Duitsland en Oostenrijk gedaagd voor EU-Hof vanwege BTW-regelgeving (en)

The Commission has decided to initiate infringement proceedings under Article 228 of the Treaty against Germany for failing to take the necessary measures to comply with the judgment delivered by the Court of Justice on 15 October 2002 giving producers of goods the right to deduct value added tax (VAT) in respect of the money-off vouchers which they issue. Proper application of the principles of VAT in this area enables producers of goods (everyday articles such as cosmetic products or household goods) to issue such vouchers and thus to allow consumers more frequent promotional price reductions. The Commission has also decided, pursuant to Article 226 of the Treaty, to initiate proceedings before the Court of Justice against Austria for taxing supplies of services obtained by a taxable person, with refund of VAT (on the basis of the Eighth VAT Directive), in another Member State. This practice has the effect of creating a non-deductible VAT charge for taxable persons which they are forced to pass on in their prices.

Germany

On 15 October 2002, the Court of Justice delivered a judgment in Case C-427/98 (Commission v Germany) in which it found that, by not allowing adjustment of the right to deduct VAT for producers of goods who have reimbursed a posteriori money-off vouchers used by final consumers to obtain the relevant goods at a reduced price, Germany is infringing Article 11 of the Sixth VAT Directive (77/388/EC). In its judgment, the Court upheld its earlier ruling given on 24 October 1996 in Case C-317/94 (Elida Gibbs Ltd). Despite the judgment handed down by the Court, Germany has not yet taken measures to enable its taxable persons to be refunded. Since Germany has not communicated the measures taken to comply with the judgment finding against it, the Commission has decided to initiate new infringement proceedings, based this time on Article 228 of the Treaty; the Commission may call for penalty payments to be imposed for failure to comply with a Court judgment.

Austria

As Community law stands at present, Member States may maintain restrictions on the right to deduct that existed in their national legislation at the time when the Sixth VAT Directive entered into force. These restrictions therefore differ from one Member State to another. Transactions in respect of which Austria does not allow deduction of VAT include the purchase, repair and rental of passenger cars.

In order to ensure that Austrian taxpayers do not procure these services in another Member State (in which no such restriction exists and where they can obtain refund of VAT on such expenses), Austria taxes all expenditure incurred in another Member State for services, already taxed in that other Member State, that would not be eligible for deduction of VAT in Austria, but for which VAT is recoverable in the other Member State.

These taxation arrangements applied by Austria infringe the Sixth VAT Directive, which provides that a single service cannot be taxed twice, in two different Member States. Furthermore, Austria cannot blame taxpayers for making use - quite legally - of the scope afforded them by the law as it stands. So long as the Member States have not reached agreement on harmonisation of the rules governing restrictions on the right to deduct VAT (the Commission put forward a proposal for such harmonisation in 1998), they have to accept the individual jurisdiction of Member States in this area. This means that Austria is not entitled to interfere with the jurisdiction of the other Member States and to apply internal taxation whose sole practical purpose is to undo the refund legally obtained in another Member State.

It should be noted that a request for a preliminary ruling on the same matter is currently before the Court of Justice (Case C-155/01) and that, in his opinion delivered on 10 October 2002, Mr Advocate General Geelhoed backed the Commission's analysis.

Recent information on infringement proceedings against Member States may be found at the following website:

http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm