Ferimet SL v Administración General del Estado.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2021:910
• Date: 11 November 2021
• Docket Number: C-281/20
• Celex Number: 62020CJ0281
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Fifth Chamber)

11 November 2021 (*)

(Reference for a preliminary ruling – Taxation – Value added tax (VAT) – Directive 2006/112/EC – Article 168 – Right of deduction – Article 199 – Reverse charge procedure – Principle of fiscal neutrality – Material conditions governing the right to deduct – Supplier’s status as taxable person – Burden of proof – Fraud – Abusive practice – Invoice referring to a fictitious supplier)

In Case C‑281/20,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Supremo (Supreme Court, Spain), made by decision of 11 February 2020, received at the Court on 26 June 2020, in the proceedings

Ferimet SL

v

Administracíon General del Estado,

THE COURT (Fifth Chamber),

composed of E. Regan, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Fifth Chamber, C. Lycourgos, President of the Fourth Chamber, I. Jarukaitis (Rapporteur) and M. Ilešič, Judges,

Advocate General: P. Pikamäe,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– Ferimet SL, by M.A. Montero Reiter, procurador, and F. Juanes Ródenas, abogado,

– the Spanish Government, by S. Jiménez García, acting as Agent,

– the Czech Government, by M. Smolek, J. Vláčil and O. Serdula, acting as Agents,

– the European Commission, by L. Lozano Palacios and J. Jokubauskaitė, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), read in conjunction, where appropriate, with other provisions of that directive, and the principle of fiscal neutrality.

2 The request has been made in proceedings between Ferimet SL and the Administración General del Estado (General Administration of the State, Spain) concerning the right to deduct value added tax (VAT) relating to a supply of recovered materials that was made in 2008.

Legal context

European Union law

3 Article 9(1) of Directive 2006/112 provides:

‘“Taxable person” shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.

Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as “economic activity”. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.’

4 Article 168 of that directive provides:

‘In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay:

(a) the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person;

…’

5 Under Article 178 of that directive:

‘In order to exercise the right of deduction, a taxable person must meet the following conditions:

(a) for the purposes of deductions pursuant to Article 168(a), in respect of the supply of goods or services, he must hold an invoice drawn up in accordance with Articles 220 to 236 and Articles 238, 239 and 240;

…

(f) when required to pay VAT as a customer where Articles 194 to 197 or Article 199 apply, he must comply with the formalities as laid down by each Member State.’

6 Article 199(1) of Directive 2006/112 provides:

‘Member States may provide that the person liable for payment of VAT is the taxable person to whom any of the following supplies are made:

…

(d) the supply of used material, used material which cannot be re-used in the same state, scrap, industrial and non industrial waste, recyclable waste, part processed waste and certain goods and services, as listed in Annex VI;

…’

7 Under the first paragraph of Article 273 of that directive:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.’

Spanish law

8 Article 84(1)(2)(c) of Ley 37/1992 del Impuesto sobre el Valor Añadido (Law on value added tax) of 28 December 1992 (BOE No 312, of 29 December 1992, p. 44247), in the version applicable to the dispute in the main proceedings (‘the VAT Law’) provides that, in the case of supplies of industrial waste, ferrous waste and scrap, residues and other recyclable materials consisting of ferrous and non-ferrous metals, their alloys, slag, ash and industrial residues containing metals or their alloys, the person liable to pay VAT is the trader or professional for whom the taxable transaction is carried out.

9 Under Article 92(1)(3) of the VAT Law, taxable persons may deduct the tax accruing within the country’s territory in respect of input tax charged to them or paid by them on supplies of goods referred to in Article 84(1)(2) of the VAT Law from the VAT due on the taxed transactions they carry out within the country.

10 Article 97 of that law provides:

‘1. The right of deduction may be exercised only by traders or professionals who have documentary evidence of their right.

For those purposes, the only acceptable documentary evidence of the right of deduction is as follows:

…

4º an invoice issued by the taxable person in accordance with the provisions of Article 165(1) of this law. …

2. Any such documents that do not satisfy all the statutory and regulatory requirements shall not be treated as evidence of the right of deduction …

…’

11 Under Article 165(1) of the VAT Law, ‘where Article 84(1)(2) … of this law applies, an invoice issued by the supplier of the goods or services concerned, or the accounting record of the transaction, must be accompanied by a VAT invoice. That invoice must satisfy the requirements laid down in regulations.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

12 Ferimet declared that it had acquired, in 2008, recovered materials (scrap metal) from the company Reciclatges de Terra Alta, stating that the transaction was subject to the reverse charge procedure for VAT and drawing up the corresponding invoice.

13 During an audit, the Inspección de los Tributos (tax inspectorate, Spain) found in particular that the undertaking named on the invoice as the supplier of those materials did not in fact have the material and human resources required to supply them, and concluded that the invoices issued by Ferimet had to be deemed to be false. In its view, while the materials had undeniably been supplied, the transaction in question was a sham, since the real supplier had deliberately been concealed. The tax inspectorate therefore decided that it was not appropriate for a deduction of VAT to be made in relation to that transaction and issued a tax assessment notice in respect of the financial year 2008 for EUR 140 441.71, together with a penalty of EUR 140 737.68.

14 The Tribunal Económico-Administrativo Regional de Cataluña (Regional Tax Tribunal, Catalonia, Spain) dismissed Ferimet’s complaint in respect of that tax assessment notice and the penalty, whereupon Ferimet brought an action against that dismissal in the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia, Spain). In that court, Ferimet claimed that it was an established fact that the purchase of the recovered materials had taken place, that the naming of a fictitious supplier on an invoice was a purely formal issue given that, in material terms, the acquisition had taken place, that the right to deduct VAT cannot be refused where the transaction is shown to exist, and that the reverse charge procedure applied in the present case ensures not only that the VAT is collected and monitored, but also that there is no possible tax advantage to the taxpayer.

15 By a judgment of 23 November 2017, the Tribunal Superior de Justicia de Cataluña (High Court of Justice, Catalonia) dismissed Ferimet’s action on the grounds that the tax inspection had clearly demonstrated that the supplier was a sham, that the naming of that supplier could not be considered a purely formal matter, as it enables the lawfulness of the VAT chain to be checked, and that it therefore has an impact on the principle of tax neutrality. The court also noted that, while it is true that, under the reverse charge procedure, in principle there is no loss of tax revenue, the right to deduct VAT is nevertheless subject to material conditions being met, including a condition that the person mentioned should actually be the supplier.

16 Ferimet then lodged an appeal in the Tribunal Supremo (Supreme Court, Spain), the referring court, before which it argues that national and EU legislation as well as the case-law of the Court of Justice necessarily lead to the conclusion that it was entitled to deduct the VAT relating to the acquisition of the recovered materials concerned. It claims, in that regard, that it was the genuine customer for the supply of those materials, that it did indeed purchase and receive them, and that there had not and could not have been any loss of tax revenue because, being subject to the reverse charge procedure, neither it nor its supplier were liable to pay VAT.

17 The Spanish Government contends before that court that the mention of a fictitious supplier on an invoice...