26.5.2012

Official Journal of the European Union

C 151/19

(Case C-124/12)

2012/C 151/34

Language of the case: Bulgarian

Referring court

Parties to the main proceedings

Applicant: AES-3C Maritsa Iztok I EOOD

Defendant: Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ — Plovdiv

Questions referred

1.Is a provision such as that in Article 70(1)(2) of the Law on value added tax according to which a taxable person does not have a right to deduct value added tax on transport services, work clothing and protective gear received and on business travel expenses incurred because those goods and services are provided free of charge to natural persons, namely employees working for the taxable person’s benefit, compatible with Articles 168(a) and 176 of Council Directive 2006/112/ЕC (1) of 28 November 2006 on the common system of value added tax, if the following circumstances are taken into account:

—the taxable person has not concluded any contracts of employment with the employees but engages them on the basis of a contractual relationship relating to the ‘provision of staff’ with another taxable person who is the employer of the personnel;

—the transport services received are used to transport employees from certain collection points in various places to their place of work and back and there is no organised public transport available for staff to get to and around the place of work;

—the provision of work clothing and protective gear is required under the Labour Code and the Law on health and safety at work;

—the deduction of VAT would not be in dispute in relation to the transport services, work clothing, protective gear and business travel expenses if those goods and services had been provided by the employer of the staff; in the present case, however, the respective acquisitions were made by a taxable person who is not the employer but, on the basis of a contract for the provision of staff, draws the benefit of the work and bears the costs associated therewith?

2.Does Article 176 of Directive 2006/112 empower a Member State, on acceding to the European Union, to introduce a limitation on the exercise of the right to deduct input tax such as that under Article 70(1)(2) of the Law on value added tax — namely that ‘the goods or services are intended to be supplied free of charge’ — if the legislation in force up to the date of accession did not expressly provide for such a limitation?

3.If the previous question should be answered in the affirmative, does it follow that goods and services received are intended to be ‘supplied free of charge’ if they are purchased for the purposes of economic activity but, because of their nature, in order for them to be used they have to be provided to the staff working in the taxable person’s undertaking?

(1) OJ 2006 L 347, p. 1.

ECLI:EU:C:2012:151