Case C‑648/16

Fortunata Silvia Fontana

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Agenzia delle Entrate — Direzione provinciale di Reggio Calabria

(Request for a preliminary ruling from the Commissione tributaria provinciale di Reggio Calabria)

(Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Article 273 — Tax adjustment — Method of calculating the taxable amount by extrapolation — Right to deduct VAT — Presumption — Principles of neutrality and proportionality — National law basing the calculation of VAT on presumed turnover)

Summary — Judgment of the Court (Fourth Chamber) of 21 November 2018

Harmonisation of fiscal legislation — Common system of value added tax — Taxable amount — National legislation authorising a method of calculating the taxable amount by extrapolation — Admissibility — Conditions — Rebuttable presumption — Possibility of challenging the results obtained by that method — Compliance with the principles of fiscal neutrality and proportionality and the right of defence — Existence of a right to deduct input tax — Verification a matter for the national court

(Council Directive 2006/112)

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, and the principles of fiscal neutrality and proportionality, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which authorises tax authorities, in the event of serious differences between declared revenue and revenue estimated on the basis of sector studies, to use extrapolation, based on such sector studies, in order to determine the amount of turnover achieved by a taxable person and, consequently, to carry out a tax adjustment requiring the payment of additional value added tax (VAT), provided that that legislation and its application enable the taxable person, in compliance with the principles of fiscal neutrality, proportionality and the right of defence, to challenge the results obtained by that method, on the basis of all of the evidence to the contrary available to him, and to exercise his right of deduction in accordance with the provisions in Title X of Directive 2006/2012, which it is for the referring court to verify.

As regards the principle of proportionality, that principle does not preclude national legislation which provides that only significant differences between the amount of turnover declared by the taxable person and the amount calculated by extrapolation, taking account of the turnover achieved by persons carrying out the same activity as that taxable person, can bring into operation the procedure leading to an adjustment. The sector studies used in order to calculate that turnover by extrapolation must be correct, reliable and up to date. Such a difference can give rise only to a rebuttable presumption, which may be rebutted by the taxable person, on the basis of evidence to the contrary.

Thus, the taxable person must, first, be able to challenge both the accuracy of the sector study at issue and/or the relevance of that study for the purposes of the assessment of his specific situation. Second, the taxable person must be in a position to explain why the declared turnover, although lower than the turnover calculated by extrapolation, reflects the actual facts of his activity during the relevant period. In so far as the application of a sector study means that that taxable person must prove, where necessary, negative facts, the principle of proportionality requires that the necessary standard of proof is not excessively high.

(see paras 42, 44, 46, operative part.)