SC Paper Consult SRL v Direcţia Regională a Finanţelor Publice Cluj-Napoca and Administraţia Judeţeană a Finanţelor Publice Bistriţa Năsăud.
Date: 2017-10-19
28


It must be borne in mind that, according to settled case-law, in the context of the cooperation between the Court and the national courts provided for by Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle required to give a ruling (judgments of 15 January 2013, Križan and Others, C‑416/10, EU:C:2013:8, paragraph 53, and of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 56).
29


It follows that questions concerning EU law enjoy a presumption of necessity and relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 15 January 2013, Križan and Others, C‑416/10, EU:C:2013:8, paragraph 54, and of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 57).
35


As regards the right to deduct, it must be borne in mind that, according to settled case-law, the right of taxable persons to deduct the VAT due or already paid on goods purchased and services received as inputs from the VAT which they are liable to pay is a fundamental principle of the common system of VAT established by EU legislation (see, inter alia, judgments of 25 October 2001, Commission v Italy, C‑78/00, EU:C:2001:579, paragraph 28, and of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 37).
36


As the Court has repeatedly held, the right to deduct 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. In particular, the right to deduct is exercisable immediately in respect of all the taxes charged on transactions relating to inputs (see, inter alia, judgments of 21 March 2000, Gabalfrisa and Others, C‑110/98 to C‑147/98, EU:C:2000:145, paragraph 43, and of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 38).
37


The deduction system 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 the neutrality of taxation of all economic activities, whatever the purpose or results of those activities, provided that they are themselves subject in principle to VAT (see, inter alia, judgments of 21 March 2000, Gabalfrisa and Others, C‑110/98 to C‑147/98, EU:C:2000:145, paragraph 44, and of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 39).
38


The right to deduct VAT is, however, subject to compliance with both substantive requirements or conditions and formal requirements or conditions.
39


With regard to the substantive requirements or conditions, it is apparent from the wording of Article 168(a) of Directive 2006/112 that, in order to have a right to deduct, it is necessary, first, that the interested party be a ‘taxable person’ within the meaning of that directive and, second, that the goods or services relied on to confer entitlement to that right be used by the taxable person for the purposes of his own taxed output transactions, and that, as inputs, those goods or services must be supplied by another taxable person (see, to that effect, inter alia, judgments of 6 September 2012, Tóth, C‑324/11, EU:C:2012:549, paragraph 26, and of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 28 and the case-law cited).
40


As to the detailed rules governing the exercise of the right to deduct, which may be considered formal requirements or conditions, Article 178(a) of Directive 2006/112 provides that the taxable person must hold an invoice drawn up in accordance with Articles 220 to 236 and Articles 238 to 240 of that directive.
41


According to settled case-law, the fundamental principle of VAT neutrality requires deduction of input tax to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements (judgments of 12 July 2012, EMS-Bulgaria Transport, C‑284/11, EU:C:2012:458, paragraph 62 and the case-law cited, and of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 45).
42


The position may, however, be different if non-compliance with such formal requirements effectively prevents the production of conclusive evidence that the substantive requirements have been satisfied (judgments of 12 July 2012, EMS-Bulgaria Transport, C‑284/11, EU:C:2012:458, paragraph 71, and of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 46). It is apparent from the documents before the Court, and as the Advocate-General noted in points 40 to 43 of his Opinion, that this was not so in the case in the main proceedings.
43


Similarly, it is settled case-law that the right to deduct may be refused when it is established, in the light of objective evidence, that that right is being invoked fraudulently or abusively. The fight against tax evasion, avoidance and abuse is an objective recognised and encouraged by Directive 2006/112 and EU law cannot be relied on for fraudulent or abusive ends (judgment of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraphs 42 and 43 and the case-law cited).
47


The pursuit of such an objective undoubtedly amounts to the fulfilment of the obligation of the Member States, stemming from Article 4(3) TEU, Article 325 TFEU, and Articles 2, 250(1) and 273 of Directive 2006/112, to take all legislative and administrative measures appropriate for ensuring collection of all VAT due on their territory and for preventing tax evasion (judgment of 17 December 2015, WebMindLicenses, C‑419/14, EU:C:2015:832, paragraph 41 and the case-law cited). Furthermore, there is a direct link between the collection of VAT revenue in compliance with the applicable EU law and the availability to the European Union budget of the corresponding VAT resources, since any lacuna in the collection of the first potentially causes a reduction in the second (see judgment of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 26).
48


In that regard, it must be noted that the Member States are required to check taxable persons’ returns, accounts and other relevant documents, and to calculate and collect the tax due (see judgment of 9 July 2015, Cabinet Medical Veterinar Dr. Tomoiagă Andrei, C‑144/14, EU:C:2015:452, paragraph 26 and the case-law cited).
50


However, the measures adopted by the Member States must not go beyond what is necessary to achieve the objectives pursued. Therefore, they cannot be used in such a way that they would have the effect of systematically undermining the right to deduct VAT and, consequently, the neutrality of VAT (judgments of 21 March 2000, Gabalfrisa and Others, C‑110/98 to C‑147/98, EU:C:2000:145, paragraph 52, and of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 57).
51


On several occasions, the Court has held that the authorities may not oblige a taxable person to undertake complex and far-reaching checks as to that person’s supplier, thereby de facto transferring their own investigative tasks to that person (see, to that effect, judgments of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 65, and of 31 January 2013, Stroy trans, C‑642/11, EU:C:2013:54, paragraph 50).
52


By contrast, it is not contrary to EU law to require a trader to take every step which could reasonably be required of him to satisfy himself that the transaction which he is carrying out does not result in his participation in tax evasion (see, to that effect, judgments of 27 September 2007, Teleos and Others, C‑409/04, EU:C:2007:548, paragraphs 65 and 68, and of 21 June 2012, Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373, paragraph 54).
64


In this connection, it should be recalled that, according to settled case-law of the Court, the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives to a rule of EU law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its entry into force. It follows that the rule, as thus interpreted, may, and must, be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before the courts having jurisdiction are satisfied (see judgments of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 58, and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 59).
65


It is only quite exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict for any person concerned the opportunity to rely on a provision which it has interpreted with a view to calling into question legal relationships established in good faith. Two essential criteria must be fulfilled before such a limitation can be imposed, namely that those concerned should have acted in good faith and that there should be a risk of serious difficulties (judgments of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 59, and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 60).
66


More specifically, the Court has taken that step only in quite specific circumstances, notably where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it appeared that individuals and national authorities had been led to adopt practices which did not comply with EU law by reason of objective, significant uncertainty regarding the implications of European Union provisions, to which the conduct of other Member States or the Commission may even have contributed (judgments of 10 May 2012, Santander Asset Management SGIIC and Others, C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 60, and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 61).
67


With regard to the doubts highlighted by the Romanian Government relating to the interpretation of EU Law, it must be noted that a refusal to allow taxable persons to exercise the right to deduct VAT constitutes an exception to a fundamental principle of the common system of VAT, the legality of which, according to settled case-law, is acknowledged only in exceptional circumstances.
68


The Commission’s closure of an ‘EU Pilot’ procedure has no bearing on this analysis. The closure of such an informal procedure, which is not in any way governed by the provisions of the Treaties, but involves voluntary cooperation between the Commission and the Member States, designed generally both to ensure the correct application of EU law and to resolve, at an early stage, issues arising from that application, does not in any way prejudge the Commission’s ability to institute formal proceedings for failure to fulfil an obligation under Article 258 TFEU. In any event, the Commission’s attitude can in no way, as such, give rise to a legitimate expectation on the part of a Member State as to the compliance of its national rules with EU law where, as in the present case, it is apparent from the case-law that there is no objective and significant uncertainty as to the scope of EU law, in particular the provisions of Directive 2006/112.