Finanzamt Sulingen v Walter Sudholz.
Date: 2004-04-29
33. In that regard, it should be pointed out that in general the principle of legal certainty precludes a Community measure from taking effect from a point in time before its publication. It may exceptionally be otherwise where the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (Case 98/78 Racke [1979] ECR 69, paragraph 20, and Case C‑110/97 Netherlands v Council [2001] ECR I-8763, paragraph 151).
34. Moreover, as the Court has repeatedly held, Community legislation must be certain and its application foreseeable by those subject to it (Case C-301/97 Netherlands v Council [2001] ECR I-8853, paragraph 43). That requirement of legal certainty must be observed all the more strictly in the case of rules liable to entail financial consequences, in order that those concerned may know precisely the extent of the obligations which they impose on them (see Case 326/85 Netherlands v Commission [1987] ECR 5091, paragraph 24).
37. With respect to the legitimate expectations of those concerned, such as Mr Sudholz, it must be pointed out that if the taxable person chooses to treat goods used both for business and private purposes as business goods, the VAT due as input tax on the acquisition of those goods is in principle wholly and immediately deductible (see, inter alia, Case C‑97/90 Lennartz [1991] ECR I-3795, paragraph 26, and Case C-269/00 Seeling [2003] ECR I-4101, paragraph 41). In the absence of any provision empowering the Member States to limit the right to deduct, that right must be exercised immediately in respect of all the taxes charged on transactions relating to inputs (see, inter alia, Lennartz , paragraph 27, and Case C‑37/95 Ghent Coal Terminal [1998] ECR I-1, paragraph 16).
40. Inasmuch as Article 3 of Decision 2000/186 provides for the retroactive application of Paragraph 15(1b) of the UStG, it is clear that it authorises the introduction of a national law which may infringe the legitimate expectations of those concerned. The Court has already held that a national legislative amendment retroactively depriving a taxable person of a right to deduct which he has derived from the Sixth Directive is incompatible with the principle of the protection of legitimate expectations (Case C-62/00 Marks & Spencer [2002] ECR I-6325, paragraph 45).
45. Since Decision 2000/186 authorises a measure which derogates from the general principle that VAT is deductible, a strict approach is required to the question of its compatibility with the conditions laid down under Article 27(1) of the Sixth Directive (see, inter alia, Case C‑63/96 Skripalle [1997] ECR I-2847, paragraph 24).
46. In order to do so, it is necessary to determine whether the flat-rate limit on permitted deductions, set at 50% of the amount paid by way of input VAT, could be considered necessary and appropriate for the attainment of the objectives which Decision 2000/186 pursues and as least likely to affect the objectives and principles of the Sixth Directive (see Joined Cases C-177/99 and C‑181/99 Ampafrance and Sanofi [2000] ECR I‑7013, paragraph 43).
52. It must also be noted that in paragraph 62 of the judgment in Ampafrance and Sanofi the Court reserves its position on the question whether other possible methods of preventing tax evasion and avoidance may exist, including imposing a flat‑rate limit on authorised deductions, without commenting on their validity.
62. Indeed, it must be accepted that a simplification measure implies, by definition, a more general approach than that of the rule which it replaces and thus will not necessarily reflect the exact situation of each taxable person.