Judgment of the Court (Second Chamber) of 13 March 2014 (request for a preliminary ruling from the Administrativen sad Veliko Tarnovo — Bulgaria) — FIRIN OOD v Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

(Case C-107/13) (1)

((Common system of value added tax - Deduction of input tax paid - Payments made on account - Refusal to allow the deduction - Fraud - Adjustment of the deduction in the case where the taxable transaction is not carried out - Conditions))

2014/C 135/15

Language of the case: Bulgarian

Referring court

Administrativen sad Veliko Tarnovo

Parties to the main proceedings

Applicant: FIRIN OOD

Defendant: Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Veliko Tarnovo pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

Re:

Request for a preliminary ruling — Administrativen sad Veliko Tarnovo — Interpretation of Article 168(a), read in conjunction with Articles 65, 90(1) and 185(1), and of Article 205, read in conjunction with Articles 168(a) and 193, of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — Principles of the neutrality of VAT, effectiveness and proportionality — Deduction of input tax paid — Payment made on account in respect of precisely identified goods prior to the supply — Refusal to allow the deduction at the time of receipt of the payment on account since supply not made — Possibility for the supplier to adjust the deduction initially made and impact on the refusal to allow such a deduction — Refusal to allow the recipient of a supply to deduct VAT because of the joint and several liability for payment of the tax of a taxable person other than the person liable — Designation of the person jointly and severally liable on the basis of presumptions founded on established precepts of civil law.

Operative part of the judgment

Articles 65, 90(1), 168(a), 185(1) and 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as requiring that the deduction of value added tax made by the recipient of an invoice drawn up with a view to a payment being made on account in relation to the supply of goods be adjusted where, in circumstances such as those in the main proceedings, that supply is ultimately not made, even if the supplier remains liable for that tax and has not refunded the payment made on account.

(1)  OJ C 129, 4.5.2013.