Keywords
Summary

Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable persons

(Council Directive 77/388, Art. 4(4), second subpara.)

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Mechanism to simplify declarations and payments of value added tax

(Council Directive 77/388)

Summary

1. The second subparagraph of Article 4(4) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is a provision which, in order to be implemented by a Member State, requires prior consultation by that State of the Advisory Committee on value added tax and the adoption of national legislation authorising persons, in particular companies, established in the territory of the country who, while legally independent, are closely bound to one another by financial, economic and organisational links, no longer to be treated as separate taxable persons for the purposes of value added tax in order to be treated as a single taxable person to whom a single value added tax identification number is allocated and, accordingly, the sole person entitled to submit value added tax declarations. Where there has been no prior consultation of the Advisory Committee on value added tax, national legislation which meets those criteria constitutes legislation adopted in breach of the procedural requirement laid down in the second subparagraph of Article 4(4) of Sixth Directive 77/388.

(see para. 23, operative part 1)

2. The principle of fiscal neutrality does not preclude national legislation which simply treats taxable persons wishing to opt for a mechanism to simplify value added tax declarations and payments differently according to whether the parent company or body has held more than 50% of the share capital or stock of the persons with whom it is linked since at least the beginning of the calendar year preceding that in which the declaration was made or, on the contrary, satisfies those conditions only after that date. Moreover, neither the principle prohibiting the abuse of rights nor the principle of proportionality precludes such legislation.

(see para. 32, operative part 2)