Securenta Göttinger Immobilienanlagen und Vermögensmanagement AG v Finanzamt Göttingen.
Date: 2008-03-13
24. In order to reply to that question, it should first be recalled that the right to deduct is an integral part of the VAT scheme which in principle may not be limited and which must be exercised immediately in respect of all the taxes charged on transactions relating to inputs (see Case C‑62/93 BP Supergas  v Greek State  [1995] ECR I‑1883, paragraph 18, and Joined Cases C‑110/98 to C‑147/98 Gabalfrisa and Others v Agencia Estatal de Administración Tributaria  [2000] ECR I‑1577, paragraph 43).
25. The rules governing deduction introduced by the Sixth Directive are 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 consequently ensures complete neutrality of taxation of all economic activities, whatever their purpose or results (see Case 268/83 Rompelman  [1985] ECR 655, paragraph 19; Case C‑37/95 Ghent Coal Terminal  [1998] ECR I‑1, paragraph 15; and Case C‑223/03 University of Huddersfield  [2006] ECR I‑1751, paragraph 47).
26. It is apparent from the information supplied by the national court that Securenta carries out three types of activity: (i) non-economic activities, which do not fall within the scope of the Sixth Directive; (ii) economic activities, which as such fall within the scope of that directive but are exempt from VAT; and (iii) taxed economic activities. The question therefore arises, in that context, whether – and, if so, to what extent – such a taxable person has the right to deduct input VAT relating to expenditure which is not attributable to specific output transactions.
27. With regard to expenditure connected with the issue of shares or atypical silent partnerships, it should be noted that, in order for the input VAT paid in respect of such a transaction to give rise to a right to deduct, the expenditure incurred in that regard must be a component of the cost of the output transactions that gave rise to the right to deduct (see Case C‑408/98 Abbey National  [2001] ECR I‑1361, paragraph 28; Case C‑16/00 Cibo Participations  [2001] ECR I‑6663, paragraph 31; and Case C‑435/05 Investrand  [2007] ECR I‑1315, paragraph 23).
28. In those circumstances, the input VAT paid in relation to the expenditure connected with the issue of shares or atypical silent partnerships can give rise to the right to deduct only if the capital thus acquired was used in connection with the economic activities of the person concerned. The Court has held that the deductions scheme laid down by the Sixth Directive relates to all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT (see Gabalfrisa and Others , paragraph 44; Case C‑98/98 Midland Bank  [2000] ECR I‑4177, paragraph 19; and Abbey National , paragraph 24).
29. In the main proceedings, as the national court has observed, the expenditure connected with supplies of services carried out in the context of the issue of shares and financial holdings was not solely attributable to downstream economic activities carried out by Securenta and was not therefore among the elements which, alone, go to make up the cost of the transactions relating to those activities. If, however, that had been the case, the supplies of services concerned would have had a direct and immediate link with the taxpayer’s economic activities (see Abbey National , paragraphs 35 and 36, and Cibo Participations , paragraph 33). However, it is apparent from the documents before the Court that the costs incurred by Securenta for the financial transactions at issue in the main proceedings were, at least in part, for the performance of non-economic activities.
30. To the extent that input VAT relating to expenditure incurred by a taxpayer is connected with activities which, in view of their non-economic nature, do not fall within the scope of the Sixth Directive, it cannot give rise to a right to deduct.
31. The answer to the first question must therefore be that, where a taxpayer simultaneously carries out economic activities, taxed or exempt, and non-economic activities outside the scope of the Sixth Directive, deduction of the VAT relating to expenditure connected with the issue of shares and atypical silent partnerships is allowed only to the extent that that expenditure is attributable to the taxpayer’s economic activity within the meaning of Article 2(1) of that directive.
The second question
33. In order to reply to that question, it should be noted that the provisions of the Sixth Directive do not include rules relating to the methods or criteria which the Member States are required to apply when adopting provisions permitting the apportionment of input VAT paid according to whether the relevant expenditure relates to economic activities or to non-economic activities. As the Commission has noted, the rules set out in Articles 17(5) and 19 of the Sixth Directive relate to input VAT on expenditure connected exclusively with economic activities, and distinguish between economic activities which are taxed and give rise to the right to deduct and those which are exempt and do not give rise to such a right.
34. In those circumstances, and so that taxpayers can make the necessary calculations, it is for the Member States to establish methods and criteria appropriate to that aim and consistent with the principles underlying the common system of VAT.
35. In that regard, the Court has held that, where the Sixth Directive does not contain the guidance necessary for such precise calculations, the Member States are required to exercise that power, having regard to the aims and broad logic of the Directive (see, to that effect, Case C‑72/05 Wollny  [2006] ECR I‑8297, paragraph 28).
36. In particular, and as the Advocate General noted in point 47 of his Opinion, the measures which the Member States are required to adopt in that regard must comply with the principle of fiscal neutrality on which the common system of VAT is based.
37. Accordingly, the Member States must exercise their discretion in such a way as to ensure that deduction is made only for that part of the VAT proportional to the amount relating to transactions giving rise to the right to deduct. They must therefore ensure that the calculation of the proportion of economic activities to non-economic activities objectively reflects the part of the input expenditure actually to be attributed, respectively, to those two types of activity.
38. It is appropriate to add that, when exercising that discretion, the Member States have the right to apply, as necessary, an investment formula or a transaction formula or any other appropriate formula, without being required to restrict themselves to only one of those methods.
39. The answer to the second question must therefore be that the determination of the methods and criteria for apportioning input VAT between economic and non-economic activities within the meaning of the Sixth Directive is in the discretion of the Member States who, when exercising that discretion, must have regard to the aims and broad logic of the Directive and, on that basis, provide for a method of calculation which objectively reflects the part of the input expenditure actually to be attributed, respectively, to those two types of activity.
Costs