VATupdate

ECJ C-9/20 (Grundstücksgemeinschaft Kollaustraße 136) – Opinion – May a Member State allow to claim input VAT in a different period then that in which output VAT became due?

On September 9, the ECJ issued the AG Opinion in the case C-9/20 (Grundstücksgemeinschaft Kollaustraße 136).

The German court raised questions on 18 February 2020 regarding the lease of real estate for business purposes and the moment input VAT can be deducted.  Today (9 September 2021), Advocate General Evgeni Tanchev provided it’s advice to the court.


Articles in the EU VAT Directive

Article 66

By way of derogation from Articles 63, 64 and 65, Member States may provide that VAT is to become chargeable, in respect of certain transactions or certain categories of taxable person at one of the following times:
(a) no later than the time the invoice is issued;
(b) no later than the time the payment is received;
(c) where an invoice is not issued, or is issued late, within a specified time no later than on expiry of the time-limit for issue of invoices imposed by Member States pursuant to the second paragraph of Article 222 or where no such time-limit has been imposed by the Member State, within a specified period from the date of the chargeable event.
The derogation provided for in the first paragraph shall not, however, apply to supplies of services in respect of which VAT is payable by the customer pursuant to Article 196 and to supplies or transfers of goods referred to in Article 67.

Article 66a

By way of derogation from Articles 63, 64 and 65, the chargeable event of the supply of goods by a taxable person who is deemed to have received and supplied the goods in accordance with Article 14a and of the supply of goods to that taxable person shall occur and VAT shall become chargeable at the time when the payment has been accepted.

Article 167
A right of deduction shall arise at the time the deductible tax becomes chargeable.


Facts

The German court raised questions on 18 February 2020 regarding the lease of real estate for business purposes and the moment input VAT can be deducted.

  • Applicant was leasing property intended for business purposes.
  • Applicant and its landlord had validly waived a the VAT exemption and opted for VAT.
  • To both, the German tax authorities had authorised to report/pay the VAT based on cashflow.
  • From 2004 onwards, deferral of payment was granted for part of the rent payable by the applicant.
  • As a result, in the years 2013 to 2016 applicant made payments for the lease in the years 2009 to 2012.
  • These payments included 19% VAT.
  • Applicant always exercised its right to deduct input VAT in the period in which the payment was made.
  • However, the inspector was of the opinion that the law on deduction of input VAT had already arisen at the time the transaction was carried out, and should therefore have been exercised each time for the period in question.
  • The question is, among other things, whether the right to deduct input VAT in accordance with Article 167 of the VAT Directive without exception always arises only at the time when the deductible tax becomes chargeable, or whether the
    Member States may derogate from this principle.

Questions

Does Article 167 of Directive 2006/112/EC of 28 November 2006 on the common system of valued added tax 1 preclude a provision of national law according to which the right of input tax deduction already arises at the time the transaction is performed, even if, under national law, the tax claim against the supplier or service provider arises only when the remuneration is received and the remuneration has not yet been paid?

If the first question is answered in the negative: Does Article 167 of Directive 2006/112/EC of 28 November 2006 on the common system of valued added tax preclude a provision of national law according to which the right of input tax deduction cannot be asserted for the tax period in which the remuneration has been paid if the tax claim against the supplier or service provider arises only when the remuneration is received, the service has already been provided in an earlier tax period and, under national law, due to the matter being time-barred, it is no longer possible to assert the input tax claim for that earlier tax period?


AG Opinion

Article 167 of Directive 2006/112/EC of 28 November 2006 on the common system of valued added tax must be interpreted as precluding a provision of national law according to which the right to deduct input tax arises already at the time the transaction is performed even if, in accordance with a national derogation pursuant to Article 66(b) of the that directive, the tax claim against the supplier or service provider arises only when the remuneration is received and the remuneration has not yet been paid.


Decision


Personal comments/VATupdate 

The German verdict can be read here.


Source


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