Article in the VAT Directive
Article 5(8) of Directive 77/388/EEC 1 and Article 19 of Directive 2006/112/EC
Article 19 (Taxable transaction/Transfer of Going Concern)
In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.
Member States may, in cases where the recipient is not wholly liable to tax, take the measures necessary to prevent distortion of competition. They may also adopt any measures needed to prevent tax evasion or avoidance through the use of this Article.
Question
Do Article 5(8) of Directive 77/388/EEC 1 and Article 19 of Directive 2006/112/EC preclude national legislation such as Article 20 of Presidential Decree No 131 of 26 April 1986, as amended by points (1) and (2) of Article 1(87)(a) of Law No 205 of 27 December 2017 and by Article 1(1084) of Law No 145 of 30 December 2018, which requires that the tax authorities classify transactions between parties solely on the basis of the textual information contained in the relevant contract and prohibits the use of extrinsic (extratextual) information (even if it objectively exists and is proven), with the result that the tax authorities are absolutely precluded from proving that an economic supply, constituting a transfer of a business, which is in itself indissociable, has in reality been artificially broken down into a number of different supplies – multiple supplies of goods – and therefore gives rise to a right to deduct VAT where the requirements laid down by EU law are not met?
Order
In the present case, the order for reference clearly does not meet the requirement laid down in Article 94(c) of the Rules of Procedure.
- Indeed, by its sole question, the national court asks, in essence, whether Article 5(8) of the Sixth Directive and Article 19 of the VAT Directive preclude national legislation such as than Article 20 of the TUR, which excludes the possibility of taking into account contextual elements outside the contract to qualify a transaction for the purposes of its imposition on registration fees.
- It is true that, in order to qualify an operation as a ‘transmission […] of total or partial universality of assets’, within the meaning of Article 5(8) of the Sixth Directive or Article 19 of the VAT Directive, it is necessary to carry out an overall assessment of all the circumstances of the case, which may include taking into account the intentions of the parties provided that they are supported by objective elements (see, to this effect, judgments of 10 November 2011, Schriever, C‑444/10, EU:C:2011:724, paragraphs 32 and 38, and of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraphs 16 and 26), and that it is particularly necessary to take into account elements of context when an artificially broken down transaction is in question (see, to that effect, judgment of 4 March 2021, Frenetikexito, C‑581/19, EU:C:2021:167,points 38 and 39).
- However, it must be noted that the referring court is uncertain as to the compatibility with those provisions, as interpreted by the Court, of the national legislation on registration fees, which do not constitute a harmonized contribution to the within the European Union.
- As this is a situation which does not fall within the scope of the EU acts concerned, it is for the referring court to provide the information enabling the Court to verify that the provisions of those acts were adopted applicable to such a situation by national law, directly and unconditionally, within the meaning of the Court’s case-law (see, to that effect, judgment of 19 October 2017, Solar Electric Martinique, C‑303/16, EU:C :2017:773, points 27 and 32 as well as case law cited). In this case, the order for reference specifies that the characterization of the transaction at issue in the main proceedings as a transfer of business, adopted, in particular, by the tax authorities and with which the referring court appears to agree in view of the wording of the question asked, excludes its liability to VAT.
- It follows that, failing the national court to explain sufficiently how the interpretation of Article 5(8) of the Sixth Directive and of Article 19 of the VAT Directive is relevant for the application of Article 20 of the TUR, the Court cannot assess to what extent an answer to the question posed is necessary to enable that court to give its decision.
- Having regard to all of the foregoing considerations, this reference for a preliminary ruling is, pursuant to Article 53(2) of the Rules of Procedure, manifestly inadmissible.
- It should, however, be recalled that the referring court retains the option of submitting a new request for a preliminary ruling by providing the Court with all the information enabling it to rule (see, to that effect, judgment of 11 September 2019, Călin, C‑676/17, EU:C:2019:700, paragraph 41 and the case-law cited).
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