Equoland Soc. coop. arl v Agenzia delle Dogane — Ufficio delle Dogane di Livorno.
Date: 2014-07-17
27. It must be added, however, that when exercising the powers thus vested in them, the Member States must comply with EU law and its general principles and, consequently, the principle of proportionality (see judgment in Rēdlihs , C‑263/11, EU:C:2012:497, paragraph 44 and the case-law cited).
34. Such penalties must not, however, go further than is necessary to attain those objectives (see, to that effect, judgments in Ecotrade , C‑95/07 and C‑96/07, EU:C:2008:267, paragraphs 65 to 67; EMS-Bulgaria Transport , C‑284/11, EU:C:2012:458, paragraph 67; and Rēdlihs , EU:C:2012:497, paragraph 47).
35. In order to assess whether such a penalty is consistent with the principle of proportionality, the nature and the degree of seriousness of the infringement which that penalty seeks to sanction must, inter alia, be taken into account, as must also the means of establishing the amount of that penalty.
39. However, the Court has consistently held that a belated settlement of VAT, in the absence of attempted evasion or detriment to the budget of the State, constitutes merely a formal infringement that cannot call into question the taxable person’s right to deduct. In any event, such belated payment cannot be equated with evasion, which presupposes, first, that the transaction concerned, notwithstanding compliance with the conditions laid down by the relevant provisions of the Sixth Directive and the national legislation transposing it, results in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions and, secondly, that it is 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, judgments in Halifax and Others , C‑255/02, EU:C:2006:121, paragraphs 74 and 75, and EMS-Bulgaria Transport , EU:C:2012:458, paragraph 74).
41. In that regard, without it being necessary to examine the compatibility of that part of the penalty with the principle of proportionality, it suffices to recall, first, that the Court has repeatedly held that, in view of the preponderant position which the right to deduct has in the common system of VAT, which seeks to ensure complete neutrality of taxation of all economic activities, that neutrality presupposes that a taxable person may deduct the VAT paid or payable in the course of all his economic activities, a penalty consisting of a refusal of the right to deduct is not compatible with the Sixth Directive where no evasion or detriment to the budget of the State is ascertained (see, to that effect, judgments in Sosnowska , C‑25/07, EU:C:2008:395, paragraphs 23 and 24, and EMS-Bulgaria Transport , EU:C:2012:458, paragraphs 68 and 70).
42. Furthermore, it is clear from the case-law of the Court that, contrary to what the Italian Government argued at the hearing, the reverse charge mechanism provided for under the Sixth Directive enables authorities, inter alia, to counter the tax evasion and avoidance observed in certain types of transactions (see judgment in Véleclair , C‑414/10, EU:C:2012:183, paragraph 34).
44. Next, in relation to the part of the penalty consisting of an increase of the tax at a fixed percentage, it suffices to point out that the Court of Justice has already held that such a procedure for establishing the amount of the penalty — which does not include any possibility of gradation — may go further than is necessary to ensure the correct levying and collection of the VAT and the prevention of evasion (see, to that effect, judgment in Rēdlihs , EU:C:2012:497, paragraphs 45 and 50 to 52).
45. In this case, having regard to the level of the percentage used for the increase laid down by national legislation and the impossibility of adapting it to the specific circumstances of each case, it is possible that the procedure for establishing the amount of the penalty and, therefore, the part corresponding to that increase, may prove to be disproportionate (judgment in Rēdlihs , EU:C:2012:497, paragraph 52).
46. Finally, it should further be added that, in accordance with the Court’s case-law, the payment of default interest may constitute an adequate penalty in the case of infringement of a formal obligation, provided that it does not go further than is necessary to achieve the objectives pursued, of ensuring the correct collection of VAT and of preventing evasion (see judgment in EMS-Bulgaria Transport , EU:C:2012:458, paragraph 75).