GST – Sarviz AG Germania v Direktor na Direktsia „Obzhalvane i danachno-osiguritelna praktika“ Plovdiv pri Tsentralno upravlenie na Natisonalnata agentsia za prihodite.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Borg Barthet
• ECLI: ECLI:EU:C:2015:267
• Docket Number: C-111/14
• Date: 23 April 2015
• Procedure Type: Reference for a preliminary ruling

JUDGMENT OF THE COURT (Sixth Chamber)

23 April 2015 ( *1 )

‛Common system of value added tax — Directive 2006/112/EC — Principle of fiscal neutrality — Person liable for payment of VAT — Erroneous payment of VAT by the person to whom the supply is made — Liability to VAT of the supplier of services — Refusal to grant the supplier of services a refund of the VAT’

In Case C‑111/14,

REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Bulgaria), made by decision of 24 February 2014, received at the Court on 7 March 2014, in the proceedings

GST — Sarviz AG Germania

v

Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Plovdiv pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite,

THE COURT (Sixth Chamber),

composed of S. Rodin, President of the Chamber, A. Borg Barthet (Rapporteur) and E. Levits, Judges,

Advocate General: M. Szpunar,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

— the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Plovdiv pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite, by G. Arnaudov, acting as Agent,

— the Bulgarian Government, by E. Petranova and M. Georgieva, acting as Agents,

— the Greek Government, by K. Georgiadis and I. Kotsoni, acting as Agents,

— the European Commission, by S. Petrova and C. Soulay, 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 Articles 193 and 194 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347 p. 1), as amended by Council Directive 2010/88/EU of 7 December 2010 (OJ 2010 L 326, p. 1; ‘the VAT Directive’), and the principle of the neutrality of value added tax (‘VAT’).

2 The request has been made in proceedings between GST — Sarviz AG Germania (‘GST-Sarviz’) and the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Plovdiv pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Director of the ‘Appeals and Tax/Social security’ directorate, Plovdiv, at the Central Administration of the National Revenue Agency; ‘the Director’) concerning the latter’s refusal to refund VAT to GST-Sarviz.

Legal context

EU law

3 Article 193 of the VAT Directive provides: ‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199 and Article 202.’

4 Article 194 of the VAT Directive provides: ‘1. Where the taxable supply of goods or services is carried out by a taxable person who is not established in the Member State in which the VAT is due, Member States may provide that the person liable for payment of VAT is the person to whom the goods or services are supplied. 2. Member States shall lay down the conditions for implementation of paragraph 1.’

Bulgarian law

5 Article 82 of the Bulgarian Law on VAT (Zakon za danak varhu dobavena stoynost, DV No 63, of 4 August 2006), as applicable to the case in the main proceedings (‘the ZDDS’), determines the person liable for VAT in the case of a taxable transaction.

6 Article 82(1) of the ZDDS provides: ‘The tax shall be payable by the supplier/provider of the taxable goods/service who is registered for VAT in accordance with the present law, save in the cases referred to in paragraphs 4 and 5’.

7 In accordance with Article 82(2) of the ZDDS, ‘[w]here the supplier/provider is a taxable person who is not established in the territory of the Republic of Bulgaria and the supply is effected in that territory and is subject to tax, the tax shall be payable by the recipient in the following cases: ... (3) supply of services, where the recipient is a taxable person under Article 3(1), (5) and (6).’

8 In accordance with Article 71(1)(1) of the ZDDS, ‘the taxable person shall exercise his right of deduction where the following conditions are satisfied: … he is in possession of a tax document issued in accordance with the requirements set out in Articles 114 and 115, in which the VAT is stated separately in respect of the supply of goods or services of which he is the purchaser or recipient ...’

9 Article 102(1) of the ZDDS provides: ‘Where the tax authorities conclude that a person has not fulfilled his obligation to apply for registration within the prescribed period, it shall register that person by way of a registration decision if the conditions for registration are satisfied.’

10 Article 129(1), (5) and (7) of the Code of Tax and Social Security Procedures (danachno osiguritelen protsesualen kodeks) provides: ‘1. The offset or refund may be made by the tax authorities on their own initiative or on the written application of the person concerned. The application for offset or refund shall be examined if it has been made within a period of five years from 1 January of the year following the year in which the ground for the refund arose, unless the law otherwise provides. ... 5. The tax authorities must, in accordance with paragraph 2, point 2, within a period of 30 days from the date on which a binding judicial decision or final administrative act is presented to them, fully refund or offset the amounts set out therein, including interest accrued under paragraph 6, where, by virtue of that decision or administrative act, a right is granted in favour of the taxable person to payment of: (1) wrongly or unduly paid or collected amounts relating to taxes, compulsory insurance contributions, fees, fines, pecuniary penalties established, collected or imposed by the tax authorities, including amounts paid on the basis of a written order or written opinion; (2) refunds unlawfully denied; (3) amounts and compensation awarded and costs incurred. ... 7. An appeal shall lie from decisions concerning offsets or refunds in accordance with the rules on appeals against notices of adjustment.’

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

11 In the period from 15 February to 29 December 2010, GST-Sarviz, established in Germany, provided technical and consultancy services to GST Skafolding Bulgaria EOOD (‘GST Skafolding’), which is established in Bulgaria. Proceeding on the basis that GST-Sarviz did not have a fixed establishment in Bulgaria when it supplied its services during the period at issue, GST Skafolding paid the VAT due on the supply of those services under the reverse charge procedure provided for in Article 82(2) of the ZDDS. In that respect, in accordance with Article 117(1) of the ZDDS, GST Skafolding issued protocols relating to the invoices issued by GST-Sarviz, and those protocols were entered in the sales ledger.

12 By a tax adjustment notice of 12 March 2012, the Bulgarian tax authorities found that GST-Sarviz had a fixed establishment within the meaning of paragraph 1(10) of the additional provisions of the ZDDS throughout the period during which it supplied its services to GST Skafolding, and that GST-Sarviz was liable for payment of the VAT in respect of those services. It concluded that GST-Sarviz should have applied to be registered for VAT by 15 February 2010 at the latest. Consequently, the tax authorities considered that GST-Sarviz was liable for the payment of VAT of BGN 224914.89, together with interest on late payment, for the services supplied from 15 February to 29 December 2010.

13 GST-Sarviz paid the sum claimed by the tax authorities on 26 March 2012 and, on 5 September 2012, submitted an application for the tax paid to be offset or refunded on the basis of Article 129(1) of the Code of Tax and Social Security Procedures.

14 In their decision concerning offsets or refunds of 1 October 2012, the tax authorities refused the refund on the ground that the legal conditions for a refund of the VAT were not satisfied in the present case. According to them, since the tax adjustment notice is a valid administrative act, and in the absence of an enforceable court order or relevant administrative decision for the purposes of Article 129(5) of the Code of Tax and Social Security Procedures, the tax paid could not be regarded as being not due and be repaid.

15 GST-Sarviz challenged that decision before the Director. By decision of 21 December 2012, the Director dismissed that challenge, finding that the contested act was lawful on the grounds on which it had been adopted. An action against that decision was brought before the Administrativen sad Plovdiv (Administrative Court, Plovdiv). It too was dismissed for the same reasons as those relied on by the tax authorities. GST-Sarviz lodged an appeal on a point of law with the Varhoven administrativen sad (Supreme Administrative Court).

16 The referring court points out that the tax authorities refused GST Skafolding the right of deduction in respect of the VAT which it had...