(December 11, 2014)
On December 11, 2014 the European Court of Justice (CJEU) ruled in Case C-590/13, Idexx Laboratories Italia Srl versus Agenzia delle Entrate (ECLI:EU:C:2014:2429).
The following questions were referred to the CJEU for a preliminary ruling:
- Do the principles set out by the [Court] in its judgment in [Ecotrade, C‑95/07 and C‑96/07, EU:C:2008:267], according to which Articles 18(1)(d) and 22 of [the Sixth Directive] preclude a practice of reassessing tax returns and recovering [VAT] which penalises, by denying the right to deduct in the case of a reverse-charge procedure, non-compliance with, on the one hand, the requirements arising from the formalities introduced by the national legislation giving effect to Article 18(1)(d) and, on the other, the requirements relating to the keeping of accounts and submission of a tax return arising from Article 22(2) and (4) respectively, apply also to cases in which there has been a total failure to comply with the requirements laid down under those legislative provisions where there is, in any event, no doubt as to the position of the person liable for the tax and as to that person’s right to deduct?
- Do the terms “obblighi sostanziali”, “substantive requirements” and “exigences de fond” used by the [Court] in the different language versions of its judgment in [Ecotrade, EU:C:2008:267] refer, in relation to cases of the reverse-charge procedure provided for under the VAT regime, to the need to pay the VAT or to assume liability for that tax, or do those terms refer to the existence of the substantive conditions establishing the taxpayer’s liability for that tax and governing the right to deduct, which is designed to safeguard the principle of VAT neutrality under European Union law – for example, the conditions relating to intrinsic character, taxability and full deductibility?’
The CJEU ruled as follows:
Articles 18(1)(d) and 22 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 91/680/EEC of 16 December 1991, must be interpreted as containing formal requirements relating to the right to deduct, failure to comply with which, in circumstances such as those at issue in the main proceedings, cannot result in the loss of that right.
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