Opinion of Advocate General Wahl delivered on 22 March 2018.

• Jurisdiction: European Union
• Celex Number: 62016CC0648
• ECLI: ECLI:EU:C:2018:213
• Date: 22 March 2018
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-648/16

Provisional text

OPINION OF ADVOCATE GENERAL

WAHL

delivered on 22 March 2018(1)

Case C‑648/16

Fortunata Silvia Fontana

v

Agenzia delle Entrate - Direzione provinciale di Reggio Calabria

(Request for a preliminary ruling from the Commissione tributaria provinciale di Reggio Calabria (Reggio Calabria Provincial Tax Court, Italy))

(Value added tax — Suspected tax evasion — Sectoral studies — Determination of VAT due by dint of inductive methods — Principle of proportionality — Principle of neutrality — Judicial review — Right of defence — Standard of proof)

1. Do the provisions of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (2) and the principles governing the VAT system preclude national legislation that allows the authorities to assess the tax due by a taxpayer presumed to have underdeclared VAT through an inductive method based on sectoral studies which estimate the likely revenues of certain categories of taxpayer?

2. That is, in a nutshell, the question raised by the present proceedings referred by the Commissione tributaria provinciale di Reggio Calabria (Reggio Calabria Provincial Tax Court, Italy).

I. Legal framework

A. EU law

3. Recital 59 of the VAT Directive reads:

‘Member States should be able, within certain limits and subject to certain conditions, to introduce, or to continue to apply, special measures derogating from this Directive in order to simplify the levying of tax or to prevent certain forms of tax evasion or avoidance.’

4. Article 73 of the VAT Directive provides:

‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’

5. Article 242 of the VAT Directive states:

‘Every taxable person shall keep accounts in sufficient detail for VAT to be applied and its application checked by the tax authorities.’

6. Article 244 of the same directive provides:

‘Every taxable person shall ensure that copies of the invoices issued by himself, or by his customer or, in his name and on his behalf, by a third party, and all the invoices which he has received, are stored.’

7. Under the terms of Article 250(1) of the VAT Directive:

‘Every taxable person shall submit a VAT return setting out all the information needed to calculate the tax that has become chargeable and the deductions to be made including, in so far as is necessary for the establishment of the basis of assessment, the total value of the transactions relating to such tax and deductions and the value of any exempt transactions.’

8. Article 273 of the VAT Directive provides:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.

…’

B. National law

9. Article 39 of Decreto del Presidente della Repubblica of 29 September 1973 no. 600 (3) (Presidential Decree No 600/1973) provides:

‘In the case of corporate income of natural persons, the [Tax] Office shall make the adjustment:

…

(d) if the incompleteness, falsehood or inaccuracy of the elements indicated in the declaration and its annexes results from the inspection of the accounting records and other checks referred to in Article 33 or from the check on the completeness, accuracy and veracity of the accounting records on the basis of invoices and other documents relating to the undertaking and of the data and information collected by the [Tax] Office in accordance with Article 32. The existence of undeclared activities or the absence of declared liabilities can also be inferred on the basis of simple presumptions, provided these are serious, precise and consistent.

…’

10. Article 54 of Decreto del Presidente della Repubblica of 26 October 1972 no. 633 (4) (Presidential Decree No 633/1972) provides, in essence, that the verification of the veracity of VAT declarations may be carried out by means of a formal revision of the declaration submitted by the undertaking, or in more detail, on the basis of the information and data available to the tax administration or those collected by the administration under its powers of investigation.

11. Article 62 bis of Decreto-legge of 30 August 1993 no. 331 (5) (Law-Decree No 331/93) states:

‘After consulting the relevant trade and professional bodies, the services of the revenue department of the Ministry of Finance shall draw up … in relation to the various economic sectors, specific sector studies with a view to rendering the assessment process more effective and making it possible to establish in greater detail the presumptive coefficients referred to in Article 11 of Decree-Law No 69 of 2 March 1989 … For that purpose, the services shall identify representative samples of taxpayers in those sectors which may be monitored in order to identify factors characteristic of the activity pursued. The sector studies shall be approved by decree of the Finance Minister …; they may be reviewed and shall be valid for the purposes of assessment as of the 1995 tax year.’

12. Article 62 sexies (3) of Law-Decree No 331/93 states:

‘Assessments under Article 39(1)(d) of [Presidential Decree No 600/1973] and Article 54 of [Presidential Decree No 633/1972] may also be based on the existence of serious inconsistencies between declared income, remuneration and fees and those which may legitimately be inferred from the characteristics and conditions under which the specific activity pursued is exercised, or from the sector studies drawn up pursuant to Article 62 bis of the present decree.’

13. Article 10 of Legge of 8 May 1998 no. 146 (6) (Law No 146/1998) provides:

‘1. The tax assessments based on the sectoral studies … shall apply to taxpayers in accordance with the procedures laid down in this Article when declared income or remuneration is less than the income or remuneration which may be determined on the basis of such studies.

…

3 bis. In the cases referred to in paragraph 1, the [Tax Office] shall, before notifying the tax assessment notice, invite the taxpayer to appear under Article 5 of Legislative Decree No 218 of 19 June 1997.

3 ter. In the event of income inadequacy determined on the basis of the sectoral studies, the reasons justifying the income inadequacy declared to be inappropriate for those resulting from the application of these studies may be certified. The reasons for inconsistencies between the declaration and the economic indicators identified by the abovementioned studies can also be certified. Such a certificate shall be issued at the request of taxpayers …

...

5. For the purposes of [VAT], to the higher income or remuneration, determined on the basis of the said sectoral studies, taking into account the existence of non-taxable transactions or transactions subject to special arrangements, the average rate resulting from the ratio between the tax on taxable transactions and the turnover declared, net of tax on supplies of depreciable goods, and the turnover declared, is applied.

...

7. A commission of experts appointed by the Minister, also taking into account the reports made by professional economic organisations and professional orders, shall be set up by decree of the Ministry of Finance. This commission, before the approval and publication of each sectoral study, shall deliver an opinion on the capacity of these studies to represent the reality to which they refer. …

…’

II. Facts, procedure and the question referred

14. Ms Fortunata Silvia Fontana was subject to a tax adjustment procedure for 2010 of her VAT, inter alia.

15. The Agenzia delle Entrate (the Tax Office, Italy) sent her, on 14 May 2014, an invitation to appear before it, which led to the opening of an inter partes procedure in which Ms Fontana submitted observations and produced documents intended to refute the determinations by which it was presumed that her revenues were higher than those declared. However, the Tax Office did not find the arguments and documents put forward persuasive and, on 24 December 2014, it sent Ms Fontana a tax assessment notice concerning the year 2010 for, inter alia, unpaid VAT.

16. The tax assessment procedure resulted from the application, to Ms Fontana, of the sectoral study relating to the category of accountants and tax advisers.

17. The applicant brought an action before the Commissione tributaria provinciale di Reggio Calabria (Reggio Calabria Provincial Tax Court) contesting, inter alia, the amount of VAT arrears claimed by the Tax Office. In particular, she claimed that the Tax Office had wrongly applied to her situation the sectoral study relating to public accountants and tax consultants, instead of the study relating to human resources management advisers, which she considered to be her main activity. In addition, she argued that the amount of VAT claimed by the Tax Office had merely been determined on the basis of a sectoral study which disregarded the economic activities she had actually carried out.

18. That court, harbouring doubts as to the correct interpretation of EU law, decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Do Articles 113 and 114 TFEU and [the VAT Directive] preclude the Italian domestic legislation...