Opinion of Advocate General Kokott delivered on 21 January 2021.

• Jurisdiction: European Union
• Celex Number: 62019CC0844
• ECLI: ECLI:EU:C:2021:58
• Date: 21 January 2021
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 21 January 2021 (1)

Case C‑844/19

CS,

Finanzamt Graz-Stadt

Interveners:

Finanzamt Judenburg Liezen,

technoRent International GmbH

(Request for a preliminary ruling from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria))

(Request for a preliminary ruling – Taxation – VAT – Directive 2006/112/EC – Article 183 – Refund of excess VAT – Payment of interest in the case of a subsequent increase of excess VAT or a subsequent reduction of tax liability – No national implementing measures – Direct effect of a directive – Application by analogy of a non-relevant directive – Refund Directive (Directive 2008/9/EC) – Article 27 – Interpretation of national law in conformity with EU law)

I. Introduction

1. The present case raises the question whether the VAT Directive grants the taxable person a direct entitlement to interest on excess value added tax (VAT) paid out only subsequently or on an entitlement to a tax refund paid out only subsequently. According to the referring court, the Republic of Austria has not provided for any such rule on interest in respect of VAT. The existing rules on interest for other forms of taxation could not be interpreted in conformity with EU law and applied to VAT.

2. However, another directive (the Refund Directive) provides for a directly applicable entitlement to interest on excess VAT subsequently refunded to taxable persons established in another Member State who have not carried out any domestic transactions. The question is whether that directive may be applied by analogy in this case.

3. Even if that is not so, and a directly applicable entitlement to interest cannot be inferred from the VAT Directive, the Court can possibly still provide further useful guidance which is helpful in achieving a resolution of the dispute in conformity with EU law.

II. Legal framework

A. EU law

4. Article 90 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (2) (‘the VAT Directive’) concerns the reduction of the taxable amount and provides:

‘1. In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the Member States.

2. In the case of total or partial non-payment, Member States may derogate from paragraph 1.’

5. Article 183 of the VAT Directive states:

‘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.’

6. Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112/EC (3) (‘the Refund Directive’), concerns the arrangements for the refund of input tax to taxable persons not established in the Member State of refund who have not carried out any transactions there.

7. Article 27 of the Refund Directive concerns payment of interest in respect of the abovementioned entitlement to a refund and provides:

‘1. Interest shall be calculated from the day following the last day for payment of the refund pursuant to Article 22(1) until the day the refund is actually paid.

2. Interest rates shall be equal to the interest rate applicable with respect to refunds of VAT to taxable persons established in the Member State of refund under the national law of that Member State.

If no interest is payable under national law in respect of refunds to established taxable persons, the interest payable shall be equal to the interest or equivalent charge which is applied by the Member State of refund in respect of late payments of VAT by taxable persons.’

B. Austrian law

8. In Austria, the taxable person’s entitlement to interest is governed by the Bundesgesetz über allgemeine Bestimmungen und das Verfahren für die von den Abgabenbehörden des Bundes, der Länder und Gemeinden verwalteten Abgaben (Federal Law laying down general provisions and the procedure for the taxes administered by the federal, regional and municipal tax authorities, Bundesabgabenordnung (Federal Tax Code), BAO).

9. Paragraph 205 of the BAO concerns the taxable person’s entitlement to interest in respect of entitlements to refunds in income tax and corporation tax:

‘(1) Differences in income tax and corporation tax arising from tax notices in disregard of initial payments (subparagraph 3), after comparison with advance payments or with the previously fixed tax, shall bear interest for the period from 1 October of the year following the year in which the tax became chargeable until the date of publication of those notices (interest on tax deferral). This shall apply mutatis mutandis to differences arising from

(a) cancellations of tax notices, …

(2) Annual interest on tax deferral shall amount to 2% above the base interest rate. Interest on tax deferral which is less than the sum of EUR 50 shall not be applied. Interest on tax deferral shall be applied for a maximum period of 48 months. …’

10. Paragraph 205a of the BAO has, since 1 January 2012, covered the taxable person’s entitlement to interest on overpaid taxes where, following an appeal, they are subsequently lower than the amount originally fixed and states:

‘(1) Where a previously paid tax liability the amount of which depends directly or indirectly on the resolution of an appeal against a notice is reduced, interest shall be applied, at the request of the person liable for tax, for the period from payment until publication of the notice or decision reducing the tax (appeal interest). …

(4) Annual interest shall amount to 2% above the base interest rate. Interest which is less than the sum of EUR 50 shall not be applied.’

III. Main proceedings

11. The request for a preliminary ruling is based on two different appeals on a point of law before the referring court.

– The first appeal on a point of law (Ro 2017/15/0035)

12. In his turnover tax return for August 2007, CS, the applicant in the first case (‘applicant 1’), claimed excess VAT of EUR 60 689.28. However, the tax office determined that excess only in the amount of EUR 14 689.28. Applicant 1 successfully challenged that decision before the courts. The excess VAT was ‘paid out’ to him in full on 22 May 2013.

13. On 30 May 2013, applicant 1 applied for the interest payable on that excess VAT, pursuant to Paragraph 205a of the BAO, for the period from the entry into force of that provision (1 January 2012) until performance on 22 May 2013. The tax office rejected that application. Applicant 1 unsuccessfully brought an action against that decision at the Bundesfinanzgericht (Federal Finance Court, Austria).

14. The Bundesfinanzgericht based the rejection on the ground that Paragraph 205a of the BAO does not cover the case of excess VAT successfully recovered through an action, but only a successful judicial challenge of a tax liability that has been fixed and paid in too high an amount. Applicant 1 has brought an appeal on a point of law against that decision.

– The second appeal on a point of law (Ro 2018/15/0026)

15. The applicant in the second case (technoRent International, ‘applicant 2’) is an undertaking established in Germany. It sold machines in Austria in 2003 and 2004 and paid turnover tax on those transactions in Austria. In 2005, in its turnover tax return for the month of May 2005, applicant 2 claimed a turnover tax credit in the amount of EUR 367 081.58. This was against the background of a subsequent reduction of the consideration in accordance with Article 90 of the VAT Directive, in all likelihood because some of the machines were not paid for or were not paid for in full.

16. That reduction of the taxable amount was assessed by the authorities (from July 2006 to June 2008). The credit was initially ‘paid out’ to applicant 2 on 10 March 2008. However, at the end of the assessment, the tax office took the view that the reduction of the taxable amount should not be made. By notice of 13 October 2008, the tax office therefore fixed an additional assessment in the amount of EUR 367 081.58. The action brought against that turnover tax notice was successful.

17. In October 2013, applicant 2 claimed interest on the sum of EUR 367 081.58 for the period from July 2005 to May 2013. In respect of that claim, the tax office decided that an entitlement to interest (in the amount of EUR 10 021.32) arose only for the period from 1 January 2012 to 8 April 2013 pursuant to Paragraph 205a of the BAO. An appeal brought against that decision was upheld in part by the court on 29 May 2017, in so far as it also awarded applicant 2 default interest for the period from 2 September 2005 to 9 March 2008. The appeal on a point of law brought by the tax office against that decision is directed exclusively against the award of default interest for the period from 2 September 2005 to 9 March 2008.

IV. Request for a preliminary and procedure before the Court

18. The Verwaltungsgerichtshof (Supreme Administrative Court, Austria), which has jurisdiction to hear both appeals on a point of law, considers that it is unable to interpret the rules on interest contained in Paragraphs 205 and 205a of the BAO in conformity with EU law and, by order of 24 October 2018, has thereupon referred the following questions to the Court for a preliminary ruling:

‘(1) Is there a rule with direct effect under EU law that grants a taxpayer to whom the tax office, in circumstances such as those in the main proceedings, has not refunded a turnover tax credit in good time entitlement to interest for late payment, with the result that he can claim that entitlement before the tax...