Enel Maritsa Iztok 3 AD v Direktor «Obzhalvane i upravlenie na izpalnenieto» NAP.

• Jurisdiction: European Union
• Celex Number: 62010CJ0107
• ECLI: ECLI:EU:C:2011:298
• Docket Number: C-107/10
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 12 May 2011

Case C-107/10

Enel Maritsa Iztok 3 AD

v

Direktor ‘Obzhalvane i upravlenie na izpalneniet’ NAP

(Reference for a preliminary ruling from the

Administrativen sad Sofia-grad)

(Reference for a preliminary ruling – VAT – Directives 77/388/EEC and 2006/112/EC – Refund – Time-limit – Interest – Set-off – Principles of fiscal neutrality and proportionality – Protection of legitimate expectations)

Summary of the Judgment

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Refund of excess

(Council Directive 2006/112, as amended by Directive 2006/138, Art. 183)

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Refund of excess

(Council Directive 2006/112, as amended by Directive 2006/138, Art. 183)

3. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Refund of excess

(Council Directive 2006/112, as amended by Directive 2006/138, Art. 183)

1. Article 183 of Directive 2006/112 on the common system of value added tax, as amended by Directive 2006/138, in conjunction with the principle of the protection of legitimate expectations, is to be interpreted as precluding national legislation which provides, with retrospective effect, for the extension of the period within which excess value added tax is to be refunded, in so far as that legislation deprives the taxable person of the right enjoyed before the entry into force of the legislation to obtain default interest on the sum to be refunded.

(see para. 41, operative part 1)

2. Article 183 of Directive 2006/112 on the common system of value added tax, as amended by Directive 2006/138, in the light of the principle of fiscal neutrality, is to be interpreted as precluding national legislation under which the normal period for refunding excess valued added tax, at the expiry of which default interest is payable on the sum to be refunded, is extended when a tax investigation is instigated, the effect of the extension being that such interest is payable only from the date on which the investigation is completed, the excess having already been carried forward during the three tax periods following that in which it arose. On the other hand, the fact that the normal period is 45 days is not contrary to that provision.

(see para. 61, operative part 2)

3. Article 183 of the Directive 2006/112 on the common system of value added tax, as amended by Directive 2006/138, is to be interpreted as not precluding the refund of excess valued added tax by way of set-off.

Member States have a certain freedom as regards the conditions for the refund of excess value added tax, provided that the refund is made within a reasonable period of time by a payment in liquid funds or equivalent means and the taxable person is not exposed to any financial risk.

(see paras 64, 67, operative part 3)

JUDGMENT OF THE COURT (Third Chamber)

12 May 2011 (*)

(Reference for a preliminary ruling – VAT – Directives 77/388/EEC and 2006/112/EC – Refund – Time-limit – Interest – Set-off – Principles of fiscal neutrality and proportionality – Protection of legitimate expectations)

In Case C‑107/10,

REFERENCE for a preliminary ruling under Article 267 TFUE from the Administrativen sad Sofia-grad (Bulgaria), made by decision of 15 February 2010, received at the Court on 25 February 2010, in the proceedings

Enel Maritsa Iztok 3 AD

v

Direktor ‘Obzhalvane i upravlenie na izpalnenieto’ NAP,

THE COURT (Third Chamber),

composed of K. Lenaerts, President of the Chamber, D. Šváby, R. Silva de Lapuerta, E. Juhász and T. von Danwitz (Rapporteur), Judges,

Advocate General: Y. Bot,

Registrar: C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 20 January 2011,

after considering the observations submitted on behalf of:

– Enel Maritsa Iztok 3 AD, by L. Ruessmann, avocat, and S. Yordanova, advokat,

– the direktor ‘Obzhalvane i upravlenie na izpalnenieto’ NAP, by A. Georgiev and I. Atanasova Kirova, acting as Agents,

– the Bulgarian Government, by T. Ivanov and E. Petranova, acting as Agents,

– the European Commission, by D. Triantafyllou and S. Petrova, acting as Agents,

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

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 18(4) 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 2006/98/EC of 20 November 2006 (OJ 2006 L 363, p. 129) (‘the Sixth Directive’), and the first paragraph of Article 183 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 2006/138/EC of 19 December 2006 (OJ 2006 L 384, p. 92) (‘the VAT Directive’).

2 The reference was made in proceedings between Enel Maritsa Iztok 3 AD (‘Enel’) and the direktor ‘Obzhalvane i upralvenie na izpalnenieto’ NAP (Director of the ‘Appeals and the Administration of Enforcement’ Office at the Central Administration of the National Revenue Agency) (‘the Direktor’) concerning the relevant date from which default interest on a refund of value added tax (‘VAT’) is payable.

Legal context

European Union law

3 Article 18(2) and (4) of the Sixth Directive provides as follows:

‘2. The taxable person shall effect the deduction by subtracting from the total amount of value added tax due for a given tax period the total amount of the tax in respect of which, during the same period, the right to deduct has arisen and can be exercised under the provisions of paragraph 1.

However, Member States may require that as regards taxable persons who carry out occasional transactions as defined in Article 4(3), the right to deduct shall be exercised only at the time of the supply.

…

4. 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 or carry forward if the amount of the excess is insignificant.’

4 Article 183 of the VAT Directive is worded as follows:

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

However, Member States may refuse to refund or carry forward if the amount of the excess is insignificant.’

5 Article 252 of the VAT Directive provides as follows:

‘1. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.

2. The tax period shall be set by each Member State at one month, two months or three months.

Member States may, however, set different tax periods provided that those periods do not exceed one year.’

National law

6 In accordance with Article 87 of the Law on Value Added Tax (Zakon za danak varhu dobavenata stoynost) (‘the Law on VAT’), the tax period is generally set at one month.

7 Article 92 of the Law on VAT, in the version applicable until 18 December 2007, provided as follows:

‘(1) The tax to be refunded pursuant to Article 88(3) shall be offset, deducted or refunded as follows:

1. If there are other tax debts and debts relating to social security contributions collected by the National Revenue Agency which are due but have not been paid, such debts having arisen prior to the date of submission of the tax return, the revenue authorities shall offset those debts against the tax refund claimed in the tax return; if there is any balance, the procedure set out in subparagraph 2 below shall apply.

2. If there are no other tax debts which are due but have not been paid in accordance with subparagraph 1, or if the total amount of those debts is lower than the tax refund claimed in the tax return, the registered person shall deduct the tax to be refunded or the balance referred to in subparagraph 1 from the tax to be paid as declared in the tax returns for the next three consecutive tax periods.

…

4. If, after expiry of the period referred to in subparagraph 2, there remains a balance of tax to be refunded, the revenue authorities shall offset this balance for the purposes of discharging other tax debts which are due but have not been paid or debts relating to social security contributions collected by the National Revenue Agency, or shall refund the balance within 45 days after submission of the most recent tax return.

…

(8) Tax to be refunded which, without reason or for a reason which has lapsed (including where a notice is set aside), has not been refunded within the periods prescribed in this statute shall be refunded together with statutory default interest, which shall accrue, regardless of the suspension and resumption of any time-limits during tax proceedings, from the date on which the tax should have been refunded in accordance with this statute until it is paid in full. Tax which has not been refunded for a reason which is no longer valid also arises where, after a tax investigation, it is established, in relation to the part to be refunded, that the amount of the tax refund as assessed is equal to or less than the amount declared.’

8 Article 92 of the Law on VAT, in the version in force since 19 December 2007, is worded as follows:

‘…

(8) Notwithstanding the provisions of Article 92(1)(4) and Article 92(3) to (6), where a tax investigation has...