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Flashback on ECJ Cases – C-211/16 (Bimotor) – National regulation may limit the offsetting of certain tax debts with VAT credits to a specified maximum amount for each period of ‘tax

On March 16, 2017, the ECJ issued its decision in the case C-211/16 (Bimotor).

Context: Reference for a preliminary ruling – Value added tax – Principle of fiscal neutrality – National legislation providing for a fixed maximum ceiling limiting the amount of reimbursement or compensation for credit or excess value added tax

Article in the EU VAT Directive

Article 183 of the EU VAT Directive 2006/112/EC.

Article 183 (Right to deduct VAT – Rules Governing Exercise of the Right of Deduction)

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of the excess is insignificant.


  • It is apparent from the order for reference that Bimotor benefited, for 2013, from a VAT credit in the amount of EUR 1,727,104. It proceeded to offset the taxes due by claiming this credit up to 775,055.72 euros, i.e. to a greater extent than the amount of 700,000 euros authorized under Article 34, paragraph 1 of Law No. 388/2000.
  • During 2015, the provincial tax administration noted that Bimotor had not fulfilled its tax obligations by using the VAT credit in excess of 700,000 euros in the context of the disputed compensation. It therefore proceeded to recover income tax for the sum of 75,055.72 euros considered unpaid due to the failure to take this amount into account during the compensation, limited to 700,000 euros. It also imposed the payment of interest in the amount of 2,870.62 euros and a penalty of 22,516.72 euros, corresponding to 30% of the amount considered unpaid.
  • Bimotor proceeded to regularize its situation. However, it disputes the measure by which the provincial tax administration carried out the recovery of the sum exceeding the amount of 700,000 euros by calculating the interest thereon and at the same time imposing the corresponding penalties. In support of its appeal, Bimotor argues that the tax credit available to it is not contested, but that the provincial tax administration, noting that the maximum refundable amount provided for by national regulations was exceeded, applied to the tax credit. ‘The recovery and sanction regime that is provided for payment defaults exceeds and has thus imposed even heavier penalties than those provided for by national regulations in the event that the payment is not made.
  • The Commissione tributaria provinciale di Torino (Provincial Fiscal Commission of Turin, Italy) considers that, before ruling on the appeal, it is necessary to examine the compatibility with European Union rules of the national legislation on the basis from which the provincial tax administration adopted the contested measure.
  • Referring to recitals 5, 7, 13, 30 and 34 of the VAT Directive, the referring court points out that the determining factor of VAT is its neutrality or, in other words, the fact that it cannot not, by its nature, be qualified as a cost or as a financial burden for economic operators. However, the setting of an annual ceiling for the compensation or reimbursement of VAT credits means that for the surplus part, the credits which cannot be compensated or recovered in reality constitute costs or financial charges, although transitory, for the economic operator. It refers in particular to the judgment of 22 October 2015, PPUH Stehcemp (C ‑ 277/14, EU: C: 2015: 719).
  • The referring court also points out that the limitation on the amount of the compensation and the reimbursement of the VAT credit has, moreover, because it weighs only on economic operators required to pay VAT in Italy, distorting effects competition by imposing on them non-existent charges for their competitors who do not pay tax in Italy.


Does the Community legislation on VAT (Sixth Council Directive 77/388/EEC  of 17 May 1977, as amended by Directive 2002/38/EC and Directive 2006/112/EC) preclude legislation of a Member State — such as Article 34(1) of Law No 388 of 23 December 2000 — under which VAT claims may be repaid or used to offset tax owed, for a given tax year, not in their entirety but only up to a predetermined maximum limit?

AG Opinion



Article 183, first paragraph, of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45 / EU of 13 July 2010 , must be interpreted as meaning that it does not preclude national legislation, such as that at issue in the main proceedings, which limits the offsetting of certain tax debts with value added tax credits to a specified maximum amount, for each period of ‘tax, provided that the national legal system in any case provides for the possibility for the taxable person to recover all the value added tax credit within a reasonable time.

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