Facts & questions released in the case C-164/24 (Cityland).
Articles in the EU VAT Directive
Articles 206, 213(1 ) and 273 of the EU VAT Directive 2006/112/EC.
Article 206 (Payment arrangements)
Any taxable person liable for payment of VAT must pay the net amount of the VAT when submitting the VAT return provided for in Article 250. Member States may, however, set a different date for payment of that amount or may require interim payments to be made.
Article 213 (Identification of taxable persons)
1. Every taxable person shall state when his activity as a taxable person commences, changes or ceases.
Member States shall allow, and may require, the statement to be made by electronic means, in accordance with conditions which they lay down.
Article 273
Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.
The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.
Facts & Background
Applicant ‘Cityland’ is a trading company that was active in the construction sector until 2019. An inspection was carried out by the tax authorities in 2022. Based on this inspection, it was concluded that there had been a systematic breach of the obligation to comply with the declared VAT. Cityland was subsequently removed from the value added tax register.
Consideration:
According to the referring court, the possibility of excluding taxable persons from the VAT system does not appear in Directive 2006/112. He therefore asks the Court questions about the automatic removal of taxpayers from the register and the conditions imposed for this.
Questions
1. Do Article 106(2)(2)(b) and Article 176(3) of the VAT Act infringe Article 213(1) of Council Directive 2006/122/EC of 28 November 2006 on the common system of value added tax?
2. If the first question is answered in the affirmative: Does Article 213(1) of Council Directive 2006/122/EC of 28 November 2006 on the common system of value added tax have direct effect?
3. If the first question is answered in the negative: Do Article 213(1) and Article 273 of Council Directive 2006/122/EC of 28 November 2006 on the common system of value added tax and the principles of legal certainty and proportionality allows the exclusion of a person from the VAT system for formal infringements, without taking into account the time and nature of the infringement, the other conduct of that person and the existence of other subjective circumstances such as a commercial dispute regarding late payment of the VAT due?
4. If the first question is answered in the negative: Do Article 213(1) and Article 273 of Council Directive 2006/122/EC of 28 November 2006 on the common system of value added tax and the principles of legal certainty and proportionality allows that the exclusion from the VAT system is simultaneously accompanied by the collection of default interest for failure to pay the declared VAT on time, without the tax authorities being obliged to determine the nature of the company’s activities, its behavior as a taxable person and the severity of each of the proposed measures?
Source
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