Keywords
Summary

Keywords

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1 . Tax provisions -Harmonization of laws -Turnover tax -Common system of value-added tax -Taxable transactions -Private use of business goods where the VAT on such goods was not deductible -Taxation of the depreciation of the goods -Not permitted -Taxation of supplies of goods and services for the maintenance or use of the goods, in respect of which the VAT was deductible -Permitted

( Council Directive 77/388/EEC, Art . 6(2)(a ) )

2 . Tax provisions -Harmonization of laws -Turnover tax -Common system of value-added tax -Taxable transactions -Private use of business goods where the VAT on such goods was not deductible -Member States' power to derogate from the rule prohibiting taxation in such cases -None

( Council Directive 77/388/EEC, Art . 6(2 ), second sentence )

3 . Tax provisions -Harmonization of laws -Turnover tax -Common system of value-added tax -Taxable transactions -Private use of business goods where the VAT on such goods was not deductible -Taxation not permitted -Relevant provision may be relied on by individuals

( Council Directive 77/388/EEC, Art . 6(2)(a ) )

Summary

1 . Article 6(2)(a ) of the Sixth Directive ( 77/388/EEC ) on the harmonization of the laws of the Member States relating to turnover taxes must be interpreted as precluding taxation of the depreciation of business goods in respect of their private use where the VAT on such goods was not deductible because they were purchased from a non-taxable person .

Taxation of the depreciation of the goods is also prohibited where, although the taxable person was not able to deduct the VAT in respect of the supply of the goods to him, he was none the less able to deduct the VAT on the supplies of goods and services which he sought and obtained from other taxable persons for the maintenance or use of the goods . In such a case, it is consistent with the common system of value-added tax to tax the expenses incurred for the maintenance and use of the goods, since such a solution avoids not only the double taxation of the goods themselves but also the non-taxation of final use .

2 . The power to derogate conferred on the Member States by the second sentence of Article 6(2 ) of the Sixth Directive does not allow them to tax the private use of business goods where the VAT on such goods was not wholly or partly deductible .

3 . Article 6(2 ) of the Sixth Directive may be relied on by a taxable person before the courts of a Member State in so far as that provision precludes taxation of the private use of business goods where the VAT on those goods was not wholly or partly deductible .