Keywords
Summary

Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Taxable person simultaneously carrying out economic activities and non-economic activities

(Council Directive 77/388, Art. 2(1))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Taxable person simultaneously carrying out economic activities and non-economic activities

(Council Directive 77/388)

Summary

1. Where a taxpayer simultaneously carries out economic activities, taxed or exempt, and non-economic activities outside the scope of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, deduction of the value added tax relating to expenditure connected with the issue of shares and atypical silent partnerships is allowed only to the extent that that expenditure is attributable to the taxpayer’s economic activity within the meaning of Article 2(1) of that directive.

(see para. 31, operative part 1)

2. The determination of the methods and criteria for apportioning input value added tax between economic and non-economic activities within the meaning of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is in the discretion of the Member States who, when exercising that discretion, must have regard to the aims and broad logic of that directive and, on that basis, provide for a method of calculation which objectively reflects the part of the input expenditure actually to be attributed, respectively, to those two types of activity.

The Member States have the right to apply, as necessary, an investment formula or a transaction formula or any other appropriate formula, without being required to restrict themselves to only one of those methods.

(see paras 38-39, operative part 2)