Provisional text

12 December 2024 (*1)

( Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 168 – Right to deduct VAT – Purchase of administrative services provided within the same group of companies – Refusal of the right of deduction )

In Case C‑527/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunalul Prahova (Regional Court, Prahova, Romania), made by decision of 30 December 2022, received at the Court on 16 August 2023, in the proceedings

Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Soluţionare a Contestaţiilor,

Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Administrare a Marilor Contribuabili,

THE COURT (Sixth Chamber),

composed of T. von Danwitz (Rapporteur), Vice-President of the Court, acting as President of the Sixth Chamber, A. Kumin and I. Ziemele, Judges,

Advocate General: J. Richard de la Tour,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–Weatherford Atlas Gip SA, by D.-D. Dascălu and A.M. Iordache, avocaţi,

–the Romanian Government, by R. Antonie, M. Chicu and E. Gane, acting as Agents,

–the European Commission, by M. Herold and E.A. Stamate, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

This request for a preliminary ruling concerns the interpretation of Articles 2 and 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).

The request has been made in proceedings between Weatherford Atlas Gip SA, on the one hand, and the Agenția Națională de Administrare Fiscală – Direcția Generală de Soluționare a Contestațiilor (National Agency for Tax Administration – Directorate-General for the settlement of complaints, Romania) and the Agenția Națională de Administrare Fiscală – Direcția Generală de Administrare a Marilor Contribuabili (National Agency for Tax Administration – Directorate-General for large-scale taxpayers, Romania) (together, ‘the tax authority’), on the other, concerning the refusal, by that authority, of the right to deduct input value added tax (VAT) paid in respect of the purchase of administrative services provided within the same group of companies.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

ECLI:EU:C:2025:140

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

ECLI:EU:C:2025:140

JUDGMENT OF 6. 3. 2025 – CASE C-41/24 WALTHAM ABBEY RESIDENTS ASSOCIATION

The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

Thus, the common system of VAT ensures complete neutrality of taxation of all economic activities, whatever the purpose or results of those activities, provided that they are themselves subject in principle to VAT. In so far as the taxable person, acting as such at the time when it acquires goods or receives services, uses those goods or services for the purposes of its taxed transactions, it is entitled to deduct the VAT due or paid in respect of those goods or services (judgment of 7 March 2024, <i>Feudi di San Gregorio Aziende Agricole</i>, C‑341/22, EU:C:2024:210, paragraph 27 and the case-law cited).

23The exercise of the right of deduction presupposes the existence of an input transaction which is itself subject to VAT. In that regard, it must be recalled that a supply of services is carried out for consideration, within the meaning of the VAT Directive, and is therefore subject to that tax, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the actual consideration for an identifiable service supplied to the recipient. That is the case if there is a direct link between the service supplied and the consideration received (judgment of 20 January 2022, <i>Apcoa Parking Danmark</i>, C‑90/20, EU:C:2022:37, paragraph 27 and the case-law cited).

24In the present case, it is therefore for the referring court to ascertain, in the first place, that the purchases of administrative services at issue in the main proceedings are transactions subject to VAT, within the meaning of the case-law cited in the preceding paragraph of the present judgment. To that end, the referring court will have to ascertain whether there is a direct link between those services and the consideration paid by Foserco.

25In addition, it is apparent from Article 168 of the VAT Directive that, in order for the right to deduct input VAT paid to be available, first, the person concerned must be a ‘taxable person’ within the meaning of that directive and, secondly, the goods or services relied on as the basis for claiming the right of deduction must be used by the taxable person for the purposes of its own taxed output transactions, and that, as inputs, those goods or services must be supplied by another taxable person (see, to that effect, judgments of 11 January 2024, <i>Global Ink Trade</i>, C‑537/22, EU:C:2024:6, paragraph 33, and of 7 March 2024, <i>Feudi di San Gregorio Aziende Agricole</i>, C‑341/22, EU:C:2024:210, paragraph 28 and the case-law cited).

26In the present case, it is therefore for the referring court to ascertain, in the second place, that Foserco and the companies which provided the administrative services at issue in the main proceedings are taxable persons, within the meaning of the VAT Directive, and whether those services were used by Foserco for the purposes of its own taxed output transactions.

27In that regard, it should be stated that the group of companies at issue in the main proceedings appears to be made up of separate taxable persons, and that it does not appear to constitute a single taxable person, namely a VAT group, under Article 11 of the VAT Directive. It is apparent from the request for a preliminary ruling, and from the written observations of Weatherford Atlas Gip, that the administrative services at issue in the main proceedings were provided to Foserco, which was a Romanian company, by companies established outside Romania. However, a VAT group is necessarily limited to the territory of one and the same Member State, as is apparent from the wording of that Article 11 (see, to that effect, judgment of 11 March 2021, <i>Danske Bank</i>, C‑812/19, EU:C:2021:196, paragraph 24).

28In this context, the Court has held that the existence of a direct and immediate link between a particular input transaction and a particular output transaction or transactions giving rise to the right to deduct is, in principle, necessary. The right to deduct VAT charged on the acquisition of input goods or services presupposes that the expenditure incurred in acquiring them is a component of the price of the output transactions giving rise to the right to deduct (judgment of 13 June 2024, <i>C (Court-appointed administrators and liquidators)</i>, C‑696/22, EU:C:2024:499, paragraph 86 and the case-law cited).

29However, a taxable person also has a right to deduct even where there is no direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct where the costs of the goods and services in question are part of its general costs and are, as such, components of the price of the goods or services which it supplies. Such costs do have a direct and immediate link with the taxable person’s economic activity as a whole (judgment of 4 October 2024, <i>Voestalpine Giesserei Linz</i>, C‑475/23, EU:C:2024:866, paragraph 21 and the case-law cited).

30The Court has further specified that the existence of such a link between transactions must be assessed in the light of the objective content of those transactions. More specifically, it is for the tax authorities and the national courts to take into consideration all the circumstances surrounding the transactions concerned and to take account only of the transactions that are objectively linked to the taxable person’s taxable activity. Thus, account must be taken of the actual use of the goods and services purchased, as inputs, by the taxable person and of the exclusive reason for that purchase, since that reason must be regarded as a criterion for determining the objective content (see, to that effect, judgments of 13 June 2024, <i>C (Court-appointed administrators and liquidators)</i>, C‑696/22, EU:C:2024:499, paragraph 89, and of 4 October 2024, <i>Voestalpine Giesserei Linz</i>, C‑475/23, EU:C:2024:866, paragraph 22 and the case-law cited).

31In that context, it is clear from the case-law that no right of deduction can arise from the part of the expenditure incurred by the taxable person that is linked not to transactions carried out by the taxable person itself, but to transactions carried out by a third party (see, to that effect, judgments of 1 October 2020, <i>Vos Aannemingen</i>, C‑405/19, EU:C:2020:785, paragraph 38, and of 8 September 2022, <i>Finanzamt R (Deduction of VAT linked to a shareholder contribution)</i>, C‑98/21, EU:C:2022:645, paragraph 55).

32In the present case, if it turned out that part of the services in respect of which the expenditure at issue in the main proceedings was incurred had been used not for the purposes of the taxable person’s own transactions but for the purposes of transactions by third parties, the existence of a direct and immediate link between those services and that taxable person’s taxed transactions would be partially broken, so that that taxable person would not be entitled to proceed to deduct the VAT charged on that part of the expenditure (see, to that effect, judgment of 1 October 2020, <i>Vos Aannemingen</i>, C‑405/19, EU:C:2020:785, paragraph 39 and the case-law cited).

33In order to establish the scope of the taxable person’s right to deduct, it is for the referring court to determine, in particular in the light of the contracts for the provision of services and the economic and commercial reality, the extent to which the services concerned were actually supplied in order to allow the taxable person to carry out its taxable transactions. It is only to that extent that the input VAT paid will be regarded as chargeable on the services supplied to the taxable person (see, to that effect, judgment of 1 October 2020, <i>Vos Aannemingen</i>, C‑405/19, EU:C:2020:785, paragraphs 40 and 42 and the case-law cited).

34The fact that the administrative services at issue in the main proceedings are provided simultaneously to several recipients appears to be irrelevant in that regard. By contrast, it is for the referring court to satisfy itself that the proportion of the costs relating to those services, borne by the taxable person, actually corresponds to the services which it received for the purposes of its own taxed output transactions.

35The question whether the purchase of the administrative services at issue in the main proceedings was necessary or appropriate also seems irrelevant, since the VAT Directive does not make the exercise of the right of deduction subject to a criterion of the economic profitability of the input transaction. The common system of VAT is intended to ensure neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT. Therefore, the right to deduct, once it has arisen, is retained even if the intended economic activity was not carried out and, therefore, did not give rise to taxed transactions or if the taxable person was unable to use the goods or services which gave rise to a deduction in the context of taxable transactions by reason of circumstances beyond its control (see, to that effect, judgment of 13 June 2024, <i>C (Court-appointed administrators and liquidators)</i>, C‑696/22, EU:C:2024:499, paragraph 94 and the case-law cited).

36As regards, lastly, the burden of proof, it is settled case-law that it is for the taxable person seeking deduction of VAT to establish that it meets the conditions for eligibility. The tax authorities may thus require the taxable person to produce the evidence they consider necessary for determining whether or not the deduction requested should be granted (see, to that effect, judgments of 9 December 2021, <i>Kemwater ProChemie</i>, C‑154/20, EU:C:2021:989, paragraph 33 and the case-law cited, and of 16 February 2023, <i>DGRFP Cluj</i>, C‑519/21, EU:C:2023:106, paragraphs 99 and 100).

37As regards the assessment of that evidence, it must be done by the national court in accordance with the rules of evidence under national law, carrying out an overall assessment of all the facts and circumstances of the case (see, to that effect, judgments of 25 May 2023, <i>Dyrektor Izby Administracji Skarbowej w Warszawie (VAT – Fictitious acquisition)</i>, C‑114/22, EU:C:2023:430, paragraph 36, and of 11 January 2024, <i>Global Ink Trade</i>, C‑537/22, EU:C:2024:6, paragraph 34).

38Consequently, Article 168 of the VAT Directive must be interpreted as precluding national legislation or a national practice under which the tax authority refuses the right to deduct input VAT paid by a taxable person when acquiring services from other taxable persons belonging to the same group of companies on the grounds that those services were supplied at the same time to other companies in that group and that their purchase was not necessary or appropriate, where it is established that those services are used by that taxable person for the purposes of its own taxed output transactions.

The third question

39By that question, the referring court asks whether, for the purpose of interpreting Article 2 of the VAT Directive, where it is established that intra-group services are not supplied to a member of the group, a company which is part of that group but is deemed not to have benefited from such services, may be regarded as a taxable person acting as such.

40As the European Commission has pointed out, that question appears to be irrelevant for the purpose of resolving the dispute in the main proceedings. It does not appear to be in any way disputed, in the context of that dispute, that Foserco was a taxable person within the meaning of the VAT Directive. As the Romanian Government has also pointed out, that is a separate question from that of the existence of the right to deduct input VAT paid on the administrative services at issue in the main proceedings.

41Consequently, in the light of the settled case-law recalled in paragraph 17 above, the third question is inadmissible.

Costs

42Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Sixth Chamber) hereby rules:

Article 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as precluding national legislation or a national practice under which the tax authority refuses the right to deduct input value added tax paid by a taxable person when acquiring services from other taxable persons belonging to the same group of companies on the grounds that those services were supplied at the same time to other companies in that group and that their purchase was not necessary or appropriate, where it is established that those services are used by that taxable person for the purposes of its own taxed output transactions.

[Signatures]

*

Language of the case: Romanian.