The ECJ issued the facts & questions in the case C-680/23 (Modexel).
Article in the EU VAT Directive
Article 183 of the EU VAT Directive 2006/112/EC.
Article 183 of the VAT Directive (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.
Facts
- Modexel – Consultores e Serviços, SA, filed a declaration of cessation of activity with effect from 28 February 2015.
- At the time of cessation of activity, it declared a balance in its favour in respect of valued added tax (VAT) in the amount of EUR 12 456.20.
- It recommenced its activity on 10 May 2016, filing the appropriate declaration of recommencement of activity.
- When it recommenced its activity, it deducted the amount of the balance in its favour, seeking to offset that amount in the first return filed after it recommenced its activity.
- The Tax Authority of the Autonomous Region of Madeira refused to allow it to do so, arguing that Modexel – Consultores e Serviços, SA should have applied for a refund of the balance in its favour within 12 months from the date on which it ceased its activity and that, since it had not done so, that amount had reverted to the Portuguese State.
Questions
1) Must the expression “the following period” in Article 183 of the VAT Directive be interpreted as referring literally to the period which immediately follows in the calendar year?
2) If the answer to question 1 is in the negative, where an undertaking ceases its activity and subsequently recommences that activity, with a period of 15 months having elapsed between those two points in time, is that undertaking entitled to deduct the amount of the excess which it carried forward when it ceased its activity in the first assessment that it files after recommencing its activity?
Source
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
