Gábor Tóth v Nemzeti Adó- és Vámhivatal Észak-magyarországi Regionális Adó Főigazgatósága.
Date: 2012-09-06
23. According to 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 the relevant European Union legislation (see, inter alia, Case C-78/00 Commission  v Italy [2001] ECR I-8195, paragraph 28; Case C-25/07 Sosnowska  [2008] ECR I-5129, paragraph 14; and Joined Cases C-80/11 and C-142/11 Mahagében and Dávid [2012] ECR, paragraph 37).
24. As the Court has repeatedly held, the right to deduct provided for in Article 167 et seq. of Directive 2006/112 is an integral part of the VAT scheme and in principle may not be limited. In particular, the right to deduct is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, inter alia, Joined Cases C-110/98 to C-147/98 Gabalfrisa and Others  [2000] ECR I-1577, paragraph 43; Kittel and Recolta Recycling , paragraph 47; and Mahagében and Dávid , paragraph 38).
25. The deduction system is meant to relieve the trader 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 in principle to VAT (see, in particular, Gabalfrisa and Others , paragraph 44; Case C-255/02 Halifax and Others  [2006] ECR I-1609, paragraph 78; and Mahagében and Dávid , paragraph 39).
26. As regards the material conditions to be met for the right to deduct to arise, it is apparent from Article 168(a) of Directive 2006/112 that the goods and 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.
30. It follows that the concept of ‘taxable person’ is defined widely, on the basis of the factual circumstances. On the other hand, it is not apparent from Article 9(1) that the status of taxable person depends on any authorisation or licence granted by the authorities for the exercise of an economic activity.
31. The first subparagraph of Article 213(1) of the 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 VAT, it cannot constitute an additional condition to be met in order to have the status of a taxable person within the meaning of Article 9(1) of that directive, given that Article 213 appears in Chapter 2, entitled ‘Identification’, of Title XI of the directive.
32. Moreover, the Court has held that any failure by the service provider to meet the requirement to state when taxable activity commences cannot call in question the right of deduction to which the recipient of services supplied is entitled in respect of the VAT paid for those services. Accordingly, that recipient has a right to deduct even if the service provider is a taxable person who is not registered for VAT, where the invoices relating to the services supplied contain all the information required by Article 226 of Directive 2006/112, in particular the information needed to identify the person who drew up those invoices and to ascertain the nature of the services provided (see Case C-438/09 Dankowski [2010] ECR I-14009, paragraphs 33, 36 and 38).
33. It follows that the tax authorities cannot refuse the right to deduct on the ground that the issuer of the invoice no longer has a 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 required by Article 226 of Directive 2006/112.
37. In that judgment, the Court based its decision, first, on the principles governing the right to deduct and, second, on the case-law concerning the refusal to grant rights which are relied on fraudulently or abusively ( Mahagében and Dávid , paragraphs 37 to 42 and 46 to 48).
38. The Court concluded, on that basis, that Directive 2006/112 precludes a national practice whereby the tax authority refuses a taxable person the right to deduct VAT on the ground that the issuer of the invoice relating to the services supplied acted improperly, without that authority establishing, on the basis of objective evidence, that the taxable person concerned knew, or ought to have known, that the transaction relied on as a basis for the right to deduct was connected with fraud committed by the issuer of the invoice or by another trader acting earlier in the chain of supply ( Mahagében and Dávid , paragraph 50).
43. On that basis, the Court concluded that Directive 2006/112 precludes a national practice whereby the tax authority refuses the right to deduct on the ground that the taxable person did not satisfy himself that the issuer of the invoice relating to the goods in respect of which the exercise of the right to deduct is sought had the status of a taxable person, that he was in possession of the goods in question and was in a position to supply them, and that he had satisfied his obligations as regards declaration and payment of VAT, although the substantive and formal conditions laid down by Directive 2006/112 for exercising the right to deduct were fulfilled and the taxable person is not in possession of any material justifying the suspicion that irregularities or fraud have been committed within that invoice issuer’s sphere of activity ( Mahagében and Dávid , paragraph 66).
52. That conclusion is borne out by the judgment in Case C-271/06 Netto Supermarkt [2008] ECR I-771, paragraphs 27 and 29, concerning VAT exemption for supplies of goods for export to a destination outside the European Union, in which the Court held that a supplier must be able to rely on the lawfulness of the transaction that he carries out without risking the loss of his right to exemption from VAT, if he is in no position to recognise – even by exercising due commercial care – that the conditions for the exemption were in fact not met, because the export proofs provided by the purchaser had been forged.