Judgment of the Court (Fifth Chamber) of 24 November 2022 (request for a preliminary ruling from the Finanzgericht Nürnberg — Germany) — A v Finanzamt M

(Case C-596/21) (1)

(Reference for a preliminary ruling - Taxation - Value added tax (VAT) - Directive 2006/112/EC - Articles 167 and 168 - Right to deduct input VAT - Principle of prohibition of fraud - Chain of supply - Refusal of the right to deduct in the case of fraud - Taxable person - Second purchaser of goods - Fraud affecting part of the VAT due in respect of the first purchase - Scope of the refusal of the right to deduction)

(2023/C 24/15)

Language of the case: German

Referring court

Finanzgericht Nürnberg

Parties to the main proceedings

Applicant: A

Defendant: Finanzamt M

Operative part of the judgment

Articles 167 and 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, read in the light of the principle of the prohibition of fraud,

must be interpreted as meaning that the second purchaser of goods may be refused the benefit of deducting input value added tax (VAT) on the ground that he or she knew or ought to have been aware of the existence of VAT fraud committed by the original seller at the time of the first sale, even if the first purchaser was also aware of that fraud.

Articles 167 and 168 of Directive 2006/112/EC, as amended by Directive 2010/45/EU, read in the light of the principle of the prohibition of fraud,

must be interpreted as meaning that the second purchaser of goods which, at a stage prior to that purchase, were the subject of a fraudulent transaction relating to only part of the value added tax (VAT) which the State is entitled to collect must have the right to deduct the input VAT refused in its entirety where that second purchaser knew or ought to have known that that purchase was linked to fraud.

(1) OJ C 513, 20.12.2021.