Flashback on ECJ cases: C-183/14 Salomie and Oltean – Reclassification by the national tax authority of a transaction as an economic activity subject to VAT

Source curia


1.      The principles of legal certainty and of the protection of legitimate expectations do not preclude, in circumstances such as those of the dispute in the main proceedings, a national tax authority from deciding, following a tax audit, to subject transactions to value added tax and to impose the payment of surcharges, provided that that decision is based on clear and precise rules and that that authority’s practice has not been such as to give rise, in the mind of a prudent and well-informed trader, to a reasonable expectation that that tax would not be levied on such transactions, this being a matter for the referring court to determine. The surcharges applied in such circumstances must comply with the principle of proportionality.

2.      Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax precludes, in circumstances such as those of the dispute in the main proceedings, national rules under which the right to deduct input value added tax, due or paid on goods and services used in the context of taxed transactions, is refused to the taxable person, who must nevertheless pay the tax that he ought to have recovered, for the sole reason that he was not identified for value-added-tax purposes when he carried out those transactions, so long as he has not been duly identified for value added tax purposes and the tax return for the tax due has not been filed.


  • ECJ has held that a tax authority can act retrospectively without breaching EU principles such as legal certainty and protection of legitimate expectation.
  • However it must set off unclaimed input VAT immediately against underpaid output VAT, and cannot first demand the output VAT without crediting the input VAT
  • At the hearing, the German Government pointed out that the postponement of the right to deduct VAT to the year in which the invoice has been corrected, is a penalty. In order to reduce the non-compliance with the formal conditions to be penalised are however, penalties other than refusal of the right to deduction of the tax for the year in which the invoice is issued drawn up, imaginable, such as a fine or a pecuniary penalty proportionate to the seriousness of the infringement (see in those sentence of the judgment of 9 July 2015 in Case C 183/14 Salomie and Oltean, EU:C:2015:454, point 63). In addition, the postponement implies of that duty, in accordance with the rules applicable in the main proceedings, in any event and irrespective of the circumstances which necessitate the correction of the invoice originally issued the Commission’s proposal, which goes beyond what is necessary to achieve the objectives set out in the previous point of this opinion.


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