Imofloresmira - Investimentos Imobiliários SA v Autoridade Tributária e Aduaneira.

• Jurisdiction: European Union
• Celex Number: 62016CJ0672
• ECLI: ECLI:EU:C:2018:134
• Date: 28 February 2018
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-672/16

Provisional text

JUDGMENT OF THE COURT (Seventh Chamber)

28 February 2018 (*)

(Reference for a preliminary ruling — Value added tax — TVA Directive — Exemption of the leasing and letting of immovable property — Right of option available to taxpayers — Implementation by the Member States — Deduction of input tax — Use for the purposes of the taxable person’s taxed transactions — Adjustment of the initial deduction — Not permissible)

In Case C-672/16,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD) (Tax Arbitration Tribunal (Centre for Administrative Arbitration), Portugal), made by decision of 16 December 2016, received at the Court on 29 December 2016, in the proceedings

Imofloresmira — Investimentos Imobiliários SA

v

Autoridade Tributária e Aduaneira,

THE COURT (Seventh Chamber),

composed of A. Rosas (Rapporteur), President of the Chamber, C. Toader and E. Jarašiūnas, Judges,

Advocate General: P. Mengozzi,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– Imofloresmira — Investimentos Imobiliários SA, by S. Neto, advogada, and by J. Magalhães Ramalho, advogado,

– the Portuguese Government, by L. Inez Fernandes, M. Figueiredo and R. Campos Laires, acting as Agents,

– the European Commission, by F. Clotuche-Duvieusart and by B. Rechena, 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, preliminary ruling concerns the interpretation of Articles 137, 167, 168, 184, 185 and 187 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).

2 The request has been made in proceedings between Imofloresmira — Investimentos Imobiliários SA (‘Imofloresmira’) and the Autoridade Tributária e Aduaneira (tax and customs authority, Portugal), concerning the adjustment of deductions of value added tax (VAT) made by Imofloresmira in the course of its activities of buying, selling, letting and managing immovable property.

Legal context

EU law

3 Article 18, in Chapter 1 entitled ‘Supply of goods’, of Title IV entitled ‘Taxable Transactions’, of the VAT Directive provides:

‘Member States may treat each of the following transactions as a supply of goods for consideration:

(a) the application by a taxable person for the purposes of his business of goods produced, constructed, extracted, processed, purchased or imported in the course of such business, where the VAT on such goods, had they been acquired from another taxable person, would not be wholly deductible;

...’

4 Article 27, in Chapter 3 entitled ‘Supply of services’, of Title IV of that directive provides:

‘In order to prevent distortion of competition and after consulting the VAT Committee, Member States may treat as a supply of services for consideration the supply by a taxable person of a service for the purposes of his business, where the VAT on such a service, were it supplied by another taxable person, would not be wholly deductible.’

5 In accordance with Article 135(1)(l), in Chapter 3 entitled ‘Exemptions for other activities’, of Title IX entitled ‘Exemptions’, of the VAT Directive, Member States are to exempt ‘the leasing or letting of immovable property’ from VAT.

6 Articles 137(1), also in Chapter 3 of that directive, permits Member States to give taxpayers the right to opt for the taxation of certain transactions, including those referred to in Article 135(1)(l) of that directive. Article 137(2) of that directive stipulates that Member States are to lay down the detailed rules governing exercise of the option under paragraph 1 of that article and that they may restrict the scope of that right.

7 Under Article 167, in Chapter 1 entitled ‘Origin and scope of the right of deduction’, of Title X entitled ‘Deductions’, of the VAT Directive, ‘a right of deduction shall arise at the time the deductible tax becomes chargeable’.

8 Article 168, which is in the same chapter 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;

(b) the VAT due in respect of transactions treated as supplies of goods or services pursuant to Article 18(a) and Article 27;

...’

9 Article 176 of that directive, in Chapter 3 entitled ‘Restrictions on the right of deduction’, of Title X, provides:

‘The Council, acting unanimously on a proposal from the Commission, shall determine the expenditure in respect of which VAT shall not be deductible. VAT shall in no circumstances be deductible in respect of expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.

...’

10 Article 184 of the VAT Directive, in Chapter 5 entitled ‘Adjustment of deductions’ of Title X, provides that ‘the initial deduction is to be adjusted where it is higher or lower than that to which the taxable person was entitled’.

11 Article 185(1), in Chapter 5 of that directive, states:

‘Adjustment shall, in particular, be made where, after the VAT return is made, some change occurs in the factors used to determine the amount to be deducted, for example where purchases are cancelled or price reductions are obtained.’

12 Article 187, in Chapter 5 of that directive, provides:

‘1. In the case of capital goods, adjustment shall be spread over five years including that in which the goods were acquired or manufactured.

Member States may, however, base the adjustment on a period of five full years starting from the time at which the goods are first used.

In the case of immovable property acquired as capital goods, the adjustment period may be extended up to 20 years.

2. The annual adjustment shall be made only in respect of one-fifth of the VAT charged on the capital goods, or, if the adjustment period has been extended, in respect of the corresponding fraction thereof.

The adjustment referred to in the first subparagraph shall be made on the basis of the variations in the deduction entitlement in subsequent years in relation to that for the year in which the goods were acquired, manufactured or, where applicable, used for the first time.’

Portuguese law

13 Article 12, entitled ‘Waiver of the exemption’ of the Código do Imposto sobre o Valor Acrescentado (Value Added Tax Code, ‘the CIVA’) provides in paragraphs 4, 6 and 7:

‘4 — Taxable persons who lease properties or lots thereof to other taxable persons who use them wholly or mainly for activities giving rise to a right of deduction may waive the exemption referred to in Article 9(29).

...

6 — The detailed rules and conditions for the waiver of the exemption provided for in paragraphs 4 and 5 shall be laid down in special legislation.

7 — The right to deduct the tax in those cases shall be governed by the rules laid down in Articles 19 et seq., subject to the provisions laid down in any special regulations.’

14 Article 24 of the CIVA, entitled ‘Adjustments of deductions in respect of fixed assets’, provides in paragraphs 2, 3, 5 and 6:

‘2 — The deductions shall be adjusted annually on expenditure on investment in immovable property if there is a positive or negative difference equal to or greater than five percentage points between the final percentage referred to in the previous article, applicable during the year of the occupation of the property and of each of the subsequent 19 calendar years, and that which was determined during the year of acquisition or the completion of the works.

3 — For the adjustment of deductions in respect of fixed assets, referred to in the preceding paragraphs, the procedure to be adopted is as follows:

(a) at the end of the year in which the use or occupation of the property began and in each of the 4 or 19 subsequent calendar years, as the case may be, it will be necessary to calculate the amount of the deduction which would apply if the acquisition of, or the completion of the works at, the immovable property had taken place during the year in question, in accordance with the final percentage for that year;

(b) the amount thus obtained shall be subtracted from the deduction made in the year in which the acquisition took place or from the sum of the deductions made until the year in which the works undertaken at the immovable property were completed;

(c) the positive or negative difference shall be divided by 5 or 20, as the case may be, with the result thus obtained corresponding to the amount to be paid or to the additional deduction to be made in the year in question.

...

5 — Where fixed assets are transferred during the period of adjustment, that adjustment shall be made only once for the unexpired period, to the extent that those assets are to be used for an activity which is taxed in full in the year in which the transfer takes place and in the subsequent years until the adjustment period expires. However, if the transfer is exempt from tax by virtue of Article 9(30) or (32), the property shall be deemed to be used for an activity that is not taxed and, in the former case, the relevant adjustment shall be made.

6 — The adjustment provided for in the previous paragraph shall also apply, to the extent that those assets are to be used for an activity that is not taxed in the case of immovable property for which there was an initial...