VATupdate

ECJ C-358/20 (Promexor Trade vs RO) – Question – Revoking VAT identification number


Article in the EU VAT Directive (and other EU legislation)

An interpretation of Article 5(4) TEU,

Articles 1, 167 to 169, 176 to 180, 214(1), 250, 272 and 273 of Directive 2006/112/EC, and of the principles of neutrality, effectiveness, sincere cooperation, certainty of legal relations and protection of legitimate expectations, is sought pursuant to Article 267 TFEU.


Facts

On 30 April 2014, the defendant (the tax authorities) ordered the ex officio withdrawal of the applicant’s VAT registration because its VAT returns did not reveal any transactions subject to VAT. Since the applicant no longer had a valid VAT number, it issued invoices without VAT from May 2014. In April 2019, the defendant informed the applicant that a tax audit would be carried out soon. In order to avoid a fine for failing to submit returns on time, the applicant has decided to submit the VAT collected return, which must be drawn up by taxable persons whose VAT number has been withdrawn, with retroactive effect. On the basis of what was included in those declarations and without further investigation, the defendant issued an enforcement order on 19-04-2019, and with the issuing of the injunction against the applicant, a levy of execution commenced. The tax audit took place on 11-06-2019. In doing so, the inspection body found that the applicant had correctly submitted the VAT returns for the period audited. After the inspection had ended, but within the limitation period, the applicant submitted zero returns for rectification. The applicant requests the referring court to annul the order for payment and the enforcement order of 19.04.2019 issued in a case of levy of execution opened against her, as well as to annul the claim and the levy of execution. In doing so, the inspection body found that the applicant had correctly submitted the VAT returns for the period audited. After the inspection had ended, but within the limitation period, the applicant submitted zero returns for rectification. The applicant requests the referring court to annul the order for payment and the enforcement order of 19.04.2019 issued in a case of levy of execution opened against her, as well as to annul the claim and the levy of execution. In doing so, the inspection body found that the applicant had correctly submitted the VAT returns for the period audited. After the inspection had ended, but within the limitation period, the applicant submitted zero returns for rectification. The applicant requests the referring court to annul the order for payment and the enforcement order of 19.04.2019 issued in a case of levy of execution opened against her, as well as to annul the claim and the levy of execution.

Consideration:

The referring court wonders whether the national legislation applicable in the present case is compatible with the principles deriving from the VAT Directive and the case-law of the Court, in the event that the taxable person, after withdrawal of his VAT number, is no longer entitled to deduction of VAT on acquisitions, but remains obliged to pay the VAT received, without limiting the collection obligation in time. Although the right to deduct could be exercised retroactively after a new registration for VAT purposes, the applicant does not specifically have this option, since it does not fulfill a formal condition because its director is a partner of another company which is located in a insolvency proceedings.

Source Minbuza.nl


Questions

Can Romania withdraw a taxable person’s VAT identification number (because no VAT due was declared for some time) and then charge VAT to that taxable person in the following period while no deduction is granted?

1. Do the provisions of Directive 2006/112/EC and the principle of fiscal neutrality preclude national legislation by which a Member State requires a citizen
to collect and pay VAT to the State for an indefinite period without, however, at the same time granting him the right to deduct VAT on the ground that the VAT code had been revoked since no transactions subject to VAT had been indicated in the VAT returns filed for six consecutive months/two consecutive calendar quarters?

2. With regard to the circumstances of the main proceedings, are the principle of legal certainty, the principle of legitimate expectations, the principle of
proportionality and [the principle] of sincere cooperation, as set out in Directive 2006/112/EC, compatible with national legislation or with a practice of the tax authority according to which, although the Member State normally allows a legal person, on request, to re-register for VAT purposes following automatic
revocation of the VAT code, in certain specific circumstances a taxpayer may not request re-registration for VAT purposes, for purely formal reasons, whilst being obliged to collect and pay VAT to the State, for an indeterminate period, without, however, at the same time being granted the right to deduct VAT?

3. With regard to the circumstances of the main proceedings, are the principle of legal certainty, the principle of legitimate expectations, the principle of
proportionality and [the principle] of sincere cooperation, as set out in Directive 2006/112/EC, to be interpreted as prohibiting the imposition on a taxpayer of a requirement to collect and pay VAT for an indefinite period and without granting the right to deduct VAT, without, in the particular case, the tax authority in question verifying the substantive requirements relating to the right to deduct VAT and without there being any fraud on the part of the taxpayer?


AG Opinion


Decision


Personal comments/VATupdate 


Source


Similar ECJ cases


How did countries implement the case?  Your feedback appreciated!  Let us know


Newsletters

Sponsors:

Advertisements:

* click here if you have interesting news to share *