Goldsmiths (Jewellers) Ltd v Commissioners of Customs & Excise.
Date: 1997-07-03
15 That provision embodies one of the fundamental principles of the Sixth Directive, according to which the basis of assessment is the consideration actually received (Case 230/87 Naturally Yours Cosmetics v Commissioners of Customs and Excise [1988] ECR 6365, paragraph 16) and the corollary of which is that the tax authorities may not in any circumstances charge an amount of VAT exceeding the tax paid by the taxable person (Case C-317/94 Gibbs v Commissioners of Customs and Excise [1996] ECR I-5339, paragraph 24).
16 In accordance with that principle, the first subparagraph of Article 11C(1) of the Sixth Directive defines the cases in which the Member States are required to ensure that the taxable amount is reduced accordingly, under conditions which are to be determined by the Member States themselves.  That provision therefore requires the Member States to reduce the taxable amount and, consequently, the amount of VAT payable by the taxable person whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person.
17 Nevertheless, the second subparagraph of Article 11C(1) of the Sixth Directive permits the Member States to derogate from the abovementioned rule in the case of total or partial non-payment.
18 The power to derogate, which is strictly limited to the latter situation, is based on the notion that in certain circumstances and because of the legal situation prevailing in the Member State concerned, non-payment of consideration may be difficult to establish or may only be temporary.  It follows that the exercise of that power must be justified if the measures taken by the Member States for its implementation are not to undermine the objective of fiscal harmonization pursued by the Sixth Directive.
21 First, it is clear from Case 324/82 Commission v Belgium [1984] ECR 1861, paragraph 29, that measures intended to prevent tax evasion or avoidance may not in principle derogate from the basis for charging VAT laid down in Article 11 of the Sixth Directive, except within the limits strictly necessary for achieving that specific aim.
23 Second, no distinction between consideration in money and consideration in kind is drawn in either Article 11A(1)(a) or Article 11C(1).  As is apparent from the judgment in Naturally Yours, cited above, paragraph 16, for those provisions to apply it is sufficient if the consideration is capable of being expressed in money (see also Case C-33/93 Empire Stores v Commissioners of Customs and Excise [1994] ECR I-2329, paragraph 12).  Since the two situations are, economically and commercially speaking, identical, the Sixth Directive treats the two kinds of consideration in the same way.
24 It follows that the refusal to refund VAT in the case of transactions in which the consideration is to be paid in kind, where such consideration is not paid in whole or in part, leads to discrimination against transactions of that type as compared with those in which the consideration is expressed in money.
25 A distinction of the kind made by the legislation at issue discourages traders from entering into barter contracts, although such contracts are not, in financial or commercial terms, in any way different from transactions in which the consideration is expressed in money, and consequently restricts traders' freedom to choose the contract which they consider to be most suited to satisfying their economic interests.