Keywords
Summary

Keywords

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Tax provisions - Harmonization of legislation - Turnover taxes - Common system of value-added tax - Deduction of tax paid on inputs - Right conferred on taxable persons - Limitations - Need for an express Community provision - Legislation limiting the right of deduction in relation to let immovable property

( Council Directive 77/388, Arts 17 to 20 )

Summary

The system for deduction of value-added tax paid on inputs provided for in Articles 17 to 20 of the Sixth Directive is meant to relieve the trader entirely of the tax payable or paid in the course of his economic activities . Any limitation of the right of deduction granted to taxable persons must, in view of its impact on the level of the tax burden, be applied in a similar manner in all the Member States and presupposes the existence of a Community provision expressly authorizing it . In the absence of such a provision, the right of deduction must be exercised immediately in respect of all the taxes charged on transactions relating to inputs .

Legislation which, for undertakings that let immovable property which they have acquired or had built, limits the right of deduction to a fraction of the tax paid on inputs where the amount of the proceeds of the letting of the property is less than a specified percentage of its value is not permitted by, and is therefore incompatible with, the directive .