Valsts ieņēmumu dienests v SIA „Altic”.
Date: 2019-10-03
26


First, it must be borne in mind that, in accordance with the settled case-law of the Court, the right of taxable persons to deduct from the VAT that they are liable to pay the VAT due or paid on goods purchased and services received by them as inputs is a fundamental principle of the common system of VAT. The deduction system is intended to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities, provided that his activities are themselves subject, in principle, to VAT (see, to that effect, judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraphs 35 and 37 and the case-law cited).
27


The right of deduction is an integral part of the VAT mechanism and cannot, in principle, be limited if the material and formal requirements or conditions to which this right is subject are respected by taxable persons wishing to exercise it (see, to that effect, judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraphs 36 and 38 and the case-law cited).
28


In addition to those requirements or material and formal conditions, which derive from Article 168(a) and Article 178(a) of Directive 2006/112 (see, to that effect, judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraphs 39 and 40), Article 273 of that directive allows the Member States, subject to certain conditions, to impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent fraud.
29


Second, it must also be borne in mind that the prevention of tax evasion, tax avoidance and potential abuse is an objective recognised and promoted by Directive 2006/112. The Court has held that EU law cannot be relied on by individuals for abusive or fraudulent ends. Accordingly, it is for the national courts and authorities to refuse the right of deduction, if it is shown, in the light of objective evidence, that that right is being relied on for fraudulent or abusive ends (judgment of 13 March 2014, FIRIN, C‑107/13, EU:C:2014:151, paragraph 40 and the case-law cited).
30


If that is the case where tax evasion is committed by the taxable person himself, it is also the case where a taxable person knew or should have known that, by his acquisition, he was involved in a transaction involving VAT fraud (judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 48 and the case-law cited).
31


It is for the tax authorities, having found fraud or irregularities committed by the issuer of the invoice in question, to establish, in the light of objective factors and without requiring the addressee of that invoice to carry out checks which are not his responsibility, that the addressee knew or should have known that the transaction relied on to establish the right of deduction was involved in VAT fraud (judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 50 and the case-law cited).
32


As regards the level of diligence required of a taxable person wishing to exercise his right to deduct VAT, the Court has held that traders who take every precaution which could reasonably be required of them to ensure that their transactions are not connected with fraud, be it the fraudulent evasion of VAT or other fraud, must be able to rely on the legality of those transactions without the risk of losing their right to deduct the input VAT, the determination of the measures which may, in a particular case, reasonably be required of a taxable person to that end depending essentially on the circumstances of that particular case (see, to that effect, judgments of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraphs 53 and 59, and of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 51).
45


However, as pointed out in paragraph 31 of this judgment, where tax authorities, having found fraud or irregularities committed by the issuer of the invoice in question, seek to establish that the addressee of that invoice knew or should have known that the transaction relied on to establish the right of deduction was involved in VAT fraud, they may not require that addressee to carry out checks which are not his responsibility (see, to that effect, judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 50).
46


In that context, the Court has previously held that tax authorities cannot require the taxable person wishing to exercise the right to deduct VAT to produce documents issued by his supplier of bovine animals mentioning the eartags of the animals subject to the identification and registration system established by Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products and repealing Council Regulation (EC) No 820/97 (OJ 2000 L 204, p. 1) (see, to that effect, judgment of 18 July 2013, Evita-K, C‑78/12, EU:C:2013:486, paragraph 42).