Keywords
Summary

Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Deduction by a taxable person having paid that tax in respect of services supplied by another taxable person not registered for that tax – Condition – Invoice drawn up by that supplier containing all the required information

(Council Directive 77/388, Arts 18(1)(a), and 22(3)(b))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Exclusions of right to deduct – Option for Member States to retain exclusions existing on entry into force of the Sixth Directive – National legislation excluding the right to deduct tax paid by a taxable person to another taxable person on the ground that the latter is not registered for that tax – Not permissible

(Council Directive 77/388, Art. 17(6))

Summary

1. Articles 18(1)(a) and 22(3)(b) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment, as amended by Directive 2006/18, must be interpreted as meaning that a taxable person has the right to deduct value added tax paid in respect of services supplied by another taxable person who is not registered for that tax, when the relevant invoices contain all the information required by Article 22(3)(b), in particular the information needed to identify the person who drew up those invoices and to ascertain the nature of the services provided.

If the competent tax authority has the information necessary to establish that the taxable person is, as the recipient of marketing services, liable to VAT, it cannot impose, in relation to the right of that taxable person to deduct input tax, additional conditions that may have the effect of rendering that right ineffective for practical purposes

Accordingly, any failure by the service provider to meet the requirement stated in Article 22(1) of the Sixth Directive cannot call in question the right of deduction to which the recipient of those services is entitled under Article 17(2) of that directive.

(see paras 35-36, 38, operative part 1)

2. Article 17(6) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 2006/18, must be interpreted as precluding national legislation which excludes the right to deduct value added tax paid by a taxable person to another taxable person, who has provided services, when the latter has not registered for the purposes of that tax.

The power granted to the Member States in Article 17(6) of the Sixth Directive does not constitute an unfettered discretion to exclude all, or virtually all, goods and services from the right to deduct value added tax, and thus to render meaningless the system established by the provisions of that Directive. That power does not therefore apply to general exclusions and does not release Member States from the obligation sufficiently to define the goods and services in relation to which the right to deduct is excluded.

(see paras 41, 47, operative part 2)