On November 27, 2008, the Ecj issued the Order in the case C-151/08 (Renta).
Context: ax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Prohibition on the levying of other domestic taxes which can be characterised as turnover taxes (Council Directive 77/388, Art. 33(1)) (see paras 36-38, 43, 46, operative part)
Article in the EU VAT Directive
Article 33, paragraph 1, of Council Directive 77/388/EEC ((Article 401 of the EU VAT Directive 2006/112/EC).
Article 401
Without prejudice to other provisions of Community law, this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties or, more generally, any taxes, duties or charges which cannot be characterised as turnover taxes, provided that the collecting of those taxes, duties or charges does not give rise, in trade between Member States, to formalities connected with the crossing of frontiers.
Facts
- Renta requests the refund of the tax on documented legal acts that is levied on a public deed of sale of a property dated April 28, 2003. In said deed, Renta purchased, within the framework of its business activity of purchase and sale of real estate or its purchase for subsequent transformation or leasing, the property described therein.
- In its ruling, the referring court states the following:
- Renta’s business activity consists of the purchase and sale of real estate or its purchase for subsequent transformation or leasing, so that the transaction of purchase and sale of real estate is simultaneously taxed with value added tax (hereinafter, “VAT”). and with the tax on documented legal acts is, precisely, what constitutes the business activity of that entity.
- The refund of undue income that Revenue requests is limited to the gradual or variable rate of the tax, without affecting the fixed rate, which is not subject to challenge.
- The taxable person, both for VAT and for the gradual payment of the tax on documented legal acts, is Income, as the buyer of the real estate, to whom the VAT is charged and the tax on documented legal acts is transferred, in which two cases due to their own business activities.
- Before the referring court, Renta had argued that, taking into account the identity of the taxable event, the taxable amount and the taxpayer of VAT and stamp duty, Article 33 of the Sixth Directive precludes the requirement of the latter. The Superior Court of Justice of Catalonia expresses its doubts regarding the compatibility of said tax with article 33 of the Sixth Directive.
- It points out that, in a ruling of November 3, 1997 (appeal no. 523/1995), the Supreme Court declared that, with regard to the gradual payment of the tax, the taxable event is not the notarial document, but an entity complex constituted, in particular, by the performance of certain acts or contracts.
- On the other hand, the Superior Court of Justice of Catalonia refers to the judgment of 27 October 1998, FECSA and ACESA (C-31/97 and C-32/97, ECR I-6491), in which, in ruling on the compatibility of the stamp duty tax with Council Directive 69/335/EEC of 17 July 1969 on indirect taxes on the concentration of capital (OJ L 249, p. 25; EE 09/01, p. 22), the Court of Justice declared that Article 11(b) of this Directive, which prohibits taxes on loans and the formalities related to them, also applies to the tax taxes notarial deeds of loan cancellation. According to the referring court, these considerations are relevant in the main case, due to their general nature, as regards the nature of the stamp duty.
- The referring court also refers to the judgment of 16 December 1992 in Case C-208/91 Beaulande [1992] ECR I-6709, in which the Court of Justice declared that Article 33 of the Sixth Directive does not oppose the collection of registration fees on the acquisition of building land, in case of non-compliance with the commitment to build within a certain period, since such fees do not constitute a general tax, since they only apply to real estate. real estate, transferred for consideration, the transfer of which gives rise to a certain number of formalities.
- According to the Superior Court of Justice of Catalonia, this jurisprudence is not applicable to the tax on documented legal acts, since:
- This tax is applied, in general, and like VAT, to economic transactions that can be registered in a public registry, regardless of their effective registration, so that all public deeds of sale of real estate in which the buyer is a businessman are taxed by both taxes.
- In the case examined by the Court of Justice, registration fees were collected only when the property entered the assets of the final consumer, whereas, here, the tax on documented legal acts is accrued, like VAT, within of the process of production and distribution of goods, in this case, real estate acquired by a real estate company for its transformation and subsequent leasing.
- Both taxes accrue in each of the phases of the production and distribution process.
- The referring court considers that the case law of the Supreme Court, relied on by the Public Prosecutor’s Office, is not relevant to the main case. In his opinion, said jurisprudence refers to mortgage loan operations carried out by businessmen or professionals. In such a case, the taxpayer in question is the borrower, whose business activities do not include borrowing money. On the contrary, in the main case, the taxpayer of both VAT and the graduated rate of the tax on documented legal acts is a company whose activity consists, and principally, of the purchase and sale of real estate, an activity subject to the tax on documented legal acts. documented legal
- The referring court considers that the maintenance of the gradual part of the tax on documented legal acts may infringe Article 33 of the Sixth Directive, since it generates inequalities depending on the economic agents involved in the operations, taxes the circulation of goods subject to VAT and non-exempt, taxes the same taxable event as VAT and constitutes, consequently, an additional tax that is added to the VAT amount. The tax on documented legal acts is generally applied to transactions involving goods or services. In particular, practically all property sales are carried out through a notarial public deed, which is already taxed by the fixed fee. The gradual fee is proportional to the price of the good, without prejudice to the Tax Administration carrying out a check aimed at avoiding tax evasion, and is accrued in each of the production and distribution phases. The referring court recognizes that there is an essential difference between VAT and stamp duty, namely the impossibility of deduction of the latter. However, this difference does not constitute an obstacle to proclaiming the incompatibility of this tax with Article 33 of the Sixth Directive, but, on the contrary, confirms said incompatibility.
Questions
Is it compatible with Article 33 of the Sixth Council Directive 77/388/EEC 1 of 17 May 1977 to maintain the variable or proportional amount of the duty on documented legal transactions when the latter is chargeable on the conclusion of a purchase by an undertaking whose business activity consists of buying and selling immovable property or purchasing immovable property for development or letting, the chargeable event or transaction, the basis of assessment and the taxable person in respect of the duty on documented legal transactions being the same as those in respect of value added tax, which is chargeable simultaneously in respect of the same purchase?
AG Opinion
None
Decision
Article 33, paragraph 1, of Council Directive 77/388 / EEC of 17 May 1977, Sixth Directive on the harmonization of the laws of the Member States relating to turnover taxes – Common system value added tax: uniform tax base, as amended by Council Directive 91/680 / EEC, of December 16, 1991, must be interpreted in the sense that it does not prevent the collection of the gradual or proportional tax of the tax on patrimonial transfers and documented legal acts when it is applied to the formalization of a sale carried out by an entrepreneur whose activity consists of the sale of real estate or its purchase for its subsequent transformation or lease.
Summary
The ECJ issued an Order in the case C-151/08 (Renta) related to the harmonization of laws on turnover taxes. Renta requested a refund of the tax on legal acts for a property purchase, arguing that it conflicted with Article 33 of the EU VAT Directive. The referring court expressed doubts about the compatibility of the tax with the Directive and referred to previous judgments. The court also noted that the tax on legal acts applies to economic transactions that can be registered in a public registry, regardless of their effective registration.
Source:
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