23.3.2013

Official Journal of the European Union

C 86/6

(Case C-643/11) (Taxation - VAT - Directive 2006/112/EC - Principle of fiscal neutrality - Right of deduction - Refusal - Article 203 - Entering of the VAT on the invoice - Chargeability - Existence of a taxable transaction - Identical determination in respect of the issuer of the invoice and its recipient - Necessity)

2013/C 86/09

Language of the case: Bulgarian

Referring court

Parties to the main proceedings

Applicant: LVK — 56 EOOD

Defendant: Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ — Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite

Re:

Request for a preliminary ruling — Administrativen sad — Varna — Interpretation of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — Right to deduct input VAT — Evidence of the existence of the chargeable event — Practice of the tax authorities refusing to grant the right to deduct VAT to the purchaser of taxable goods on the ground that there is no evidence that the supply took place, despite the finding that the tax had become chargeable at the level of the supplier

Operative part of the judgment

1.Article 203 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that:

—the value added tax entered by a person on an invoice is payable by him regardless of whether a taxable transaction actually exists;

—it cannot be inferred from the mere fact that the tax authorities did not correct, in a tax adjustment notice addressed to the issuer of that invoice, the value added tax declared by the latter that those authorities have acknowledged that the invoice corresponded to an actual taxable transaction.

2.European Union law must be interpreted as meaning that Articles 167 and 168(a) of Directive 2006/112 and the principles of fiscal neutrality, legal certainty and equal treatment do not preclude the recipient of an invoice from being refused the right to deduct input value added tax because there is no actual taxable transaction even though, in the tax adjustment notice addressed to the issuer of that invoice, the value added tax declared by the latter was not adjusted. However, if, in the light of fraud or irregularities, committed by the issuer of the invoice or upstream of the transaction relied upon as the basis for the right of deduction, that transaction is considered not to have been actually carried out, it must be established, on the basis of objective factors and without requiring of the recipient of the invoice checks which are not his responsibility, that he knew or should have known that that transaction was connected with value added tax fraud, a matter which it is for the referring court to determine.

* * *

(1) OJ C 80, 17.3.2012.