31.3.2012

Official Journal of the European Union

C 98/9

(Case C-118/11) (<span class="super">1</span>)

(VAT - Directive 2006/112/EC - Articles 168 and 176 - Right of deduction - Condition relating to use of goods and services for the purposes of taxed transactions - Origin of the right to deduct - Motor vehicle leasing contract - Financial leasing contract - Vehicle used by employer to transport free of charge an employee between his home and his workplace)

2012/C 98/12

Language of the case: Bulgarian

Referring court

Parties to the main proceedings

Applicant: Eon Aset Menidjmunt

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

Re:

Reference for a preliminary ruling — Administrativen sad Varna — Interpretation of Articles 168, 173 and 176 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — Restrictions on the right to deduct VAT — National legislation laying down, as a mandatory condition for recognition of the right to deduct VAT, that goods or services be used for the purposes of an independent economic activity and not providing for a rectification method for cases in which the goods or services are not initially included in the turnover but, subsequent to their acquisition, they are used for the purposes of taxable supplies

Operative part of the judgment

Article 168(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that:

—a leased motor vehicle is to be regarded as used for the purposes of the taxable person’s taxed transactions if there is a direct and immediate link between the use of that vehicle and the taxable person’s economic activity and the time when the right to deduct arises and when it is necessary to take into account the existence of such a link is on the expiry of the period to which each payment relates;

—a motor vehicle leased under a financial leasing contract and placed in the category of capital goods is to be regarded as used for the purposes of taxed transactions if the taxable person acting as such acquires that vehicle and allocates it entirely to the assets of his undertaking, input value added tax payable being fully and immediately deductible, and any use of that vehicle for the taxable person’s private purposes or for those of his staff or for purposes other than those of his undertaking being treated as a supply of services carried out for consideration.

Articles 168 and 176 of Directive 2006/112 must be interpreted as not precluding national legislation which provides for the exclusion from the right to deduct of goods and services intended to be supplied free of charge or for activities outside the scope of the taxable person’s economic activity, provided that goods categorised as capital goods are not allocated to the assets of the undertaking.

(<span class="super">1</span>) OJ C 145, 14.5.2011.