On March 27, 2017 the Supreme Court of the United Kingdom lodged a request for a preliminary ruling with the Court of Justice of the European Union (CJEU) in the case Commissioners for Her Majesty’s Revenue and Customs versus Volkswagen Financial Services (UK) Ltd (Case C-153/17). The questions referred for a preliminary ruling have been published in the Official Journal of the European Union of June 6, 2017.

The questions referred for a preliminary ruling by the Supreme Court of the United Kingdom read as follows:

“1.  Where general overhead costs attributed to hire purchase transactions (which consist of exempt supplies of finance and taxable supplies of cars), have been incorporated only into the price of the taxable person’s exempt supplies of finance, does the taxable person have a right to deduct any of the input tax on those costs?

2.   What is the proper interpretation of paragraph 31 of Case C-93/98, Midland Bank, and specifically the statement that overhead costs ‘are part of the taxable person’s general costs and are, as such, components of the price of an undertaking’s products’?

In particular:

a)   Should this passage be interpreted to mean that a Member State must always attribute some input tax to every supply in any special method adopted under Article 173(2)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax?

b)   Is this the case even if the factual circumstances are that the overhead costs are not incorporated in the price of taxable supplies made by the undertaking?

3.   Does the fact that the overhead costs have been actually used, at least to some extent, in making taxable supplies of cars,

a)   entail that some proportion of the input tax on those costs must be deductible?

b)   Is this the case even if the factual circumstances are that overhead costs are not incorporated in the price of the taxable supplies of cars?

4.   Can it be legitimate in principle to ignore the taxable supplies of cars (or their value) for the purposes of arriving at a special method under Article 173(2)(c) of the Directive? ”

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