Commission of the European Communities v Italian Republic.

• Jurisdiction: European Union
• Celex Number: 62000CJ0078
• ECLI: ECLI:EU:C:2001:579
• Court: Court of Justice (European Union)
• Docket Number: C-78/00
• Procedure Type: Recurso por incumplimiento – fundado
• Date: 25 October 2001

Avis juridique important

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62000J0078

Judgment of the Court (Fifth Chamber) of 25 October 2001. - Commission of the European Communities v Italian Republic. - Failure by a Member State to fulfil its obligations - Articles 17 and 18 of the Sixth VAT Directive - Issue of Government bonds to refund excess VAT - Category of taxable persons whose tax position is in credit. - Case C-78/00.

European Court reports 2001 Page I-08195

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Deduction of input tax - Refund of excess - Refund by the issue of Government bonds - Not permissible

(Council Directive 77/388, Arts 17 and 18(4))

Summary

$$A Member State which provides for the refund of excess VAT by the issue of Government bonds to a category of taxable persons whose tax position is in credit fails to fulfil its obligations under Articles 17 and 18 of Sixth Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes.

The conditions for a refund that a Member State sets under Article 18(4) of the Sixth Directive must enable the taxable person, in appropriate conditions, to recover the entirety of the credit arising from that excess tax, which implies that the refund is carried out within a reasonable period of time by a payment in liquid funds or equivalent means; the method of refund adopted must not, in any event, entail any financial risk for the taxable person.

( see paras 34, 39 and operative part )

Parties

In Case C-78/00,

Commission of the European Communities, represented by E. Traversa, acting as Agent, with an address for service in Luxembourg,

applicant,

v

Italian Republic, represented by U. Leanza, acting as Agent, assisted by G. De Bellis, avvocato dello Stato, with an address for service in Luxembourg,

defendant,

APPLICATION for a declaration that, by providing that the category of taxable persons whose tax position for 1992 is in credit be belatedly issued with Government bonds instead of refunds of value added tax, the Italian Republic has failed to fulfil its obligations under Articles 17 and 18 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 95/7/EC of 10 April 1995 amending Directive 77/388/EEC and introducing new simplification measures with regard to value added tax - scope of certain exemptions and practical arrangements for implementing them (OJ 1995 L 102, p. 18),

THE COURT (Fifth Chamber),

composed of: S. von Bahr (Rapporteur), President of the Fourth Chamber, acting as President of the Fifth Chamber, D.A.O. Edward, A. La Pergola, M. Wathelet and C.W.A. Timmermans, Judges,

Advocate General: J. Mischo,

Registrar: R. Grass,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 7 June 2001,

gives the following

Judgment

Grounds

1 By application lodged at the Registry of the Court on 2 March 2000 the Commission of the European Communities brought proceedings under Article 226 EC seeking a declaration that, by providing that the category of taxable persons whose tax position for 1992 is in credit be belatedly issued with Government bonds instead of refunds of value added tax (VAT), the Italian Republic has failed to fulfil its obligations under Articles 17 and 18 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 95/7/EC of 10 April 1995 amending Directive 77/388/EEC and introducing new simplification measures with regard to value added tax - scope of certain exemptions and practical arrangements for implementing them (OJ 1995 L 102, p. 18, the Sixth Directive)

Community law

2 Article 17(1) and (2) of the Sixth Directive provide as follows:

1. The right to deduct shall arise at the time when the deductible tax becomes chargeable.

2. In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

(a) value added tax due or paid within the territory of the country in respect of goods or services supplied or to be supplied to him by another taxable person;

(b) value added tax due or paid in respect of imported goods;

(c) value added tax due under Articles 5(7)(a), 6(3) and 28a(6);

(d) value added tax due under Article 28a(1)(a).

3 Article 18(4) of the Sixth Directive provides:

Where for a given tax period the amount of authorised deductions exceeds the amount of tax due, the Member States may either make a refund or carry the excess forward to the following period according to conditions which they shall determine.

However, Member States may refuse to refund...