(March 26, 2015) 

On March 26, 2015 the European Court of Justice (CJEU) ruled in Case C-499/13 Marian Macikowski versus Dyrektor Izby Skarbowej w Gdańsku (ECLI:EU:C:2015:201).

·        In the light of the system of VAT resulting from the VAT Directive, in particular Articles 9 and 193, in conjunction with Article 199(1)(g), is a provision of national law permissible, such as that in Article 18 of the VAT Law, which introduces exceptions to the general rules on that tax, in particular with regard to the persons required to calculate and collect the tax, by establishing the concept of paying agent, that is to say, a person who is required, on behalf of the taxable person, to calculate the amount of tax, collect it from the taxable person, and pay it to the tax authority in good time?

·        If the answer to the first question is in the affirmative:

o       In the light of the principle of proportionality, which is a general principle of EU law, is a provision of national law permissible, such as that in Article 18 of the VAT Law, under which, inter alia, tax on the supply of immovable property effected through enforcement in respect of goods owned by the debtor or in his possession in breach of existing law is calculated, collected and paid by a court enforcement officer carrying out an enforcement action who, as paying agent, bears liability in the event of failure to fulfil that obligation?

o      In the light of Articles 206, 250 and 252 of the VAT Directive and of the principle of neutrality arising therefrom, is a provision of national law permissible, such as that in Article 18 of the VAT Law, under which a paying agent as referred to in that provision is required to calculate, collect and pay, within the tax period of the taxable person, an amount of VAT on a supply, effected through enforcement, of goods owned by that taxable person or in his possession in breach of the law in force, in an amount comprising the product of the proceeds from the sale of the goods, minus VAT, and the applicable rate of that tax, with no reduction of that amount by the amount of input tax from the beginning of the tax period to the date of the collection of that tax from the taxable person?

The dispute in the main proceedings and the questions referred for a preliminary ruling

·        Mr Macikowski is a court enforcement officer at the Sąd Rejonowy w Chojnicach (District Court, Chojnice).

·        At the request of a creditor, he took enforcement action against Royal sp. z o.o. (‘Royal’), which was a taxable person for VAT purposes.

·        As part of that procedure Mr Macikowski seized immovable property belonging to Royal.

·        The auction of the immovable property at issue was held on 16 February 2007. By order of 22 March 2007, which became final on 22 August 2007, the Sąd Rejonowy w Chojnicach awarded ownership of the immovable property to Mr and Mrs Babinski at the highest bid price of 1 424 201 Polish zlotys (PLN). The purchasers paid that price in full into the account of the Sąd Rejonowy w Chojnicach.

·        By order of 27 October 2008, Mr Macikowski drew up a draft plan for dividing that sum, in which, inter alia, he identified an amount of PLN 256 823.13 due in respect of VAT to be paid to the Tax Office in Chojnice.

·        On 26 January 2009, Mr Macikowski requested the Sąd Rejonowy w Chojnicach to transfer PLN 256 823.13 to his account to enable him, as paying agent, to pay the VAT due on the transfer of ownership by auction of Royal’s immovable property.

·       The Sąd Rejonowy w Chojnicach transferred that amount to Mr Macikowski’s account after the plan for division had become final. Mr Macikowski consequently issued an invoice documenting the VAT on the sale of that immovable property on 31 August 2009, and informed the tax authority of the payment of the tax on 2 September 2009.

·        Referring inter alia to Article 18 of the VAT Law in conjunction with Articles 8 and 30(1), (3) and (4) of the Tax Code, the Head of the Tax Office in Chojnice ruled that Mr Macikowski was liable, as the paying agent, for VAT of PLN 256 823.13 which had been collected but not paid in time in connection with the sale of Royal’s immovable property. In the view of the Tax Office in Chojnice, since Mr Macikowski was taking enforcement action, he had been required, in November 2007, to issue on behalf of the debtor, Royal, a VAT invoice documenting the sale of that company’s immovable property for a gross amount of PLN 1 424 201, including tax of PLN 256 823.13, and to pay that tax into the account of the competent tax office by 25 December 2007.

·        By judgment of 10 October 2011, the Wojewódzki Sąd Administracyjny w Gdańsku (Regional Administrative Court, Gdańsk) dismissed the action brought by Mr Macikowski against the decision of the Dyrektor Izby Skarbowej w Gdańsku of 23 November 2009 ruling on the tax liability of the paying agent for the failure to pay in time the VAT on the enforced sale of Royal’s immovable property. In the grounds of appeal that court pointed out that it was bound in this case by the interpretation of the Naczelny Sąd Administracyjny (Supreme Administrative Court), which had not questioned the legal basis of that decision and had accepted that it was possible in law for Mr Macikowski to fulfil his obligations under Article 18 of the VAT Law.

·        Mr Macikowski appealed on a point of law against that judgment to the Naczelny Sąd Administracyjny. In the grounds of appeal he claimed that the judgment had made an erroneous interpretation of Article 18 of the VAT Law by not taking account of the provisions of EU law on VAT, namely the provisions of the VAT Directive.

·        In those circumstances, considering that the examination of that appeal on a point of law required an interpretation of EU law, the Naczelny Sąd Administracyjny decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

1. In the light of the system of VAT resulting from the VAT Directive, in particular Articles 9 and 193, in conjunction with Article 199(1)(g), is a provision of national law permissible, such as that in Article 18 of the VAT Law, which introduces exceptions to the general rules on that tax, in particular with regard to the persons required to calculate and collect the tax, by establishing the concept of paying agent, that is to say, a person who is required, on behalf of the taxable person, to calculate the amount of tax, collect it from the taxable person, and pay it to the tax authority in good time?
2. If the answer to the first question is in the affirmative:

a.      In the light of the principle of proportionality, which is a general principle of EU law, is a provision of national law permissible, such as that in Article 18 of the VAT Law, under which, inter alia, tax on the supply of immovable property effected through enforcement in respect of goods owned by the debtor or in his possession in breach of existing law is calculated, collected and paid by a court enforcement officer carrying out an enforcement action who, as paying agent, bears liability in the event of failure to fulfil that obligation?

b.      In the light of Articles 206, 250 and 252 of the VAT Directive and of the principle of neutrality arising therefrom, is a provision of national law permissible, such as that in Article 18 of the VAT Law, under which a paying agent as referred to in that provision is required to calculate, collect and pay, within the tax period of the taxable person, an amount of VAT on a supply, effected through enforcement, of goods owned by that taxable person or in his possession in breach of the law in force, in an amount comprising the product of the proceeds from the sale of the goods, minus VAT, and the applicable rate of that tax, with no reduction of that amount by the amount of input tax from the beginning of the tax period to the date of the collection of that tax from the taxable person?

The CJEU ruled as follows:

1.      Articles 9, 193 and 199(1)(g) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as not precluding a provision of national law, such as that at issue in the main proceedings, which, within the context of a sale of immovable property effected through enforcement, imposes on a person — namely the court enforcement officer who made the sale — obligations to calculate, collect and pay the value added tax on the proceeds of that transaction within the prescribed time-limits.

2.      The principle of proportionality must be interpreted as not precluding a provision of national law, such as that at issue in the main proceedings, under which a court enforcement officer must be liable with his entire assets for the amount of value added tax due on the proceeds of the sale of immovable property effected through enforcement where he does not discharge his obligation to collect and pay that tax, provided that the court enforcement officer concerned actually has all legal means to discharge that obligation, which it is for the referring court to determine.

3.      Articles 206, 250 and 252 of Directive 2006/112 and the principle of fiscal neutrality must be interpreted as not precluding a provision of national law, such as that at issue in the main proceedings, under which the paying agent as referred to in that provision is required to calculate, collect and pay an amount of value added tax on a sale of goods effected through enforcement without being able to deduct the amount of value added tax paid as input tax from the beginning of the tax period to the date of the collection of that tax from the taxable person.

For further information click here to be forwarded to the text of the ruling as published on the website of the Court of Justice, which will open in a new window.

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