Bogusław Juliusz Dankowski v Dyrektor Izby Skarbowej w Łodzi.
Date: 2010-12-22
22. It must be borne in mind, first, that, the right of deduction provided for in Article 17(2) of the Sixth Directive is an integral part of the VAT scheme and in principle may not be limited (see Case C‑409/99 Metropol and Stadler  [2002] ECR I‑81, paragraph 42, and Case C‑465/03 Kretztechnik  [2005] ECR I‑4357, paragraph 33).
23. The right to deduct is exercisable immediately in respect of all the taxes charged on input transactions (see Case C‑437/06 Securenta  [2008] ECR I‑1597, paragraph 24; Case C‑102/08 SALIX Grundstücks-Vermietungsgesellschaft  [2009] ECR I‑4629, paragraph 70, and Case C‑29/08 SKF  [2009] ECR I‑10413, paragraph 55).
24. The deduction system thus established is intended 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 Case C‑137/02 Faxworld  [2004] ECR I‑5547, paragraph 37, and SKF , paragraph 56).
33. However, notwithstanding the importance of such registration if the VAT system is to operate properly, a failure on the part of a taxable person to meet that requirement cannot impinge on the right of deduction conferred on another taxable person by Article 17(2) of the Sixth Directive.
34. Article 22(1) of the Sixth Directive provides only that there is an obligation on taxable persons to state when their activity commences, changes or ceases, but that provision in no way authorises Member States, in the event of such a declaration not being submitted, to defer the exercise of the right to deduct until the time at which taxable transactions actually begin to be carried out on a regular basis, or to deprive the taxable person of that right (see Joined Cases C‑110/98 to C‑147/98 Gabalfrisa and Others  [2000] ECR I‑1577, paragraph 51, and Case C‑385/09 Nidera Handelscompagnie [2010] ECR I‑0000, paragraph 48).
35. Therefore, where the competent tax authority has the information necessary to establish that the taxable person is, as the recipient of marketing services, liable to VAT, it cannot impose, in relation to the right of that taxable person to deduct input tax, additional conditions which may have the effect of rendering that right ineffective for practical purposes (see Joined Cases C‑95/07 and C‑96/07 Ecotrade  [2008] ECR I‑3457, paragraph 64, and Case C‑392/09 Uszodaépítő [2010] ECR I‑0000, paragraph 40).
36. Accordingly, any failure by the service provider to meet the requirement stated in Article 22(1) of the Sixth Directive cannot call in question the right of deduction to which the recipient of those services is entitled under Article 17(2) of that directive.
37. The same is true of Article 22(8) of the Sixth Directive, pursuant to which the Member States may impose other obligations which they deem necessary for the correct collection of the tax and for the prevention of evasion. Although that provision allows Member States to take certain measures, those measures must not however go further than is necessary to attain that objective and may not therefore be used in such a way that they would have the effect of systematically undermining the right to deduct VAT, which is a fundamental principle of the common system of VAT (see Joined Cases C‑286/94, C‑340/95, C‑401/95 and C‑47/96 Molenheide and Others  [1997] ECR I‑7281, paragraph 47, Gabalfrisa and Others , paragraph 52 and Ecotrade , paragraphs 65 and 66).
38. It follows from the foregoing that Articles 18(1)(a) and 22(3)(b) of the Sixth Directive must be interpreted as meaning that a taxable person has the right to deduct VAT paid in respect of services supplied by another taxable person who is not registered for VAT, where the relevant invoices contain all the information required by Article 22(3)(b), in particular the information needed to identify the person who drew up those invoices and to ascertain the nature of the services provided.
The second part of the questions referred for a preliminary ruling
40. In that regard, it must be borne in mind that that provision is a derogation which enables, in certain circumstances, Member States to retain their existing legislation in respect of exclusion from the right of deduction, as at the date of entry into force of the Sixth Directive for the Member State concerned, until such time as the Council has adopted the provisions envisaged by that article (see Case C‑371/07 Danfoss and AstraZeneca  [2008] ECR I‑9549, paragraph 28, and Joined Cases C‑538/08 and C‑33/09 X Holding and Oracle Nederland  [2010] ECR I‑0000, paragraph 38).
41. As regards the scope of that provision, the Court has held that the power granted to the Member States in Article 17(6) of the Sixth Directive does not constitute an unfettered discretion to exclude all, or virtually all, goods and services from the right to deduct VAT, and thus to render meaningless the system established in Article 11(1) of that Directive. That power does not therefore apply to general exclusions and does not release Member States from the obligation sufficiently to define the goods and services in relation to which the right to deduct is excluded (see Case C‑305/97 Royscot and Others  [1999] ECR I‑6671 paragraphs 22 and 24; Case C‑434/03 Charles and Charles-Tijmens  [2005] ECR I‑7037, paragraphs 33 and 35, and Case C‑395/09 Oasis East  [2010] ECR I‑0000, paragraph 23).
42. Furthermore, as the scheme here involves a derogation from the principle of the right to deduct VAT, it must be interpreted strictly (see Case C‑414/07 Magoora  [2008] ECR I‑10921, paragraph 28, and Oasis East , paragraph 24).
43. So far as concerns the main proceedings and the possible applicability of the derogation provided for in Article 17(6) of the Sixth Directive to the present case, it must be noted that that directive entered into force in Poland on the date of the accession of that Member State to the European Union, namely 1 May 2004. Therefore, that is the material date for the purposes of the application of the abovementioned provision in respect of that Member State ( Oasis East , paragraph 25).
46. The Court has ruled that the Member States are not empowered to maintain exclusions from the right to deduct VAT which apply in a general manner to any expenditure related to the acquisition of goods or services (Case C‑74/08 PARAT Automotive Cabrio  [2009] ECR I‑3459, paragraphs 28 and 29, and Oasis East , paragraph 30).
47. It follows from all of the foregoing that Article 17(6) of the Sixth Directive must be interpreted as precluding national legislation which excludes the right to deduct VAT paid by a taxable person to another taxable person, who has provided services, where the latter has not registered for the purposes of that tax.
Costs