On October 22, 2015 the Court of Justice of the European Union (CJEU) ruled in Case C‑277/14 PPUH Stehcemp sp. j. Florian Stefanek, Janina Stefanek, Jarosław Stefanek versus Dyrektor Izby Skarbowej w Łodzi (ECLI:EU:C:2015:719).
· Must Articles 2(1), 4(1) and (2), 5(1) and 10(1) and (2) of the Sixth … Directive … be interpreted as meaning that a transaction conducted in circumstances such as those in the main proceedings, in which neither the taxable person nor the tax authorities are in a position to establish the identity of the actual supplier of the goods, constitutes a supply of goods?
· If the reply to Question 1 is in the affirmative, must Articles 17(2)(a), 18(1)(a) and 22(3) of the Sixth Directive be interpreted as precluding provisions of national law under which, in circumstances such as those in the main proceedings, tax cannot be deducted by the taxable person since the invoice was issued by a person who was not the actual supplier of the goods and it is not possible to establish the identity of the actual supplier of the goods and to require that supplier to pay the tax, or to identify the person required to pay the tax pursuant to Article 21(1)(c) of the Sixth Directive by reason of the issue of the invoice?
The dispute in the main proceedings and the questions referred for a preliminary ruling
· In 2004, PPUH Stehcemp made a number of purchases of diesel fuel which it used in the course of its economic activity. The invoices relating to those fuel purchases were issued by Finnet sp. z o.o. (‘Finnet’). PPUH Stehcemp deducted the VAT paid in respect of those fuel purchases.
· Following a tax inspection, the tax authorities, by decision of 5 April 2012, refused to allow PPUH Stehcemp to deduct that VAT on the ground that the invoices corresponding to those fuel purchases had been issued by a non-existent trader.
· The Director of the Tax Chamber in Łódź upheld that decision, by decision of 29 May 2012, on the ground that Finnet was to be regarded, in the light of the criteria provided for by the Decree of 27 April 2004, as a non-existent trader incapable of supplying goods. The finding that Finnet was a non-existent trader was based on the overall evidence, including the fact that that company was not registered for VAT purposes, did not submit a tax return and did not pay any taxes. In addition, that company did not publish its annual accounts and did not have a concession for the sale of liquid fuels. The building designated in the commercial register as being its corporate seat was in a dilapidated state, making any economic activity impossible. Finally, all attempts to contact Finnet or the person registered as its director in the commercial register had proved to be unsuccessful.
· PPUH Stehcemp brought an action before the Wojewódzki Sąd Administracyjny w Łodzi (Regional Administrative Court, Łódź) against the decision of the Director of the Tax Chamber of Łódź of 29 May 2012. That action was dismissed on the ground that Finnet was a non-existent trader on the dates of the transactions at issue in the main proceedings and that PPUH Stehcemp had not demonstrated due diligence by reason of its failure to ascertain whether those transactions were connected with fraud.
· PPUH Stehcemp brought an appeal on a point of law before the Naczelny Sąd Administracyjny (Supreme Administrative Court), invoking a breach of Article 86(1) and 86(2)(1)(a) of the VAT Law, read in conjunction with Article 17(2) of the Sixth Directive.
· In support of its appeal on a point of law, PPUH Stehcemp submits that it is contrary to the principle of neutrality of VAT to deprive a taxable person, acting in good faith, of the right of deduction. It states that it received registration documents from Finnet indicating that that company was lawfully entitled to carry on trade, namely an extract from the commercial register, the allocation of a tax identification number and a certificate stating that it had been allocated a statistical identification number.
· The referring court questions the importance which the case-law of the Court attaches to the good faith of the taxable person in the context of the right to deduct VAT (see, inter alia, judgments in Optigen and Others, C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16; Kittel and Recolta Recycling, C‑439/04 and C‑440/04, EU:C:2006:446; Mahagében and Dávid, C‑80/11 and C‑142/11, EU:C:2012:373; Tóth, C‑324/11, EU:C:2012:549, and orders in Forvards V, C‑563/11, EU:C:2013:125, and in Jagiełło, C‑33/13, EU:C:2014:184). It takes the view that the good faith of the taxable person cannot give rise to a right to deduct VAT if the material conditions governing that right are not met. In particular, it is unsure whether the acquisition of goods can be classified as a supply of goods when the invoices relating to that transaction refer to a non-existent trader and it is impossible to determine the identity of the actual supplier of the goods at issue. A non-existent trader could not transfer the right to dispose of the goods as owner or receive payment. In those circumstances, the tax authorities would not have an enforceable tax claim, with the result that no tax would be due.
· In those circumstances, the Naczelny Sąd Administracyjny (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
(1) Must Articles 2(1), 4(1) and (2), 5(1) and 10(1) and (2) of the Sixth … Directive … be interpreted as meaning that a transaction conducted in circumstances such as those in the main proceedings, in which neither the taxable person nor the tax authorities are in a position to establish the identity of the actual supplier of the goods, constitutes a supply of goods?
(2) If the reply to Question 1 is in the affirmative, must Articles 17(2)(a), 18(1)(a) and 22(3) of the Sixth Directive be interpreted as precluding provisions of national law under which, in circumstances such as those in the main proceedings, tax cannot be deducted by the taxable person since the invoice was issued by a person who was not the actual supplier of the goods and it is not possible to establish the identity of the actual supplier of the goods and to require that supplier to pay the tax, or to identify the person required to pay the tax pursuant to Article 21(1)(c) of the Sixth Directive by reason of the issue of the invoice?
The CJEU ruled as follows:
The provisions 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 2002/38/EC of 7 May 2002, must be interpreted as precluding national legislation, such as that at issue in the main proceedings, by which a taxable person is not allowed to deduct the value added tax due or paid in respect of goods that were delivered to him on the grounds that the invoice was issued by a trader which is to be regarded, in the light of the criteria provided by that legislation, as a non-existent trader, and that it is impossible to determine the identity of the actual supplier of the goods, except where it is established, on the basis of objective factors and without the taxable person being required to carry out checks which are not his responsibility, that that taxable person knew, or should have known, that that transaction was connected with value-added-tax fraud, this being a matter for the referring court to determine.
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