Idexx Laboratories Italia Srl v Agenzia delle Entrate.
Date: 2014-12-11
30. According to the Court’s settled case-law, the right of taxable persons to deduct the VAT due or already paid on goods purchased 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 in Tóth , C‑324/11, EU:C:2012:549, paragraph 23 and the case-law cited).
31. As the Court has repeatedly held, that right is an integral part of the VAT scheme and in principle may not be limited. In particular, it is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, to that effect, judgment in Tóth , EU:C:2012:549, paragraph 24 and the case-law cited).
32. The deduction system thus established is meant to relieve the taxable person entirely of the burden of the VAT payable or paid in the course of all his economic activities. The common system of VAT consequently ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject to VAT (judgments in Tóth , EU:C:2012:549, paragraph 25 and the case-law cited, and Fatorie , C‑424/12, EU:C:2014:50, paragraph 31 and the case-law cited).
38. Thirdly, it is apparent from paragraph 63 of the judgment in Ecotrade (EU:C:2008:267) and from the Court’s subsequent case-law (see, inter alia, judgments in Uszodaépítő , C‑392/09, EU:C:2010:569, paragraph 39; Nidera Handelscompagnie , C‑385/09, EU:C:2010:627, paragraph 42; EMS-Bulgaria Transport , C‑284/11, EU:C:2012:458, paragraph 62; and Fatorie , EU:C:2014:50, paragraph 35) that, in the context of the reverse charge procedure, the fundamental principle of fiscal neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements.
39. The position may be different if non-compliance with such formal requirements effectively prevents the production of conclusive evidence that the substantive requirements have been satisfied (judgment in EMS-Bulgaria Transport , EU:C:2012:458, paragraph 71 and the case-law cited).
40. Consequently, where the tax authority has the information necessary to establish that the substantive requirements have been satisfied, it cannot, in relation to the right of that taxable person to deduct that tax, impose additional conditions which may have the effect of rendering that right ineffective for practical purposes (see, to that effect, judgment in EMS-Bulgaria Transport , EU:C:2012:458, paragraph 62 and the case-law cited).
41. In that regard, it must be stated that the substantive requirements for the right to deduct are those which govern the actual substance and scope of that right, as provided for in Article 17 of the Sixth Directive, entitled ‘Origin and scope of the right to deduct’ (see, to that effect, judgments in Commission  v Netherlands , C‑338/98, EU:C:2001:596, paragraph 71; Dankowski , C‑438/09, EU:C:2010:818, paragraphs 26 and 33; Commission  v Hungary , C‑274/10, EU:C:2011:530, paragraph 44; and Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz , C‑280/10, EU:C:2012:107, paragraphs 43 and 44).
42. The formal requirements for that right, by contrast, regulate the rules governing its exercise and monitoring thereof and the smooth functioning of the VAT system, such as the obligations relating to accounts, invoicing and filing returns. Those requirements are set out in Articles 18 and 22 of the Sixth Directive (see, to that effect, judgments in Commission  v Netherlands , EU:C:2001:596, paragraph 71; Collée , EU:C:2007:549, paragraphs 25 and 26; Ecotrade , EU:C:2008:267, paragraphs 60 to 65; Nidera Handelscompagnie , EU:C:2010:627, paragraphs 47 to 51; Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz , EU:C:2012:107, paragraphs 41 and 48; and Tóth , EU:C:2012:549, paragraph 33).
44. It is apparent from the order for reference that, in the case in the main proceedings, the Agenzia had all the information necessary to establish that those substantive requirements had been satisfied.
45. Accordingly, it follows from all of the foregoing considerations that the right, referred to in Article 17(2)(d) of the Sixth Directive, to deduct the VAT payable in relation to the intra-Community acquisitions at issue in the main proceedings cannot be denied to Idexx on the ground that it did not satisfy the formal requirements laid down by national law in implementation of Article 18(1)(d) and Article 22 of the Sixth Directive That right to deduct arises, in accordance with Article 17(1) of that directive, at the time when the deductible tax becomes chargeable.