Case C‑532/16

Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos

v

SEB bankas AB

(Request for a preliminary ruling from the Lietuvos vyriausiasis administracinis teismas)

(Reference for a preliminary ruling — Common system of value added tax (VAT) — Limitation of the right to deduct input tax — Adjustment of the deduction of input tax paid — Supply of land — Mischaracterisation as ‘taxable activity’ — Indication of VAT on the initial invoice — Amendment of that indication by the supplier)

Summary — Judgment of the Court (First Chamber), 11 April 2018

1. Harmonisation of fiscal legislation—Common system of value added tax—Deduction of input tax—Adjustment of the initial deduction—Initial deduction made unlawfully—Obligation to adjust—Adjustment mechanism provided for by Directive 2006/112 with regard to immovable property acquired as capital goods—Scope—Deduction initially made in the absence of any right to deduct—Precluded

   (Council Directive 2006/112, Arts 184 and 187 to 189)

2. Harmonisation of fiscal legislation—Common system of value added tax—Deduction of input tax—Adjustment of the initial deduction—Initial deduction made unlawfully—Determination of the date on which the obligation to adjust arises and the period for which that adjustment must be made, incumbent on the Member States—Obligation to comply with EU law and its general principles, in particular legal certainty and legitimate expectations

   (Council Directive 2006/112, Art. 186)

1.  Article 184 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the obligation to adjust undue value added tax (VAT) deductions set down in that article also applies to cases where the initial deduction could not be made lawfully because the transaction giving rise to that deduction was exempt from VAT. By contrast, Articles 187 to 189 of Directive 2006/112 must be interpreted as meaning that the mechanism for the adjustment of undue VAT deductions provided for in those articles is not applicable in such cases, in particular in a situation such as that at issue in the main proceedings, where the initial VAT deduction was unjustified as it concerned a VAT-exempt transaction relating to the supply of land.

   (see para. 45, operative part 1)

2.  Article 186 of Directive 2006/112 must be interpreted as meaning that, in cases where the initial deduction of VAT could not be made lawfully, it is for the Member States to determine the date on which the obligation to adjust the undue VAT deduction arises and the time period for which that adjustment must be made, in accordance with the principles of EU law, in particular the principles of legal certainty and legitimate expectations. It is for the national court to determine whether, in cases such as that at issue in the main proceedings, those principles have been respected.

   (see para. 53, and operative part 2)