„Wind Inovation 1“ EOOD v Direktor na Direktsia „Obzhalvane i danachno-osiguritelna praktika“ - Sofia.
Date: 2017-11-09
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In order to answer the questions put by the referring court, it should be recalled that, according to the case-law, the existence of an economic activity establishes, pursuant to Article 9(1) of the VAT Directive, the status of ‘taxable person’, to whom that directive gives the right to deduct (see, to that effect, judgment of 3 March 2005, Fini H, C‑32/03, EU:C:2005:128, paragraph 19).
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In accordance with consistent case-law, that right to deduct laid down in Article 168 of the VAT Directive forms an integral part of the VAT mechanism and in principle cannot be limited. It is exercisable immediately in respect of all the taxes charged on input transactions (judgments of 12 January 2006, Optigen and Others, C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16, paragraph 53, and of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 55).
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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 and ensures complete neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT (judgments of 22 February 2001, Abbey National, C‑408/98, EU:C:2001:110, paragraph 24, and of 3 March 2005, Fini H, C‑32/03, EU:C:2005:128, paragraph 25).
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It follows from Article 168 of the VAT Directive that, in so far as the taxable person, acting as such at the time when he acquires goods or receives services, uses those goods or services for the purposes of his taxed transactions, he is entitled to deduct the VAT paid or payable in respect of those goods or services (judgment of 14 September 2017, Iberdrola Inmobiliaria Real Estate Investments, C‑132/16, EU:C:2017:683, paragraph 27).
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The Court has made clear that Article 18(c) concerns the cessation of the taxable economic activity in general, without differentiating between the causes or the circumstances of that cessation, apart from the exception mentioned in the preceding paragraph, and that that provision consequently also covers the cessation of the taxable economic activity resulting from the removal of the taxable person from the VAT register (judgment of 8 May 2013, Marinov, C‑142/12, EU:C:2013:292, paragraphs 26 and 28).
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The Court has pointed out that the main objective of that Article 18(c) is to avoid a situation where the final consumption of goods on which the VAT became deductible is untaxed following the cessation of the taxable economic activity, regardless of the causes or circumstances of that cessation (judgment of 8 May 2013, Marinov, C‑142/12, EU:C:2013:292, paragraph 27).
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The Court has previously held that the question whether the VAT on an earlier or later sale of the goods concerned has or has not been paid to the public purse is irrelevant to the right of the taxable person to deduct input VAT (judgment of 12 January 2006, Optigen and Others, C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16, paragraph 54). As the Direktor claimed, requiring the company concerned to actually pay the VAT due constitutes, for that company, an obstacle to deduction of the input VAT, since it requires that company to commit funds and obliges the tax authorities to return those funds when it re-registers, whereas other traders who hold assets may use them for their economic activities without being required to make such payment.