Keywords
Summary

Keywords

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax — Capital goods — Adjustment of the deduction originally made – Conditions for the application of Article 20 of the Sixth Directive — Acquisition of goods by a body governed by public law as a public authority within the meaning of the first subparagraph of Article 4(5) of the directive — Sale of those goods by the same body as a taxable person — Right to adjustment excluded

(Council Directive 77/388, Arts 4(5) and 20)

Summary

A body governed by public law which purchases capital goods as a public authority within the meaning of the first subparagraph of Article 4(5) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, that is to say as a non-taxable person, and subsequently sells those goods as a taxable person, is not entitled, in respect of that sale, to a right of adjustment based on Article 20 of that directive in order to deduct the value added tax paid on the purchase of those goods.

Only the capacity in which the body is acting at the time of purchase of the goods can determine the existence of a right to deduct.

(see paras 38, 44, operative part)