Le Crédit Lyonnais v Ministre du Budget, des Comptes publics et de la Réforme de l’État.
Date: 2013-09-12
20. As a preliminary point, it should be noted that, according to settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the question referred to it (see, inter alia, FCE Bank , paragraph 21).
23. In order to answer that question, it should be borne in mind that, in determining the scope of a provision of EU law, its wording, context and objectives must all be taken into account (see, inter alia, Case C‑174/08 NCC Construction Danmark  [2009] ECR I‑10567, paragraph 23 and case-law cited).
26. The right to deduct, provided for in Article 17 et seq. of the Sixth Directive, is an integral part of the VAT scheme and, in principle, may not be limited (Case C‑243/03 Commission  v France  [2005] ECR I‑8411, paragraph 28 and case-law cited, and Case C‑488/07 Royal Bank of Scotland  [2008] ECR I‑10409, paragraph 14).
27. The deduction system is 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 Royal Bank of Scotland , paragraph 15 and case-law cited).
28. In particular, Article 17(5) of the Sixth Directive lays down the rules applicable to the right to deduct VAT where the VAT relates to goods or services used by the taxable person ‘both for transactions covered by paragraphs 2 and 3, in respect of which value added tax is deductible, and for transactions in respect of which value added tax is not deductible’. In such a case, the first subparagraph of Article 17(5) of the Sixth Directive provides that only such proportion of the VAT is deductible as is attributable to the former taxable transactions ( Royal Bank of Scotland , paragraph 17).
29. Under the second subparagraph of Article 17(5) of the Sixth Directive, the right to deduct is quantified according to a proportion fixed in accordance with Article 19 of that directive ( Royal Bank of Scotland , paragraph 18).
31. It is for the Member States’ tax authorities to lay down, as the third subparagraph of Article 17(5) of the Sixth Directive allows them to do, the method for determining the right to deduct, permitting them to provide for determination of a separate proportion for each sector of business or deduction on the basis of the use made of all or part of the goods and services for a specific activity, or they may even exclude the right of deduction in certain circumstances (see, to that effect, Royal Bank of Scotland , paragraph 19).
32. The finding in paragraph 31 above is moreover confirmed by the fact that the method of repayment of VAT, by deduction or by refund, depends solely on the place where the taxable person is established (see, to that effect, Case C‑244/08 Commission  v Italy  [2009] ECR I‑130, paragraphs 25 and 33).
33. In addition, it must be observed that the concept of the ‘place of establishment’ covers not only the taxable person’s principal establishment, but also the fixed establishments within the meaning of the Sixth Directive which that person may have in other Member States. Thus, a company which has its principal establishment in one Member State and a fixed establishment in another Member State must be considered, by virtue of that fact, as being established in the last‑mentioned Member State for the activities carried out there and can no longer claim a refund of the VAT within the meaning of the Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ 1979 L 331, p. 11), and of the Thirteenth Council Directive 86/560/EEC of 17 November 1986 on the harmonisation of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in Community territory (OJ 1986 L 326, p. 40), which is paid there. It is for that fixed establishment to seek, from the tax authorities of that State, deduction of VAT in respect of the acquisitions made there ( Commission  v Italy , paragraphs 33 and 35).
34. Since the Court has held that the fixed establishment, within the meaning of the Sixth Directive, situated in a Member State and the principal establishment situated in another Member State constitute a single taxable person subject to VAT ( Commission  v Italy , paragraph 38), it follows that a taxpayer is subject, in addition to the system which applies in the State of its principal establishment, to as many national systems of deduction as there are Member States in which it has fixed establishments.
46. In that regard, furthermore, taxable persons are generally free to choose the organisational structures and the form of transactions which they consider to be most appropriate for their economic activities and for the purposes of limiting their tax burdens (Case C‑277/09 RBS Deutschland Holdings [2010] ECR I‑13805, paragraph 53).
47. Thus, a trader’s choice between exempt transactions and taxable transactions may be based on a range of factors, including on tax considerations relating to the neutral system of VAT (see Case C‑108/99 Cantor Fitzgerald International  [2001] ECR I‑7257, paragraph 33).
48. In addition, as is apparent from the case-law of the Court, where it is possible for the taxable person to choose from among a number of transactions, he may choose to structure his business in such a way as to limit his tax liability (see, inter alia, Case C‑255/02 Halifax and Others  [2006] ECR I‑1609, paragraph 73, and RBS Deutschland Holdings , paragraph 54).
51. In order to answer that question, it should be borne in mind that, reading Article 17(5) and 19(1) of the Sixth Directive in conjunction, the latter provision refers only to the proportion deductible under the first subparagraph of Article 17(5) of the directive, and therefore lays down a detailed rule for calculating the proportion referred to in the first of those two provisions only and, by extension, for the deduction to be made pursuant to point (d) of the third subparagraph of Article 17(5) of that directive (see, to that effect, Royal Bank of Scotland , paragraph 22, and Case C‑511/10 BLC Baumarkt [2012] ECR I‑0000, paragraph 21).
52. The Court has also held that, in the absence of indications in the Sixth Directive, it is for the Member States to establish, within the limits of compliance with EU law and the principles on which the common system of VAT is based, methods and rules governing the calculation of the deductible proportion of input VAT. In exercising that power, those States are obliged to take account of the purpose and general system of that directive (see, inter alia, BLC Baumarkt , paragraph 22 and case-law cited).