May 30

Opinion of the Advocate General expected to be delivered in Case C-664/16, Vădan (VAT – Deduction of input tax – Need to provide evidence by way of invoices)

Questions referred for a preliminary ruling:

1.     On a proper construction of Directive 2006/112 in general, and Articles 167, 168, 178, 179 and 273 in particular, and the principles of proportionality and neutrality, may a taxable person who satisfies the substantive requirements for the deduction of VAT exercise his right to deduct in a situation where, in a particular context such as that of the dispute in the main proceedings, he is unable to provide evidence, by way of invoices, of input tax for the supply of goods and provision of services?

2.     If the first question is answered in the affirmative, on a proper construction of Directive 2006/112 and the principles of proportionality and neutrality, is an indirect assessment method (assessment by means of a court-commissioned expert report), employed by an independent expert and based on the amount of work/labour involved in the construction of buildings as stated in the report, an acceptable and appropriate measure for determining the extent of the right to deduct in a situation where the supply of goods (building material) and the provision of services (labour relating to the construction of buildings) originate from taxable persons liable to VAT?

May 31

CJEU expected to deliver judgment in Case C-382/16, Hornbach-Baumarkt (Freedom of establishment – Corrections on intra-group transfer prices)

Question referred for a preliminary ruling:

Does Article 49 of the Treaty on the Functioning of the European Union (TFEU), in conjunction with Article 54 TFEU, (formerly Article 43 of the Treaty establishing the European Community (TEC), in conjunction with Article 48 EC), preclude legislation of a Member State which provides that income of a resident taxpayer derived from business relations with a company established in another Member State in which that taxpayer has a direct or indirect shareholding of at least 25% and with which that taxpayer has agreed terms that depart from those that would have been agreed on by unrelated third parties under the same or similar circumstances must be calculated as if that income had been earned pursuant to terms agreed on between unrelated third parties, if such a correction is not made in respect of income from business relations with a resident company and the legislation in question does not afford the resident taxpayer the opportunity to present evidence that the terms were agreed on for commercial reasons resulting from its status as a shareholder of the company established in the other Member State?

More information on the opinion in this case as delivered on December 14, 2017 by Advocate General Bobek can be found here

May 31

CJEU expected to deliver judgment in the joined Cases C-660/16 (Kollroß) and C-661/16 (Wirtl) (VAT – deduction of input tax)

Questions referred for a preliminary ruling in Case C-660/16:

1  Are the requirements as to the certainty that a supply will take place, as a condition of the deduction of input tax on a payment on account within the meaning of the judgment of the Court of Justice of the European Union in Case C‑107/13 Firin [(“Firin”)] to be determined purely objectively or from the point of view of the person having made the payment on account in the light of the circumstances apparent to him?

2  Are the Member States, taking into account the fact that the chargeability of tax and the right to deduct arise at the same time, in accordance with Article 167 of [the VAT Directive], and the regulatory powers which they enjoy under Article 185(2) [, second subparagraph,] and Article 186 of [that directive], entitled to make the adjustment of both the tax and the deduction of input tax subject to a refund of the payment on account?

3  Must the competent tax office with regard to a person who has made a payment on account refund the value added tax to that person where the latter cannot recover the payment on account from the recipient of that payment? If so, must this take place as part of the tax assessment procedure or is a separate equitable procedure sufficient for this purpose?

Questions referred for a preliminary ruling in Case C-661/16:

1  In accordance with the judgment of the Court of Justice [in Firin, paragraph 39], is the deduction of input tax on a payment on account excluded where the occurrence of the chargeable event is uncertain at the time when the payment on account is made? Is that exclusion to be determined by reference to the objective situation or by reference to the point of view of the person having made the payment on account in the light of the circumstances objectively apparent to him?

2  Is the judgment of the Court of Justice in [Firin, paragraph 58,] to be interpreted as meaning that, under EU law, an adjustment of the deduction, by a person having made a payment on account for a supply of goods, of the input tax indicated on the invoice issued to that person for that payment is not conditional upon the refund of the payment on account which has been made, where that supply does not ultimately take place?

3  In the event that the previous question is answered in the affirmative, does Article 186 of the VAT Directive, which allows the Member States to lay down detailed rules for the adjustment provided for in Article 185 of that directive, authorise the Federal Republic of Germany, as a Member State, to provide in its national law that the taxable amount may be reduced only if the payment on account is refunded, and that the VAT debt and the deduction of input tax are, accordingly, to be adjusted at the same time and under the same conditions?

More information on the opinion in these joined case as delivered on January 30, 2018 by Advocate General Wahl can be found here