Case C‑364/17

‘Varna Holideis’ EOOD

v

Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktik’ — Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

(Request for a preliminary ruling from the Administrativen sad — Varna)

(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Supply of immovable property effected prior to the accession of the Republic of Bulgaria to the European Union — Nullity of the contract of sale coming to light after the accession — Obligation to adjust the initial deduction — Interpretation — Jurisdiction of the Court)

Summary — Judgment of the Court (Sixth Chamber), 27 June 2018

Questions referred for a preliminary ruling — Jurisdiction of the Court — Limits — Interpretation of a Community directive in proceedings pre-dating the accession of a Member State to the European Union — Excluded — Deduction of input value added tax performed before the accession of the Member State in question — Appearance, after the accession of the Member State, of factors capable of justifying a requirement to adjust that deduction — No effect

(Art. 267 TFEU; Council Directive 2006/112)

According to settled case-law, the Court has jurisdiction to interpret EU law only as regards their application in a new Member State with effect from the date of that State’s accession to the European Union (order of 11 May 2017, Exmitiani, C‑286/16, not published, EU:C:2017:368, paragraph 12).

It follows, in particular, that the Court does not have jurisdiction to interpret EU directives relating to VAT where the period for recovery of taxes at issue in the main proceedings pre-dates the accession of the Member State concerned to the Union (order of 11 May 2017, Exmitiani, C‑286/16, not published, EU:C:2017:368, paragraph 13).

Therefore, since the obligation to adjust is inextricably linked to the chargeability of the VAT due or paid as input tax and the right to deduct resulting therefrom, the appearance, after the accession of a Member State to the EU, of factors which are, in principle, capable of justifying that obligation does not allow the Court to interpret the VAT Directive if the supply of goods or services concerned is made before that accession.

(see paras 17, 18, 31)