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Document 61986CJ0003

Summary of the Judgment

Judgment of the Court of 28 June 1988.
Commission of the European Communities v Italian Republic.
Failure of a Member State to fulfil its obligations - Sixth VAT Directive, Article 25 (3) and (5) - Flat-rate compensation scheme for beef, pork and milk.
Case 3/86.



Tax provisions - Harmonization of laws - Turnover tax - Common system of value-added tax - Flat-rate scheme for farmers - Application of flat-rate compensation percentages to supplies of goods and services made to recipients themselves subject to the flat-rate scheme or to non-taxable persons - Not permissible .

( Council Directive 77/388, Art . 25 ( 5 ) and ( 8 ) )


The effect of Article 25 ( 5 ) and ( 8 ) of the Sixth Council Directive ( 77/388/EEC ) on the harmonization of the laws of the Member States relating to turnover taxes is that, in the context of the flat-rate scheme for farmers, the flat-rate compensation percentages provided for in Article 25 ( 3 ) should not be applied when goods or services are supplied by a farmer subject to the flat-rate scheme to a farmer to whom the same scheme applies or to a non-taxable person . In such cases compensation for the value-added charge on inputs is obtained by the payment of an all-in price for those goods or services which is deemed to include that charge; thus the invoicing of the flat-rate amount would serve no useful purpose since the buyer and the recipient of the service would be unable to deduct the input tax .