Staatssecretaris van Financiën v X (C-536/08) and fiscale eenheid Facet BV / Facet Trading BV (C-539/08).

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Date: 22 April 2010

Joined Cases C-536/08 and C-539/08

Staatssecretaris van Financiën

v

X

and

fiscale eenheid Facet BV-Facet Trading BV

(References for a preliminary ruling from the

Hoge Raad der Nederlanden)

(Sixth VAT Directive – Article 17(2) and (3) – Article 28b(A)(2) – Right to deduction – Transitional arrangements for the taxation of trade between Member States – Place of the intra-Community acquisitions of goods)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Transitional arrangements for the taxation of trade between Member States

(Council Directive 77/388, Arts 17(2) and (3), and 28b(A)(2))

Articles 17(2) and (3) and 28b(A)(2) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 92/111, must be interpreted as meaning that a taxable person coming within the situation referred to in the first subparagraph of Article 28b(A)(2) does not have the right immediately to deduct the input value added tax charged on an intra-Community acquisition.

Since the goods taxed as intra-Community acquisitions deemed to have been made in the Member State which issued the identification number, in accordance with the first subparagraph of Article 28b(A)(2) of the Sixth Directive, did not actually enter that Member State, those transactions cannot be regarded as giving rise to a ‘right to deduct’ within the meaning of Article 17 of the Sixth Directive, which makes deduction of the input value added tax charged on intermediary goods and services acquired by a taxable person, inter alia within the context of intra-Community acquisitions, subject to the condition that the goods and services thus acquired are to be used for the purpose of the taxable person’s taxable transactions. Consequently, such intra-Community acquisitions cannot benefit from the general regime of deduction set out in that article.

In that regard, the general regime for the deduction of tax, as set out in Article 17 of the Sixth Directive, is not intended to replace, in such a situation, the specific regime referred to in the second subparagraph of Article 28b(A)(2) of that directive, which is based on the mechanism of reducing the taxable amount in order to make it possible to correct the double taxation.

(see paras 40-43, 45, operative part)

JUDGMENT OF THE COURT (Third Chamber)

22 April 2010 (*)

(Sixth VAT Directive – Article 17(2) and (3) – Article 28b(A)(2) – Right to deduction – Transitional arrangements for the taxation of trade between Member States – Place of the intra-Community acquisitions of goods)

In Joined Cases C‑536/08 and C‑539/08,

REFERENCES for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decisions of 14 November 2008, received at the Court on 4 December 2008, in the proceedings

Staatssecretaris van Financiën

v

X (C-536/08),

and

fiscale eenheid Facet-Facet Trading (C-539/08),

THE COURT (Third Chamber),

composed of K. Lenaerts, President of the Chamber, R. Silva de Lapuerta, G. Arestis (Rapporteur), J. Malenovský and T. von Danwitz, Judges,

Advocate General: J. Mazák,

Registrar: C. Strömholm, Administrator,

having regard to the written procedure and further to the hearing on 19 November 2009,

after considering the observations submitted on behalf of:

– fiscale eenheid Facet-Facet Trading, by H.W.M. van Kesteren and M.A.J. Raafs, advocaten,

– the Netherlands Government, by C. Wissels, M. Noort and M. de Grave, acting as Agents,

– the Belgian Government, by M. Jacobs and J.-C. Halleux, acting as Agents,

– the Commission of the European Communities, by D. Triantafyllou and C. ten Dam, acting as Agents,

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

gives the following

Judgment

1 The present references for a preliminary ruling concern the interpretation of Articles 17(2) and (3) and 28b(A)(2) 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 92/111/EEC of 14 December 1992 (OJ 1992 L 384, p. 47) (‘the Sixth Directive’).

2 The references have been made in the course of proceedings between the Staatssecretaris van Financiën (State Secretary for Finance) (‘the Staatssecretaris’) and X and between the Staatssecretaris and Facet-Facet Trading (‘Facet’) in the context of additional assessments for value added tax (‘VAT’).

Legal context

Community legislation

3 Article 17(1) to (3) of the Sixth Directive provides:

‘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:

…

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

3. Member States shall also grant to every taxable person the right to a deduction or refund of the value added tax referred to in paragraph 2 in so far as the goods and services are used for the purposes of:

(a) transactions relating to the economic activities referred to in Article 4(2) carried out in another country, which would be eligible if they had been performed in the territory of the country;

(b) transactions which are exempt pursuant to Article 14(1)(i), 15, 16(1)(B), (C), (D) or (E) or (2) or 28c(A) and (C);

(c) any of the transactions exempted under Article 13B(a) and (d)(1) to (5), when the customer is established outside the Community or when those transactions are directly linked with goods to be exported to a country outside the Community.’

4 Article 28a(1)(a) of the Sixth Directive provides:

‘The following shall also be subject to value added tax:

(a) intra-Community acquisitions of goods for consideration within the territory of the country by a taxable person acting as such or by a non-taxable legal person where the vendor is a taxable person acting as such who is not eligible for the tax exemption provided for in Article 24 and who is not covered by the arrangements laid down in the second sentence of Article 8(1)(a) or in Article 28b(B)(1).’

5 Article 28a(3) of the Sixth Directive provides:

‘“Intra-Community acquisition of goods” shall mean acquisition of the right to dispose as owner of movable tangible property dispatched or transported to the person acquiring the goods by or on behalf of the vendor or the person acquiring the goods to a Member State other than that from which the goods are dispatched or transported.’

6 Article 28b(A) of the Sixth Directive provides:

‘1. The place of the intra-Community acquisition of goods shall be deemed to be the place where the goods are at the time when dispatch or transport to the person acquiring them ends.

2. Without prejudice to paragraph 1, the place of the intra-Community acquisition of goods referred to in Article 28a(1)(a) shall, however, be...