Keywords
Summary

Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax

(Council Directive 2006/112, Arts 9(1) and 168)

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Restriction of the right to deduct

(Council Directive 2006/112, Art. 168)

Summary

1. A taxpayer may, in principle, claim a right of deduction of input value added tax paid or payable for the supply of a service, carried out for consideration, when the applicable national law permits the assignment of a share in the co‑ownership of an invention which confers rights relating to the invention.

The concept of economic activity encompasses any activity of producers, traders or persons supplying services. The terms ‘supply of goods’ and ‘supply of services’ are objective in nature and apply without regard to the purpose or results of the transactions concerned. Thus, the assignment of a share in the co-ownership of an invention, notwithstanding the fact that that invention was not registered as a patent, may, in principle, be an economic activity subject to value added tax. It follows that such a transaction may give rise to a right of deduction of input value added tax paid or payable.

The question whether the assignment at issue is carried out for the sole purpose of obtaining a tax advantage is entirely irrelevant in determining whether it constitutes a supply of a service and an economic activity within the meaning of the relevant provisions of Directive 2006/112 on the common system of value added tax.

(see paras 45-48, operative part 1)

2. In the sphere of value added tax, an abusive practice can be found to exist only if, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the directive and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions and, second, it is apparent from a number of objective factors that the essential aim of the transactions concerned is solely to obtain that tax advantage.

With regard to the tax treatment of a transaction in which a share in the co- ownership of an invention which confers rights relating to the invention is assigned, it is for the referring court to establish, taking into account all the factual circumstances characterising such a supply of the service, whether or not there has been an abuse of rights with regard to the right of deduction of input value added tax.

(see paras 52, 54, operative part 2)