Alicja Sosnowska v Dyrektor Izby Skarbowej we Wrocławiu Ośrodek Zamiejscowy w Wałbrzychu.

• Jurisdiction: European Union
• Celex Number: 62007CC0025
• ECLI: ECLI:EU:C:2008:120
• Date: 26 February 2008
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-25/07

OPINION OF ADVOCATE GENERAL

Mazák

delivered on 26 February 2008 (1)

Case C‑25/07

Alicja Sosnowska

v

Dyrektor Izby Skarbowej we Wrocławiu Ośrodek Zamiejscowy w Wałbrzychu

(Reference for a preliminary ruling from the Wojewódzki Sąd Administracyjny we Wrocławiu (Poland))

(Taxation – VAT – Council Directives 67/227/EEC and 77/388/EEC – National legislation laying down rules for refunds of excess VAT – Principles of fiscal neutrality and proportionality)

1. The present reference for a preliminary ruling from the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wroclaw) (Poland) seeks an interpretation of the third paragraph of Article 5 EC, in conjunction with Article 2 of the First VAT Directive (2) as well as with Articles 18(4) and 27(1) of the Sixth VAT Directive. (3)

2. In particular, the referring court harbours doubts as to whether provisions of Polish law laying down a period for repayment of an excess of input tax over that due (‘excess VAT’) to the bank account of EU VAT payers (4) during the first 12 months of their registration and the conditions governing the shortening of that period are compatible with Community law.

I – Legal framework

A – Community law

3. The third paragraph of Article 5 EC provides that ‘[a]ny action by the Community shall not go beyond what is necessary to achieve the objectives of this Treaty’.

4. Article 2 of the First Directive states as follows:

‘The principle of the common system of [VAT] involves the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged.

On each transaction, [VAT], calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of [VAT] borne directly by the various cost components.

The common system of [VAT] shall be applied up to and including the retail trade stage.’

5. Article 18(4) of the Sixth Directive provides as follows:

‘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.

…’

6. Finally, under the terms of Article 27(1) of the Sixth Directive:

‘The Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce special measures for derogation from the provisions of this Directive, in order to simplify the procedure for charging the tax or to prevent certain types of tax evasion or avoidance. Measures intended to simplify the procedure for charging the tax, except to a negligible extent, may not affect the amount of tax due at the final consumption stage.’

B – National law

7. Under Article 87 of the Law on the tax on goods and services of 11 March 2004 (Ustawa o podatku od towarów i usług), (5) in the version applicable to the case before the referring court, (‘the Law on VAT’):

‘1. Where the amount of deductible input tax … exceeds the output tax during a given tax period, taxable persons shall enjoy the right to a reduction of the output tax due for the following periods by the said difference or to a refund of such a difference into his bank account.

2. … [T]he tax difference shall be refunded … within 60 days from the day on which the return was submitted by the taxable person.

Where further investigation is required into whether or not the refund should be granted, the tax office may extend that period until the necessary investigations have been carried out. Where such investigations establish that the refund referred to in the preceding sentence is justified, the tax office shall pay to the taxable person the amount due, together with interest in an amount equivalent to the interest that would have been payable by the taxable person in the event of deferred payment being allowed or where payment is permitted to be made in instalments.

3. Where the refundable tax difference exceeds the amount of input tax on acquisition of goods or services that are treated by the taxable person as forming part of his depreciable fixed assets, intangible assets and legal assets under the provisions applying to income tax, … increased by 22 per cent of the taxable person’s turnover liable to taxation at rates lower than those specified in Article 41(1), and by the turnover from deliveries of goods or provision of services referred to in Article 86(8)(1), the said difference shall be refunded within 180 days of submission of the tax return.

3a. The turnover referred to in paragraph 3 shall include the turnover from the receipt of trading debts, in respect of which the tax liability arises in accordance with Article 19(12) or Article 20(3), provided that a security deposit is lodged with the tax authorities in the amount corresponding to the amount of tax which would be due if the turnover had concerned a supply of goods in the territory of the country until documents confirming export of goods or an intra-Community supply of goods covered by the relevant trading debt are submitted. …’

8. Article 97 of the Law on VAT provides:

‘1. Prior to making the first intra-Community supply or acquisition, the taxable persons referred to in Article 15 who are under a duty to register as active VAT payers shall be obliged to notify the head of a tax authority their intention to carry out such activities, by filing the application for registration referred to in Article 96.

…

5. In the case of taxable persons who commence the activities referred to in Article 5 and taxable persons who commenced such activities within less than 12 months prior to filing the application referred to in paragraph 1 and who have been registered as European Union VAT payers, [(6)] the period for refunding the tax difference referred to in Article 87(2), (4) to (6) shall extend to 180 days. [(7)]

…

7. The provisions of paragraph 5 shall not apply if the taxable person [lodges] with a revenue office a guarantee by way of (i) a security deposit, (ii) material security or (iii) a bank [guarantee] in the amount of PLN 250 000, hereinafter referred to as a “security deposit”.’

II – Factual and procedural background and the questions referred for a preliminary ruling

9. In a ‘VAT-7’ return for January 2006, the applicant (Ms Alicja Sosnowska) recorded an excess VAT in the amount of PLN 44 782. Relying inter alia on Article 18(4) of the Sixth Directive, she requested the Swidnica Tax Office to repay that excess VAT within 60 days of the date on which the return was submitted.

10. However, pursuant to Article 87(1) and (2) and Article 97(5) and (7) of the Law on VAT, the Swidnica tax authority refused to do so. In the grounds for that decision, the tax authority stated that the applicant did not satisfy the conditions laid down in the Law on VAT for repayment of the difference of the VAT to a bank account within 60 days because she had failed to lodge a security deposit, material security or bank guarantee in the amount of PLN 250 000 (approximately EUR 62 000) with the tax authority.

11. The applicant lodged an administrative appeal against that decision with the Dyrektor Izby Skarbowej we Wrocławiu Ośrodek Zamiejscowy w Wałbrzychu (Director of the Wroclaw Tax Office, Walbrzych branch, ‘the Tax Office’), which upheld the decision taken by the authority at first instance. Therefore, the applicant brought an action against the decision of the Tax Office before the Wojewódzki Sąd Administracyjny in Wroclaw.

12. The referring court has doubts as to the compatibility of...