SIA „Kuršu zeme' v Valsts ieņēmumu dienests.
Date: 2019-07-10
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According to settled case-law of the Court, the right of taxable persons to deduct the VAT due or already paid on goods acquired and services received as inputs from the VAT which they are liable to pay is a fundamental principle of the common system of VAT established by EU legislation (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 35 and the case-law cited).
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In this connection, the right to deduct provided for in Article 167 et seq. of the VAT Directive is an integral part of the VAT scheme and in principle may not be limited. In particular, the right of deduction is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (judgment of 19 October 2017, Paper Consult, C‑101/16, EU:C:2017:775, paragraph 36 and the case-law cited).
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That said, it must be borne in mind that the prevention of tax evasion, tax avoidance and abuse is an objective recognised and encouraged by the VAT Directive. European Union law cannot be relied on for abusive or fraudulent ends. It is therefore 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 February 2014, Maks Pen, C‑18/13, EU:C:2014:69, paragraph 26 and the case-law cited).
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The Court has held that, in the sphere of VAT, an abusive practice can be found to exist only if two conditions are satisfied, namely, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the VAT 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, secondly, it is apparent from a number of objective factors that the essential aim of the transactions concerned is solely to obtain that tax advantage (judgment of 17 December 2015, WebMindLicenses, C‑419/14, EU:C:2015:832, paragraph 36 and the case-law cited).
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As to the remainder, as regards the issue, which has not been addressed by the referring court, of ascertaining to which of the acquisitions of the chain at issue in the main proceedings the single intra-Community transport must be ascribed and which must, therefore, alone be classified as an intra-Community acquisition, it is for the referring court to carry out an overall assessment of all the specific circumstances of the individual case and to determine, in particular, when the transfer to Kuršu zeme of the right to dispose of the goods as an owner occurred (see, to that effect, judgment of 19 December 2018, AREX CZ, C‑414/17, EU:C:2018:1027, paragraphs 70 and 72). The classification as an intra-Community acquisition of one of the acquisitions of the chain at issue in the main proceedings and the extent of Kuršu zeme’s right to deduct VAT, or even its right to a VAT refund, will depend on the point at which that transfer is deemed to have taken place, namely whether before or after the intra-Community transport (see, to that effect, judgments of 21 February 2018, Kreuzmayr, C‑628/16, EU:C:2018:84, paragraphs 43 and 44, and of 11 April 2019, PORR Építési Kft., C‑691/17, EU:C:2019:327, paragraphs 30 and 42).
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Accordingly, if the final supply in a chain of successive supplies involving a single intra-Community transport is an intra-Community supply, the person ultimately acquiring the goods cannot deduct, from the VAT which he is liable to pay, the amount of VAT wrongly paid for goods which were supplied to him in the context of an exempted intra-Community supply on the sole basis of the incorrect invoice provided by the supplier (see, to that effect, judgment of 21 February 2018, Kreuzmayr, C‑628/16, EU:C:2018:84, paragraph 44).
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On the other hand, that person acquiring the goods could request the repayment of the tax unduly paid to the supplier which produced an incorrect invoice, in accordance with national law (judgment of 21 February 2018, Kreuzmayr, C‑628/16, EU:C:2018:84, paragraph 48 and the case-law cited). However, in a situation where the VAT has actually been paid to the Treasury by the supplier concerned, if the reimbursement of the VAT by the supplier to the person acquiring the goods is impossible or excessively difficult, including in the case of the insolvency of that supplier, the principle of effectiveness might require that the person concerned acquiring the goods be able to address its application for reimbursement to the tax authorities directly (see, to that effect, judgment of 11 April 2019, PORR Építési Kft., C‑691/17, EU:C:2019:327, paragraph 42 and the case-law cited).