Klub OOD v Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ — Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite.
Date: 2012-03-22
35. It should be recalled at the outset that the deduction system established by the VAT Directive is meant to relieve the operator entirely of the burden of the VAT paid or payable in the course of all his economic activities. Thus, the common system of VAT seeks to ensure complete neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject, in principle, to VAT (see, inter alia, Case 268/83 Rompelman  [1985] ECR 655, paragraph 19, and Case C‑118/11 Eon Aset Menidjmunt  [2012] ECR I‑0000, paragraph 43).
36. 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, uses the goods for the purposes of his taxable transactions, he is entitled to deduct the VAT paid or payable in respect of the goods (see, to that effect, Case C‑97/90 Lennartz  [1991] ECR I‑3795, paragraph 8, and Case C‑25/03 HE  [2005] ECR I‑3123, paragraph 43). In accordance with Articles 63 and 167 of the VAT Directive, the right to deduct arises at the time when the deductible tax becomes chargeable, namely when the goods are delivered (see, to that effect, Case C‑378/02 Waterschap Zeeuws Vlaanderen [2005] ECR I‑4685, paragraph 31).
37. Conversely, where the goods are not used for the purposes of the taxable person’s economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive but are used by him for private consumption, no right to deduct can arise (see, to that effect, Lennartz , paragraph 9, and HE , paragraph 43).
38. In the case of a transaction consisting in the acquisition of capital goods intended partly for private use and partly for business use, the taxable person may choose to allocate the goods entirely to the assets of the business (see, to that effect, Case C‑291/92 Armbrecht  [1995] ECR I‑2775, paragraph 20, and Case C‑434/03 Charles and Charles-Tijmens  [2005] ECR I‑7037, paragraph 23 and the case-law cited). In principle, the input VAT due on the acquisition of those goods is then fully deductible. In those circumstances, where capital goods allocated to the business have created an entitlement to full or partial deduction of the input VAT paid, their use for the private purposes of the taxable person or of his staff or for purposes other than those of his business is treated as a supply of services for consideration, pursuant to Article 26(1) of the VAT Directive (see Charles and Charles-Tijmens , paragraphs 24 and 25 and the case-law cited; Case C‑460/07 Puffer  [2009] ECR I‑3251, paragraph 41; and Eon Aset Menidjmunt , paragraph 54).
39. Thus it is the acquisition of the goods by a taxable person acting as such that determines the application of the VAT system and therefore of the deduction mechanism (see, to that effect, Lennartz , paragraph 15, and Eon Aset Menidjmunt , paragraph 57).
40. A taxable person acts as such where he acts for the purposes of his economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive (see, to that effect, Case C‑415/98 Bakcsi  [2001] ECR I‑1831, paragraph 29).
41. Whether a taxable person acts as such is a question of fact which must be assessed in the light of all the circumstances of the case, including the nature of the asset concerned and the period between the acquisition of the asset and its use for the purposes of the taxable person’s economic activity (see, to that effect, Bakcsi , paragraph 29, and Eon Aset Menidjmunt , paragraph 58). It may also be taken into consideration whether active steps such as those mentioned in Article 38(3) of the ZUT have been taken to carry out the alterations and obtain the authorisations needed for business use of the asset.
42. If the taxable person were denied deduction of input VAT payable for subsequent taxable business uses, despite his initial wish to allocate the capital goods in their entirety to his business, with future transactions in mind, he would not be relieved entirely of the burden of the tax relating to the asset which he uses for the purposes of his economic activity and the taxation of his business activities would lead to double taxation contrary to the principle of fiscal neutrality inherent in the common system of VAT (see, to that effect, Puffer , paragraphs 45 and 46).
43. The principle of the neutrality of VAT with regard to the taxation of the business requires that the investment expenditure incurred for the needs and objectives of a business be regarded as economic activity giving rise to an immediate right of deduction of the input VAT due (see, to that effect, Rompelman , paragraph 22, and Puffer , point 47).
44. Consequently, an individual who acquires goods for the purposes of an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive does so as a taxable person even if the goods are not used immediately for that economic activity (see, to that effect, Lennartz , paragraph 14).
46. It should be added that, in the absence of fraud or abuse, and subject to any adjustments which may be made in accordance with the conditions laid down by the VAT Directive, the right of deduction, once it has arisen, is retained (see, to that effect, Case C‑400/98 Breitsohl  [2000] ECR I‑4321, paragraph 41, and Case C‑255/02 Halifax and Others  [2006] ECR I‑1609, paragraph 84).
47. As the Court has held in this respect, where the taxable person has been unable to use the goods or services which gave rise to a deduction in the context of taxable transactions by reason of circumstances beyond his control, the right of deduction is retained since, in such a case, there is no risk of fraud or abuse capable of justifying subsequent repayment of the sums deducted (Case C‑396/98 Schloßstrasse  [2000] ECR I‑4279, paragraph 42).
48. On the other hand, in situations of fraud or abuse in which the taxable person pretended that he wished to pursue a particular economic activity but in fact sought to acquire as his private assets goods in respect of which a deduction could be made, the tax authorities may claim, with retroactive effect, repayment of the sums deducted, since those deductions were made on the basis of false statements (see Schloßstrasse , paragraph 40 and the case-law cited).
49. It may be recalled that a finding of abuse requires two conditions to be satisfied. 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, must result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions. Secondly, it must be apparent from a number of objective factors that the essential aim of the transaction concerned is to obtain a tax advantage (see, to that effect, Halifax and Others , paragraphs 74 and 75).
50. The measures which the Member States may adopt under Article 273 of the VAT Directive to ensure the correct collection of VAT and to prevent evasion must not go further than is necessary to attain those objectives and must not undermine the neutrality of VAT (see Case C‑385/09 Nidera Handelscompagnie  [2010] ECR I‑0000, paragraph 49).
54. It must be recalled that under Article 267 TFEU the Court has no power to apply rules of European Union law to a particular case, but only to rule on the interpretation of the Treaties and of acts adopted by the institutions of the European Union (see, to that effect, Case C‑203/99 Veedfald  [2001] ECR I‑3569, paragraph 31, and Case C‑54/07 Feryn  [2008] ECR I‑5187, paragraph 19).