax authorities may not charge an amount of VAT exceeding the tax paid to the taxable person (judgment in Almos Agrárkülkereskedelmi , EU:C:2014:328, paragraph 22 and the case-law cited).
39. It is appropriate in this regard to recall the Court’s settled case-law, according to which a Member State which has not adopted the implementing measures required by a directive within the prescribed period may not plead, as against individuals, its own failure to perform the obligations which the directive entails (see, inter alia, judgment in Rieser Internationale Transporte , C‑157/02, EU:C:2004:76, paragraph 22 and the case-law cited).
41. It should also be observed that, according to the fundamental principle which underlies the common system of VAT and which follows from Article 2 of First Council Directive 67/227/EEC of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes (OJ, English Special Edition 1967(I), p. 14) and Article 2 of the Sixth Directive, VAT applies to each transaction by way of production or distribution after deduction of the VAT borne directly by the various cost components (see, inter alia, judgments in Midland Bank , C‑98/98, EU:C:2000:300, paragraph 29, and Zita Modes , C‑497/01, EU:C:2003:644, paragraph 37).
45. It should be noted that, in that regard, the Court, at paragraphs 74 and 75 of the judgment in Halifax and Others (C‑255/02, EU:C:2006:121), held, in particular, that, in the sphere of VAT, an abusive practice can be found to exist only if, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the Sixth Directive and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions and, second, it is apparent from a number of objective factors that the essential aim of the transactions concerned is solely to obtain that tax advantage.
46. It is for the national court to verify, in accordance with the rules of evidence of national law, provided that the effectiveness of EU law is not undermined, whether action constituting an abusive practice has taken place in the case in the main proceedings. However, the Court, when giving a preliminary ruling, may, where appropriate, provide clarification designed to give the national court guidance in its interpretation (see, inter alia, judgment in Halifax and Others , EU:C:2006:121, paragraphs 76 and 77 and the case-law cited).
48. Moreover, the Court has held that a trader’s choice between exempt transactions and taxable transactions may be based on a range of factors, including tax considerations relating to the neutral system of VAT. Where it is possible for the taxable person to choose from among a number of transactions, he may choose to structure his business in such a way as to limit his tax liability (see judgment in RBS Deutschland Holdings , C‑277/09, EU:C:2010:810, paragraph 54 and the case-law cited).