5.3.2011

Official Journal of the European Union

C 72/16

(Case C-624/10)

2011/C 72/28

Language of the case: French

Parties

Applicant: European Commission (represented by: M. Afonso, acting as Agent)

Defendant: French Republic

Form of order sought

—declare that, by providing in Title IV of Administrative Instruction No 105 of 23 June 2006 (3 A-9-06) for an administrative concession derogating from a VAT reverse charge scheme and necessitating, among other things, the designation of a tax representative by a seller or provider established outside of France, the French Republic has failed to fulfil its obligations under the VAT Directive and, in particular, Articles 168, 171, 193, 194, 204 and 214 thereof;

—order the French Republic to pay the costs.

Pleas in law and main arguments

By its action, the Commission claims that the French legislation derogating from a VAT reverse charge scheme is, in a number of respects, contrary to the law of the European Union.

Firstly, the taxable persons who wish to benefit from the scheme introduced by Title IV of Administrative Instruction 3 A-9-06 are obliged to designate a tax representative, which is not in accordance with Article 204 of the VAT Directive. That article allows Member States to impose such an obligation only in the case where no instrument exists, with the country in which the taxable person is established, organising mutual assistance in indirect taxation matters similar to that provided for within the European Union.

Secondly, the administrative concession is also subject to the obligation for the seller to identify him or herself for VAT purposes in France, which is not in accordance with Article 214(1) of the VAT Directive. Under that provision the duty to identify oneself for VAT purposes does not apply to those taxable persons who carry out, in the territory of a Member State in which they are not established, supplies of goods or services subject to reverse charge by the customer, in particular in application of Article 194 of the VAT Directive.

Thirdly and finally, the scheme provides for the offsetting of the deductible VAT of the seller or provider against the VAT collected by one or more of his or her customers. That is not in accordance with the provisions of Articles 168 and 171 of the VAT Directive, which provide that the set-off between deductible VAT and collected VAT is to apply on an individual level to each taxable person. Such a derogating scheme also cannot be based upon Article 11 of that directive.