Société financière d'investissements SPRL (SFI) v Belgian State.
Date: 1998-11-19
22 By its first question, the national court is essentially asking whether Articles 4 and 10 of the Sixth Directive preclude a national practice which, in the case of transactions subject to VAT effected by a company before it was registered for VAT, consists in fixing the starting-point of the limitation period for recovery of that tax at the 20th of the month following the quarter in which that registration took place.
23 The first point to be made is that Article 4 of the Sixth Directive defines `a taxable person'.  Article 10, as the heading above it indicates, concerns the chargeable event and the `chargeability of tax'.  That provision enables the date on which the tax debt arises to be determined.
24 As for Article 22, paragraph 4 thereof governs the submission of returns by taxable persons, in particular the periods for which they are submitted and their content, whilst paragraph 5 provides that the amount of the tax must be paid by the taxable person when submitting the return, unless provision has been made for a different payment date or for the levying of interim payments.
25 Thus, none of those provisions determines the point in time from which the limitation period for the recovery of VAT begins to run.  Nor, moreover, does examination of the Sixth Directive reveal any other provision concerning this question.
26 It has been consistently held that, in the absence of Community rules governing a matter, it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from the direct effect of Community law, provided that those rules are not less favourable than those governing similar domestic actions nor arranged in such a way as to render it virtually impossible or excessively difficult to exercise rights conferred by Community law (see, in particular, the judgment in Case C-312/93 Peterbroeck and Others v Belgian State [1995] ECR I-4599, paragraph 12).
27 It is undisputed that those two conditions are met in this case.
28 SFI, however, argues that the practice of the Belgian administration infringes the principle of equality since a taxable person may exercise his right to deduct VAT only within a period of five years from the date on which that right arose, that is to say from the date on which the tax is due, whereas the five-year limitation period begins to run as against the tax authorities on the date on which the return should, in principle, be made.
29 On that point, it should be recalled first of all that, where national rules fall within the scope of Community law, and reference is made to the Court for a preliminary ruling, the Court must provide all the criteria of interpretation needed by the national court to determine whether those rules are compatible with the fundamental rights the observance of which the Court ensures (Case C-260/89 ERT v Dimotiki Etairia Pliroforissis [1991] ECR I-2925, paragraph 42).
30 Next, the Court has consistently held that the principle of equality is one of the fundamental principles of Community law and requires that similar situations should not be treated differently unless differentiation is objectively justified (Case 215/85 Bundesanstalt für Landwirtschaftliche Marktordnung v Raiffeisen Hauptgenossenschaft [1987] ECR 1279, paragraph 23).
31 As far as the present case is concerned, VAT is incontestably a matter governed by Community law.  The fact that, in the absence of Community rules, the Member States are entitled to apply their own procedural rules, does not alter that finding.
32 However, the position of the VAT authorities cannot be compared with that of a taxable person.  The authorities do not have the information necessary to determine the amount of the tax chargeable and the deductions to be made until, at the earliest, the day when the return referred to in Article 22(4) of the Sixth Directive is made, which in this case corresponds to the 20th of the month following the quarter in which VAT registration took place.  In the case of an inaccurate return, or where it turns out to be incomplete, it is therefore only from that time that the authorities can start to recover the unpaid tax.
33 Thus, the fact that the five-year limitation period begins to run as against the tax authorities on the date on which the return should in principle be made, whereas an individual may exercise his right to deduction only within a period of five years as from the date on which that right arose is not such as to infringe the principle of equality.
34 SFI also argues that the position of the Belgian authorities is a source of legal uncertainty.
35 That argument cannot be accepted.  As the Advocate General rightly points out at paragraph 16 of his Opinion, by taking as the starting-point of relations between the tax authorities and the taxable person the date on which the authorities take official notice of the declaration of commencement of activity referred to in Article 22(1) of the Sixth Directive, the national legislation in question takes the requirement of legal certainty into account, since, once registered, the taxable person can no longer be in any doubt as to the period he has in which to perform his periodic obligations or, consequently, as to the limitation period which he may enjoy.
36 It follows from the foregoing that Articles 4 and 10 of the Sixth Directive do not preclude a national practice which, in the case of transactions subject to VAT effected by a company before it was registered for VAT, consists in fixing the starting-point of the limitation period for the recovery of that tax at the 20th of the month following the quarter in which that registration took place.
The second question
38 In answering that question, it is sufficient to note that the common system of VAT established by the First Directive on the basis of Articles 99 and 100 of the EEC Treaty consists, by virtue of the first paragraph of Article 2 of that directive, in the application to goods and services up to and including the retail stage of a general tax on consumption which is exactly proportional to the price of the goods and services, irrespective of the number of transactions which take place in the production and distribution process before the stage at which the tax is charged. However, as the second paragraph of that provision states, VAT is chargeable on each transaction only after deduction of the amount of VAT borne directly by the cost of the various price components. The procedure for deduction is so arranged by Article 17(2) of the Sixth Directive that only taxable persons are authorised to deduct from the VAT for which they are liable the VAT which the goods have already borne (Case 15/81 Schul v Inspecteur der Invoerrechten en Accijnzen [1982] ECR 1409, paragraph 10).