Investrand BV v Staatssecretaris van Financiën.
Date: 2007-02-08
22. It should be noted, to begin with, that the rules governing deduction introduced by the Sixth Directive are 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 complete neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT (see, inter alia, Case 268/83 Rompelman  [1985] ECR 655, paragraph 19; Case C-37/95 Ghent Coal Terminal  [1998] ECR I-1, paragraph 15; and Case C‑408/98 Abbey National  [2001] ECR I‑1361, paragraph 24).
23. According to settled case-law, the existence of a direct and immediate link between a particular input transaction and a particular output transaction or transactions giving rise to entitlement to deduct is, in principle, necessary before the taxable person is entitled to deduct input VAT and in order to determine the extent of such entitlement (see Midland Bank , paragraph 24; Abbey National , paragraph 26; and Case C-32/03 Fini H  [2005] ECR I-1599, paragraph 26). The right to deduct VAT charged on the acquisition of input goods or services presupposes that the expenditure incurred in acquiring them was a component of the cost of the output transactions that gave rise to the right to deduct (see Midland Bank , paragraph 30; Abbey National , paragraph 28; and Case C-16/00 Cibo Participations  [2001] ECR I-6663, paragraph 31).
24. It is however also accepted that a taxable person has a right to deduct even where there is no direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct, where the costs of the services in question are part of his general costs and are, as such, components of the price of the goods or services which he supplies. Such costs do have a direct and immediate link with the taxable person’s economic activity as a whole (see, inter alia, Midland Bank , paragraphs 23 and 31, and Kretztechnik , paragraph 36).
25. In the case in the main proceedings, it must be pointed out, as did the national court, that, in accordance with settled case-law, the sale of shares does not in itself constitute an economic activity within the meaning of the Sixth Directive and does not therefore fall within its scope (see, inter alia, Case C-155/94 Wellcome Trust  [1996] ECR I‑3013, paragraphs 33 to 37; EDM , paragraphs 57 to 62; and Kretztechnik , paragraph 19).
26. Contrary to what Investrand has claimed, the steps taken by a taxable person, on his own behalf, to recover a claim or establish the value thereof cannot be treated as such an activity either. Such steps do not constitute the exploitation of property to produce income on a continuing basis because any resultant gain derives merely from his status as holder of the claim in question and is not the product of any economic activity within the meaning of the Sixth Directive (see, to that effect, Kretztechnik , paragraph 19).
33. In those circumstances, it cannot be considered that the costs relating to those services were incurred for the purposes of and with a view to Investrand’s taxable activities. As the exclusive reason for those costs is not to be found in those activities, the costs have no direct and immediate link to them.
34. As the Commission observed, Investrand’s position in this case is no different from that of a private shareholder who, having sold his shares, has sought legal advice and incurred expenditure relating to that advice in the course of a dispute with the purchaser concerning the claim corresponding to the price of that sale. Those circumstances do not fall within the scope of the Sixth Directive (see, to that effect, EDM , paragraphs 60 and 61).
36. While it may not be inferred from any document before the Court that, in the circumstances of this case, Investrand would not have obtained the advisory services at issue if it had not carried out an economic activity which was subject to VAT, the exclusive reason for the advisory services concerned in the case which gave rise to the judgment in Kretztechnik  was, by contrast, to be found in the taxable person’s economic activity and in the capital increase it decided on to augment its financial means for the benefit of that activity.