On June 11, 2020, the ECJ issued his decision in the case C-19/19 (Pantochim SA) related to a statutory set-off of a VAT claim against tax debt of requested Member State
Article in the EU VAT Directive
This is not a VAT case as such, the discussion is related to a VAT claim,
Facts
- Pantochim was put into liquidation by a judgment of 26 June 2001 of the tribunal de commerce de Charleroi (Charleroi Commercial Court, Belgium).
- In the course of that liquidation, the Belgian State declared a preferential claim in respect of value added tax (VAT), which was paid in full by Pantochim, and a claim from the German State for EUR 634 257.50, comprising VAT and interest, which was admitted to the company’s liabilities as an unsecured debt.
- It is apparent from the order for reference that the German State’s claim was the subject of a request for assistance for recovery by that Member State, and that neither the existence nor the lawfulness of that request was challenged.
- For its part, Pantochim has a claim against the Belgian State as a result of the application of tax provisions, which the Belgian State intends to set off, on the basis of Article 334 of the Programme-Law of 27 December 2004, against the aforementioned claim of the German State.
- Pantochim objected to that set-off and instituted proceedings in the tribunal de première instance du Hainaut, division de Mons (Court of First Instance, Hainaut, Mons Division, Belgium), which ruled that the Belgian State had no basis in law for such a set-off.
- By a judgment of 27 June 2016, the cour d’appel de Mons (Court of Appeal, Mons, Belgium) upheld that decision and ordered the Belgian State to pay the sum of EUR 502 991.47 plus interest to Pantochim.
Questions
(1) Must the provision according to which the claim in respect of which a request for recovery has been made “shall be treated as a claim of the Member State in which the requested authority is situated”, as provided for in [the second paragraph of] Article 6 of [Directive 2008/55], which replaces Article 6(2) of [Directive 76/308], be understood as meaning that the claim of the requesting State is to be treated as being a claim of the requested State, with the result that the claim of the requesting State acquires the status of a claim of the requested State?
(2) Must the term “privilege” referred to in Article 10 of [Directive 2008/55], and, before codification, in Article 10 of [Directive 76/308], be understood as the preferential right attached to the claim which confers on it a right of priority over other claims in the event of concurrent claims, or as any mechanism which results, in the event of concurrent claims, in the preferential payment of the claim?
Must the option available to the tax authority to carry out, under the conditions laid down by Article 334 of the Programme-Law of 27 December 2004, a set-off where there are concurrent claims be regarded as a privilege within the meaning of Article 10 of the abovementioned directives?
AG Opinion
see HERE
Decision
1. Article 6(2) of Council Directive 76/308/EEC of 15 March 1976 on mutual assistance for the recovery of claims resulting from operations forming part of the system of financing the European Agricultural Guidance and Guarantee Fund, and of the agricultural levies and customs duties, and the second paragraph of Article 6 of Council Directive 2008/55/EC of 26 May 2008 on mutual assistance for the recovery of claims relating to certain levies, duties, taxes and other measures must be interpreted as meaning that the claim of the requesting Member State is not to be treated as being a claim of the requested Member State and does not acquire the status of a claim of the requested Member State.
2. Article 10 of Directive 76/308 and Article 10 of Directive 2008/55 must be interpreted as meaning that:
– the term ‘privilege’ referred to in those provisions refers to any mechanism which results, in the event of concurrent claims, in the preferential payment of a claim;
– the option available to the requested Member State to set off claims in the event of concurrent claims constitutes a privilege, within the meaning of those provisions, where the use of that option has the effect of conferring on that Member State a preferential right or right of priority for the purposes of payment of its claims that is not available to the other creditors, which it is for the referring court to ascertain.
Source
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