Senatex GmbH v Finanzamt Hannover-Nord.
Date: 2016-09-15
26


It should be recalled that, according to settled case-law of the Court, the right of taxable persons to deduct from the VAT which they are liable to pay the VAT due or paid on goods purchased and services received by them as inputs is a fundamental principle of the common system of VAT established by EU legislation (judgment of 13 February 2014, Maks Pen, C‑18/13, EU:C:2014:69, paragraph 23 and the case-law cited).
27


The deduction system is intended to relieve the operator entirely of the burden of the VAT due or paid in the course of all his economic activities. The common system of VAT therefore ensures that all economic activities, whatever their purpose or results, provided that they are in principle themselves subject to VAT, are taxed in a neutral way (judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 27 and the case-law cited).
28


Under Article 167 of Directive 2006/112, the right to deduct arises at the time when the deductible tax becomes chargeable. The substantive conditions which must be met in order for the right to arise are set out in Article 168(a) of that directive. Thus, for that right to be available, first, the person concerned must be a taxable person within the meaning of that directive and, secondly, the goods or services relied on to give entitlement to the right of deduction must be used by the taxable person for the purposes of his own taxed output transactions and those goods or services must be supplied by another taxable person as inputs (see, to that effect, judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 28 and the case-law cited).
29


As regards the formal conditions for the right of deduction, in accordance with Article 178(a) of Directive 2006/112, the exercise of that right is subject to holding an invoice drawn up in accordance with Article 226 of that directive (see, to that effect, judgments of 1 March 2012, Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz, C‑280/10, EU:C:2012:107, paragraph 41, and of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 29). Under Article 226(3) of that directive, the invoice must mention inter alia the VAT identification number under which the taxable person made the supply of goods or services.
35


On this point, it must be recalled that, in accordance with the first paragraph of Article 179 of Directive 2006/112, the deduction is to be made by subtracting from the total amount of VAT due for a given tax period the total amount of VAT ‘in respect of which, during the same period, the right of deduction has arisen and is exercised in accordance with Article 178’. It follows that the right to deduct VAT must in principle be exercised in respect of the period during which, first, the right has arisen and, secondly, the taxable person is in possession of an invoice (see, to that effect, judgment of 29 April 2004, Terra Baubedarf-Handel, C‑152/02, EU:C:2004:268, paragraph 34).
37


It should be recalled here, first, that the Court has repeatedly held that the right to deduction of VAT 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, and that the right is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, to that effect, judgment of 13 February 2014, Maks Pen, C‑18/13, EU:C:2014:69, paragraph 24 and the case-law cited). The deduction system, as pointed out in paragraph 27 above, is meant to relieve the operator entirely of the burden of the VAT due or paid in the course of all his economic activities. However, national legislation, such as that at issue in the main proceedings, which applies interest for late payment on the amounts of VAT it considers to be due before correction of the invoice originally drawn up imposes a tax burden deriving from VAT on those economic activities, even though the common system of VAT guarantees the neutrality of that tax.
38


Secondly, the Court has held that the fundamental principle of the neutrality of VAT requires deduction of input VAT to be allowed if the substantive requirements are satisfied, even if the taxable persons have failed to comply with some formal conditions (see, to that effect, judgments of 21 October 2010, Nidera Handelscompagnie, C‑385/09, EU:C:2010:627, paragraph 42 and the case-law cited, and of 1 March 2012, Kopalnia Odkrywkowa Polski Trawertyn P. Granatowicz, M. Wąsiewicz, C‑280/10, EU:C:2012:107, paragraph 43). As noted in paragraph 29 above, holding an invoice showing the details mentioned in Article 226 of Directive 2006/112 is a formal condition, not a substantive condition, of the right to deduct VAT.
41


Finally, it must be stated that the Member States have power to lay down penalties for failure to comply with the formal conditions for the exercise of the right to deduct VAT. In accordance with Article 273 of Directive 2006/112, the Member States can adopt measures to ensure the correct collection of VAT and to prevent evasion, provided that those measures do not go further than is necessary to attain those objectives and do not undermine the neutrality of VAT (see, to that effect, judgment of 9 July 2015, Salomie and Oltean, C‑183/14, EU:C:2015:454, paragraph 62).
42


At the hearing, the German Government submitted that the postponement of the right to deduct VAT until the year in which the invoice is corrected was the equivalent of a penalty. However, to penalise the failure to comply with formal requirements, penalties other than the refusal of the right to deduct tax in respect of the year in which the invoice was drawn up might be considered, such as the infliction of a fine or financial penalty proportionate to the seriousness of the offence (see, to that effect, judgment of 9 July 2015, Salomie and Oltean, C‑183/14, EU:C:2015:454, paragraph 63). Moreover, under the legislation at issue in the main proceedings, the postponement of that right, entailing the application of interest for late payment, occurs in any event without account being taken of the circumstances necessitating the correction of the invoice originally drawn up, which goes further than is necessary to attain the objectives referred to in the preceding paragraph of this judgment.