Joined Cases C‑131/13, C‑163/13 and C‑164/13

Staatssecretaris van Financiën

v

Schoenimport ‘Italmoda’ Mariano Previti vof

and

Turbu.com BV, Turbu.com Mobile Phone’s BV

v

Staatssecretaris van Financiën

(Request for preliminary ruling from the Hoge Raad der Nederlanden)

‛References for a preliminary ruling — VAT — Sixth Directive — Transitional arrangements for trade between Member States — Goods dispatched or transported within the Community — Tax evasion carried out in the Member State of arrival — Evasion taken into account in the Member State of dispatch — Refusal of the benefit of rights to deduction, exemption or refund — Absence of provisions in national law’

Summary — Judgment of the Court (First Chamber), 18 December 2014

1. Questions referred for a preliminary ruling — Admissibility — Limits — Hypothetical questions raised in a context excluding a useful answer — Inadmissibility

   (Art. 267 TFEU)

2. Harmonisation of fiscal legislation — Common system of value added tax — Transitional arrangements for the taxation of trade between Member States — Intra-Community supply — Transaction involved in VAT evasion — Taxable person who knew of or should have known of the existence of fraud — National legislation not providing for a refusal to apply the rights to deduction of, exemption from, or refund in the event of the existence of fraud — Obligation on national authorities and courts to refuse to apply such rights

   (Council Directive 77/388, Arts 17(2) and (3), 28bA(2) and 28cA(a))

3. Harmonisation of fiscal legislation — Common system of value added tax — Transitional arrangements for the taxation of trade between Member States — Intra-Community supply — Transactions not themselves being marred by VAT evasion but part of a chain of supplies constituting a fraudulent transaction — Taxable person who knew of or ought to have known of the existence of fraud — Evasion committed in a Member State other than that in which the benefit of the rights to deduction of, exemption from or refund was sought — National legislation not providing for a refusal to apply those rights in the event of the existence of fraud — No effect — Obligation on national authorities and courts to refuse to apply such rights

   (Council Directive 77/388, Arts 17(2) and(3), 28bA(2) and 28cA(a))

1.  See the text of the decision.

   (see paras 35, 38, 39)

2.  Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that it is for the national authorities and courts to refuse a taxable person, in the context of an intra-Community supply, the benefit of the rights to deduction of, exemption from or refund of value added tax, even in the absence of provisions of national law providing for such refusal, if it is established, in the light of objective factors, that that taxable person knew, or should have known, that, by the transaction relied on as a basis for the right concerned, it was participating in evasion of value added tax committed in the context of a chain of supplies.

   It is, in principle, the responsibility of the national authorities and courts to refuse the benefit of the rights laid down by the Sixth Directive when they are claimed fraudulently or abusively, irrespective of whether those rights are rights to a deduction, to an exemption or to a refund of value added tax in respect of intra-Community supplies. If there are no specific provisions to that effect in the national legal order, it is for the national court to ascertain whether there are, in the Member State concerned, rules of law, whether a provision or a general principle prohibiting abuse of rights, or other provisions relating to tax evasion or tax avoidance which might be interpreted in accordance with the requirements of EU law in regard to combatting tax evasion.

   However, should it transpire that national law contains no such rules which may be interpreted in accordance with the requirements of EU law, it cannot nevertheless be inferred from this that the national authorities and courts would be prevented from satisfying those requirements and, accordingly, refusing a benefit derived from a right laid down by the Sixth Directive in the event of fraud.

   If it is true that a cannot be relied on as such, by the Member State, against a taxable person, in so far as abusive or fraudulent acts cannot form the basis of a right under EU law, the refusal of a benefit under the Sixth Directive does not amount to imposing an obligation on the individual concerned under that directive, but is merely the consequence of the finding that the objective conditions required for obtaining the advantage sought, under the directive as regards that right, have, in fact, not been satisfied.

   In such a situation, however, express authorisation cannot be required in order for the national authorities and courts to be able to refuse a benefit under the common system of value added tax, as that consequence must be regarded as being inherent in the system.

   Moreover, a taxable person who has created the conditions for obtaining a right only by participating in fraudulent transactions is clearly not justified in invoking the principles of protection of legitimate expectations or legal certainty in order to oppose the refusal to grant the right in question.

   Finally, since refusal of the benefit of a right stemming from the common system of value added tax in the case where a taxable person is involved in fraud is merely the consequence of a failure to satisfy the conditions required in that respect by the relevant provisions of the Sixth Directive, that refusal is not in the nature of a penalty or a sanction within the meaning of Article 7 of the European Convention on Human Rights or Article 49 of the Charter of Fundamental Rights of the European Union.

   (see paras 49, 51-55, 57, 59-62, operative part 2)

3.  Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that a taxable person who knew, or should have known, that, by the transaction relied on as a basis for rights to deduction of, exemption from or refund of value added tax, that person was participating in evasion of value added tax committed in the context of a chain of supplies, may be refused the benefit of those rights, notwithstanding the fact that the evasion was carried out in a Member State other than that in which the benefit of those rights has been sought and that taxable person has, in the latter Member State, complied with the formal requirements laid down by national legislation for the purpose of benefiting from those rights.

   (see para. 69, operative part 3)

Joined Cases C‑131/13, C‑163/13 and C‑164/13

Staatssecretaris van Financiën

v

Schoenimport ‘Italmoda’ Mariano Previti vof

and

Turbu.com BV, Turbu.com Mobile Phone’s BV

v

Staatssecretaris van Financiën

(Request for preliminary ruling from the Hoge Raad der Nederlanden)

‛References for a preliminary ruling — VAT — Sixth Directive — Transitional arrangements for trade between Member States — Goods dispatched or transported within the Community — Tax evasion carried out in the Member State of arrival — Evasion taken into account in the Member State of dispatch — Refusal of the benefit of rights to deduction, exemption or refund — Absence of provisions in national law’

Summary — Judgment of the Court (First Chamber), 18 December 2014

1. Questions referred for a preliminary ruling — Admissibility — Limits — Hypothetical questions raised in a context excluding a useful answer — Inadmissibility

   (Art. 267 TFEU)

2. Harmonisation of fiscal legislation — Common system of value added tax — Transitional arrangements for the taxation of trade between Member States — Intra-Community supply — Transaction involved in VAT evasion — Taxable person who knew of or should have known of the existence of fraud — National legislation not providing for a refusal to apply the rights to deduction of, exemption from, or refund in the event of the existence of fraud — Obligation on national authorities and courts to refuse to apply such rights

   (Council Directive 77/388, Arts 17(2) and (3), 28bA(2) and 28cA(a))

3. Harmonisation of fiscal legislation — Common system of value added tax — Transitional arrangements for the taxation of trade between Member States — Intra-Community supply — Transactions not themselves being marred by VAT evasion but part of a chain of supplies constituting a fraudulent transaction — Taxable person who knew of or ought to have known of the existence of fraud — Evasion committed in a Member State other than that in which the benefit of the rights to deduction of, exemption from or refund was sought — National legislation not providing for a refusal to apply those rights in the event of the existence of fraud — No effect — Obligation on national authorities and courts to refuse to apply such rights

   (Council Directive 77/388, Arts 17(2) and(3), 28bA(2) and 28cA(a))

1.  See the text of the decision.

   (see paras 35, 38, 39)

2.  Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that it is for the national authorities and courts to refuse a taxable person, in the context of an intra-Community supply, the benefit of the rights to deduction of, exemption from or refund of value added tax, even in the absence of provisions of national law providing for such refusal, if it is established, in the light of objective factors, that that taxable person knew, or should have known, that, by the transaction relied on as a basis for the right concerned, it was participating in evasion of value added tax committed in the context of a chain of supplies.

   It is, in principle, the responsibility of the national authorities and courts to refuse the benefit of the rights laid down by the Sixth Directive when they are claimed fraudulently or abusively, irrespective of whether those rights are rights to a deduction, to an exemption or to a refund of value added tax in respect of intra-Community supplies. If there are no specific provisions to that effect in the national legal order, it is for the national court to ascertain whether there are, in the Member State concerned, rules of law, whether a provision or a general principle prohibiting abuse of rights, or other provisions relating to tax evasion or tax avoidance which might be interpreted in accordance with the requirements of EU law in regard to combatting tax evasion.

   However, should it transpire that national law contains no such rules which may be interpreted in accordance with the requirements of EU law, it cannot nevertheless be inferred from this that the national authorities and courts would be prevented from satisfying those requirements and, accordingly, refusing a benefit derived from a right laid down by the Sixth Directive in the event of fraud.

   If it is true that a cannot be relied on as such, by the Member State, against a taxable person, in so far as abusive or fraudulent acts cannot form the basis of a right under EU law, the refusal of a benefit under the Sixth Directive does not amount to imposing an obligation on the individual concerned under that directive, but is merely the consequence of the finding that the objective conditions required for obtaining the advantage sought, under the directive as regards that right, have, in fact, not been satisfied.

   In such a situation, however, express authorisation cannot be required in order for the national authorities and courts to be able to refuse a benefit under the common system of value added tax, as that consequence must be regarded as being inherent in the system.

   Moreover, a taxable person who has created the conditions for obtaining a right only by participating in fraudulent transactions is clearly not justified in invoking the principles of protection of legitimate expectations or legal certainty in order to oppose the refusal to grant the right in question.

   Finally, since refusal of the benefit of a right stemming from the common system of value added tax in the case where a taxable person is involved in fraud is merely the consequence of a failure to satisfy the conditions required in that respect by the relevant provisions of the Sixth Directive, that refusal is not in the nature of a penalty or a sanction within the meaning of Article 7 of the European Convention on Human Rights or Article 49 of the Charter of Fundamental Rights of the European Union.

   (see paras 49, 51-55, 57, 59-62, operative part 2)

3.  Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that a taxable person who knew, or should have known, that, by the transaction relied on as a basis for rights to deduction of, exemption from or refund of value added tax, that person was participating in evasion of value added tax committed in the context of a chain of supplies, may be refused the benefit of those rights, notwithstanding the fact that the evasion was carried out in a Member State other than that in which the benefit of those rights has been sought and that taxable person has, in the latter Member State, complied with the formal requirements laid down by national legislation for the purpose of benefiting from those rights.

   (see para. 69, operative part 3)