Stroy trans EOOD v Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ — Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite.
Date: 2013-01-31
29. The Court has held in relation to the provision that was the predecessor of Article 203 of Directive 2006/112, namely Article 21(1)(c) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 91/680/EEC of 16 December 1991 (OJ 1991 L 376, p. 1), that, according to that provision, any person who mentions VAT on an invoice or other document serving as invoice is liable to pay that tax. In particular, those persons are liable to pay VAT mentioned on an invoice independently of any obligation to pay it on account of there being a transaction subject to VAT (see Case C-566/07 Stadeco  [2009] ECR I-5295, paragraph 26 and the case-law cited).
30. It is true that, in accordance with Articles 167 and 63 of Directive 2006/112, the right to deduct VAT invoiced is linked, as a general rule, to the actual performance of a taxable transaction (see Case C-536/03 António Jorge  [2005] ECR I-4463, paragraphs 24 and 25) and the exercise of that right does not extend to VAT which is payable, under Article 203 of the directive, solely because it is entered on the invoice (see, inter alia, Case C-342/87 Genius  [1989] ECR 4227, paragraphs 13 and 19, and Case C-35/05 Reemtsma Cigarettenfabriken  [2007] ECR I-2425, paragraph 23).
31. However, the risk of loss of tax revenue is not in principle completely eliminated as long as the recipient of an invoice incorrectly showing VAT could still use it for the purposes of such deduction under Article 178(a) of Directive 2006/112 (see, to that effect, Stadeco , paragraph 29).
32. Accordingly, the obligation under Article 203 of that directive seeks to eliminate the risk of loss of tax revenue which the right of deduction provided for in Article 167 et seq. of the directive might entail (see Stadeco , paragraph 28).
33. Having regard to that objective, the aforesaid obligation is limited by the possibility, to be provided for by the Member States in their national legal systems, of correcting any tax improperly invoiced where the issuer of the invoice shows that he acted in good faith or where he has, in sufficient time, wholly eliminated the risk of any loss of tax revenue (see, to that effect, Genius , paragraph 18; Case C-454/98 Schmeink & Cofreth and Strobel  [2000] ECR I-6973, paragraphs 56 to 61 and 63; and Joined Cases C-78/02 to C-80/02 Karageorgou and Others  [2003] ECR I-13295, paragraph 50).
38. In the light of the foregoing, the answer to the first question is that Article 203 of Directive 2006/112 must be interpreted as meaning that:
– the VAT entered by a person on an invoice is payable by him regardless of whether a taxable transaction actually exists;
– it cannot be inferred from the mere fact that the tax authorities did not correct, in a tax adjustment notice addressed to the issuer of that invoice, the VAT declared by the latter that those authorities have acknowledged that the invoice corresponded to an actual taxable transaction.
Question 2
43. In such a situation, compliance with the principle of fiscal neutrality is ensured by the possibility, to be provided for by the Member States and noted in paragraph 33 above, of correcting any tax improperly invoiced where the issuer of the invoice shows that he acted in good faith or where he has, in sufficient time, wholly eliminated the risk of any loss of tax revenue.
45. As is apparent from the order for reference, in the main proceedings the tax authorities inferred that there was no taxable supply from, in particular, the fact that the supplier, or the latter’s suppliers, did not submit all the documents required during a tax audit. Since that conclusion is contested by the claimant, it is for the national court to verify it, by carrying out, in accordance with the rules of evidence of national law, an overall assessment of all the facts and circumstances of the case (see, by analogy, Case C-273/11 Mecsek-Gabona  [2012] ECR, paragraph 53, and Case C-285/11 Bonik  [2012] ECR, paragraph 32).
46. In this connection, it is true that preventing possible tax evasion, avoidance and abuse is an objective recognised and encouraged by Directive 2006/112 and European Union law cannot be relied on for fraudulent or abusive ends (see, inter alia, Case C-255/02 Halifax and Others  [2006] ECR I-1609, paragraphs 68 and 71; Joined Cases C-80/11 and C-142/11 Mahagében and Dávid  [2012] ECR, paragraph 41; and Bonik , paragraphs 35 and 36).
47. It is therefore incumbent upon the national authorities and courts to refuse the right of deduction where it is established, on the basis of objective evidence, that that right is being relied on for fraudulent or abusive ends (see, to that effect, Joined Cases C-439/04 and C-440/04 Kittel and Recolta Recycling  [2006] ECR I-6161, paragraph 55; Mahagében and Dávid , paragraph 42; and Bonik , paragraph 37).
48. Nevertheless, according to case-law that is also well-established, it is incompatible with the rules governing the right of deduction under Directive 2006/112 to impose a penalty, in the form of refusal of that right, on a taxable person who did not know, and could not have known, that the transaction concerned was connected with fraud committed by the supplier, or that another transaction forming part of the chain of supply prior or subsequent to the transaction carried out by the taxable person was vitiated by VAT fraud (see, inter alia, Joined Cases C-354/03, C-355/03 and C-484/03 Optigen and Others  [2006] ECR I-483, paragraphs 52 and 55; Kittel and Recolta Recycling , paragraphs 45, 46 and 60; Mahagében and Dávid , paragraph 47; and Bonik , paragraph 41).
49. Furthermore, the Court held in Mahagében and Dávid , paragraphs 61 to 65, that the tax authorities cannot, as a general rule, require the taxable person wishing to exercise the right to deduct VAT, first, to ensure that the issuer of the invoice relating to the goods and services in respect of which the exercise of that right is sought has the capacity of a taxable person, that he was in possession of the goods at issue and was in a position to supply them and that he has satisfied his obligations as regards declaration and payment of VAT, in order to be satisfied that there are no irregularities or fraud at the level of the traders upstream, or, second, to be in possession of documents in that regard.
50. It follows that a national court which is called upon to decide whether, in a particular case, there was no taxable transaction, and before which the tax authorities have relied in particular on irregularities committed by the issuer of the invoice or one of the issuer’s suppliers, such as omissions in the accounts, must ensure that the assessment of the evidence does not result in the case-law recalled in paragraph 48 above being rendered meaningless and in the recipient of the invoice being indirectly obliged to carry out checks of the other party to the contract which, in principle, are not a matter for him.