PPUH Stehcemp sp. j Florian Stefanek, Janina Stefanek, Jaroslaw Stefanek v Dyrektor Izby Skarbowej w Łodzi.
Date: 2015-10-22
23. The referring court questions the importance which the case-law of the Court attaches to the good faith of the taxable person in the context of the right to deduct VAT (see, inter alia, judgments in Optigen and Others , C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16; Kittel and Recolta Recycling , C‑439/04 and C‑440/04, EU:C:2006:446; Mahagében and Dávid , C‑80/11 and C‑142/11, EU:C:2012:373; Tóth , C‑324/11, EU:C:2012:549, and orders in Forvards V , C‑563/11, EU:C:2013:125, and in Jagiełło , C‑33/13, EU:C:2014:184). It takes the view that the good faith of the taxable person cannot give rise to a right to deduct VAT if the material conditions governing that right are not met. In particular, it is unsure whether the acquisition of goods can be classified as a supply of goods when the invoices relating to that transaction refer to a non-existent trader and it is impossible to determine the identity of the actual supplier of the goods at issue. A non-existent trader could not transfer the right to dispose of the goods as owner or receive payment. In those circumstances, the tax authorities would not have an enforceable tax claim, with the result that no tax would be due.
26. According to settled case-law, the right of deduction provided for in Article 17 et seq. of the Sixth Directive is a fundamental principle of the common system of VAT, which in principle may not be limited, and which is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, to that effect, judgments in Mahagében and Dávid , C‑80/11 and C‑142/11, EU:C:2012:373, paragraphs 37 and 38 and the case-law cited; Bonik , C‑285/11, EU:C:2012:774, paragraphs 25 and 26; and Petroma Transports and Others , C‑271/12, EU:C:2013:297, paragraph 22).
27. The deduction system is intended to relieve the trader entirely of the burden of the VAT due or paid in the course of all his economic activities. The common system of VAT therefore ensures that all economic activities, whatever their purpose or results, provided that they are, in principle, themselves subject to VAT, are taxed in a neutral way (see judgments in Dankowski , C‑438/09, EU:C:2010:818, paragraph 24; Tóth , C‑324/11, EU:C:2012:549, paragraph 25; and orders in Forvards V , C‑563/11, EU:C:2013:125, paragraph 27, and Jagiełło , C‑33/13, EU:C:2014:184, paragraph 25).
28. As regards the material conditions which must be met in order for the right to deduct to arise, it is apparent from the wording of Article 17(2)(a) of the Sixth Directive that, in order to be able to avail of that right, first, the interested party must be a taxable person within the meaning of that directive and, second, the goods or services relied on to give entitlement to that right must be used by the taxable person for the purposes of his own taxed output transactions, and that, as inputs, those goods or services must be supplied by another taxable person (see, to that effect, judgments in Centralan Property , C‑63/04, EU:C:2005:773, paragraph 52; Tóth , C‑324/11, EU:C:2012:549, paragraph 26, and Bonik , C‑285/11, EU:C:2012:774, paragraph 29; and order in Jagiełło , C‑33/13, EU:C:2014:184, paragraph 27).
29. With regard to the formal conditions governing the right of deduction, Article 18(1)(a) of the Sixth Directive provides that the taxable person must hold an invoice drawn up in accordance with Article 22(3) of that directive. Pursuant to Article 22(3)(b) of that directive, the invoice must mention distinctly, inter alia, the VAT identification number under which the taxable person made the supply, the full name and address of the taxable person and the quantity and nature of the goods supplied.
34. According to Article 4(1) and (2) of the Sixth Directive, a taxable person is any person who independently carries out any economic activity of producers and persons supplying services, whatever the purpose or results of that activity. It follows from this that the concept of ‘taxable person’ is defined widely, on the basis of the factual circumstances (see judgment in Tóth , C‑324/11, EU:C:2012:549, paragraph 30).
35. With regard to Finnet, it cannot be ruled out that such economic activity took place given the circumstances surrounding the fuel supplies at issue in the main proceedings. That conclusion is not called into question by the fact, noted by the referring court, that the dilapidated state of the building in which Finnet’s corporate seat is located did not allow any economic activity to take place, since such a finding does not mean that that activity could not be conducted in places other than the seat. In particular, when the economic activity in question involves supplies of goods made in the context of several successive sales, the first purchaser and reseller of those goods can simply order the first seller to transport the goods at issue directly to the second purchaser (see orders in Forvards V , C‑563/11, EU:C:2013:125, paragraphs 34, and in Jagiełło , C‑33/13, EU:C:2014:184, paragraph 32), without that first purchaser and reseller necessarily having at his disposal the warehousing and transport facilities which are indispensable for supplying the goods at issue.
37. In addition, Article 4(1) and (2) of the Sixth Directive does not indicate that the status of taxable person depends on any authorisation or licence granted by the authorities for the exercise of an economic activity (see, to that effect, judgment in Tóth , C‑324/11, EU:C:2012:549, paragraph 30).
38. It is true that Article 22(1)(a) of the Sixth Directive provides that every taxable person is to state when his activity as a taxable person commences, changes or ceases. However, despite the importance of that declaration for the smooth functioning of the VAT system, it cannot constitute an additional condition to be met in order for the status of a taxable person to be recognised within the meaning of Article 4 of that directive, given that Article 22 appears in Title XIII, entitled ‘Obligations of persons liable for payment’, of that directive (see, to that effect, judgment in Tóth , C‑324/11, EU:C:2012:549, paragraph 31).
40. In that context, the Court has also held that any failure by the supplier of goods to meet the requirement to state when taxable activity commences cannot call into question the right of deduction to which the recipient of goods supplied is entitled in respect of the VAT paid for those goods. Accordingly, that recipient has a right to deduct even if the supplier of the goods is a taxable person who is not registered for VAT, where the invoices relating to the services supplied contain all of the information required by Article 22(3)(b) of the Sixth Directive, in particular the information necessary to identify the person who drew up those invoices and to ascertain the nature of the goods provided (see, to that effect, judgments in Dankowski , C‑438/09, EU:C:2010:818, paragraphs 33, 36 and 38, and in Tóth , C‑324/11, EU:C:2012:549, paragraph 32).
41. The Court concluded from this that the tax authorities cannot refuse the right of deduction on the ground that the issuer of the invoice no longer has an individual business operator’s licence and that, accordingly, he no longer has the right to use his tax identification number, where that invoice contains all the information set out in Article 22(3)(b) of the Sixth Directive (see, to that effect, judgment in Tóth , C‑324/11, EU:C:2012:549, paragraph 33).
44. Since the concept of ‘supply of goods’ in Article 5(1) of the Sixth Directive does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner (see, inter alia, judgments in Shipping and Forwarding Enterprise Safe , C‑320/88, EU:C:1990:61, paragraph 7, and in Dixons Retail , C‑494/12, EU:C:2013:758, paragraph 20 and the case-law cited), the possibility that Finnet lacks the power legally to dispose of the goods at issue in the main proceedings cannot mean that a supply of those goods within the meaning of that provision did not take place, since those goods were in fact delivered to PPUH Stehcemp, which used them for the purposes of its taxed transactions.
45. In addition, the VAT which PPUH Stehcemp actually paid in respect of the fuel supplies at issue in the main proceedings, according to the information in the documents submitted to the Court, was also ‘due or paid’, within the meaning of Article 17(2)(a) of the Sixth Directive. It is settled case-law that VAT applies to each transaction by way of production or distribution after deduction of the VAT directly borne by the various cost components (see, inter alia, judgments in Optigen and Others , C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16, paragraph 54; Kittel and Recolta Recycling , C‑439/04 and C‑440/04, EU:C:2006:446, paragraph 49; and Bonik , C‑285/11, EU:C:2012:774, paragraph 28). Therefore, the question whether or not the supplier of the goods at issue in the main proceedings has paid the VAT due on those transactions to the public purse has no bearing on the right of the taxable person to deduct input VAT (see, to that effect, judgments in Optigen and Others , C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16, paragraph 54, and in Véleclair , C‑414/10, EU:C:2012:183, paragraph 25).
47. In that regard, it must be borne in mind that the prevention of tax evasion, avoidance and abuse is an objective recognised and encouraged by the Sixth Directive. It is therefore for the national courts and judicial authorities to refuse the right of deduction if it is shown, in the light of objective factors, that that right is being relied on for fraudulent or abusive ends (see judgments in Bonik , C‑285/11, EU:C:2012:774, paragraphs 35 and 37 and the case-law cited, and in Maks Pen , C‑18/13, EU:C:2014:69, paragraph 26).
48. Although that is the position where tax fraud is committed by the taxable person himself, it is also the case where a taxable person knew, or should have known, that, by his purchase, he was taking part in a transaction connected with VAT fraud. In such circumstances, the taxable person concerned must, for the purposes of the Sixth Directive, be regarded as a participant in such fraud, whether or not he profits from the resale of the goods or the use of the services in the context of the taxable transactions subsequently carried out by him (see judgments in Bonik , C‑285/11, EU:C:2012:774, paragraphs 38 and 39 and the case-law cited, and in Maks Pen , C‑18/13, EU:C:2014:69, paragraph 27).
49. By contrast, where the material and formal conditions laid down by the Sixth Directive for the creation and exercise of that right are met, it is incompatible with the rules governing the right to deduct under that directive to impose a penalty, in the form of refusing that right to 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 that transaction carried out by the taxable person was vitiated by VAT fraud (see, to that effect, judgments in Optigen and Others , C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16; paragraphs 51, 52 and 55; Kittel and Recolta Recycling , C‑439/04 and C‑440/04, EU:C:2006:446, paragraphs 44 to 46 and 60; and in Mahagében and Dávid , C‑80/11 and C‑142/11, EU:C:2012:373, paragraphs 44, 45 and 47).
50. It is for the tax authorities, having found fraud or irregularities committed by the issuer of the invoice, to establish, on the basis of objective factors and without requiring the recipient of the invoice to carry out checks which are not his responsibility, that that recipient knew, or should have known, that the transaction on which the right to deduct is based was connected with VAT fraud, this being a matter for the referring court to determine (see, to that effect, judgments in Bonik , C‑285/11, EU:C:2012:774, paragraph 45, and in LVK — 56 , C‑643/11, EU:C:2013:55, paragraph 64).
51. The determination of the measures which may, in a particular case, reasonably be required of a taxable person wishing to exercise the right to deduct VAT in order to satisfy himself that his transactions are not connected with fraud committed by a trader at an earlier stage of a transaction depends essentially on the circumstances of that particular case (see judgment in Mahagében and Dávid , C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 59, and order in Jagiełło , C‑33/13, EU:C:2014:184, paragraph 37).
52. Although such a taxable person could be obliged, when there are indications pointing to an infringement or fraud, to make enquiries about the trader from wh om he intends to purchase goods or services in order to ascertain the latter’s trustworthiness, the tax authorities cannot, however, as a general rule, require that taxable person, first, to ensure that the issuer of the invoice relating to the goods and services in respect of which the exercise of that right to deduct is sought was in possession of the goods at issue and was in a position to supply them and that he has complied with his obligations as regards the declaration and payment of VAT, in order to be satisfied that there are no irregularities or fraud at the level of the traders operating at an earlier stage of the transaction or, second, to be in possession of documents in that regard (see, to that effect, judgments in Mahagében and Dávid , C‑80/11 and C‑142/11, EU:C:2012:373, paragraphs 60 and 61; Stroy trans , C‑642/11, EU:C:2013:54, paragraph 49, and order in Jagiełło , C‑33/13, EU:C:2014:184, paragraphs 38 and 39).