ECJ C-37/23 (Giocevi) – Order – 60% VAT refund after earthquake violates EU law

The ECJ issued the preliminary ruling request in the case C-37/23 (Giocevi).

Reference for a preliminary ruling – Article 99 of the Rules of Procedure of the Court of Justice – Common system of value added tax (VAT) – Directive 2006/112/EC – Articles 2, 206 and 273 – Principle of fiscal neutrality – Reduction of the VAT payable by taxable persons affected by the earthquake of 6 April 2009 in the Abruzzo region)

Summary

In the case C-37/23 (Giocevi), the European Court of Justice (ECJ) issued a preliminary ruling request regarding the application of value-added tax (VAT) in relation to the earthquake that affected the Abruzzo region in Italy on April 6, 2009. The taxpayer, a notary public, requested a refund of VAT paid during the period from April 2009 to December 2010, as the tax had been reduced to 40% of the amounts due according to Article 33(28) of Law No 183 of 12 November 2011. However, the Revenue Agency rejected the application, arguing that the provision excluded the reimbursement of amounts already paid.

The taxpayer appealed the decision, arguing that taxpayers who had not paid the tax but were eligible for a reduction should be treated similarly to those who had made payments and requested reimbursement. The Regional Tax Commission upheld the taxpayer’s appeal and declared the refusal to grant the VAT refund unlawful. The Revenue Agency appealed this decision to the Court of Cassation, which referred the case to the ECJ for a preliminary ruling.

The question before the ECJ was whether a legislative provision, such as Article 33(28) of Law No 183 of 2011, which allowed taxpayers affected by the earthquake to obtain a 60% refund of the VAT paid between April 2009 and December 2010, was compatible with EU law. The ECJ interpreted Articles 2, 206, and 273 of Council Directive 2006/112/EC, along with the principle of fiscal neutrality, and concluded that national legislation providing for such a reduction in VAT was not permissible. Therefore, the ECJ ruled that the VAT refund scheme in question was incompatible with EU law.

Article in the EU VAT Directive

Articles 2, 206 and 273 and recital 45 of Council Directive 2006/112/EC of 28 November 2006 (Sixth VAT Directive); Article 108(3) TFEU; Article 11(1) of Regulation (EC) No 659/1999.

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 273 (Misc. provisions)
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. ▼B

Facts

PR, a notary public, requested a refund of the sum of €102,088 as VAT paid for the period from April 2009 to December 2010, since the tax, the payment of which had initially been suspended in response to the earthquake affecting Abruzzo that occurred on 6 April 2009, had then been reduced to 40% of the amounts due, pursuant to Article 33(28) of Law No 183 of 12 November 2011. The Revenue Agency rejected the application on the ground that the provision in question excluded the reimbursement of amounts already paid.
The taxpayer’s appeal against the refusal was rejected by the Provincial Tax Commission, which held that the reduction was to be applied to the amount outstanding, and did not concern payments already made.
The taxpayer appealed to the Regional Tax Commission, arguing that the situation involving subjects who had not paid the tax, and were eligible for a reduction in the payment due, should be considered analogous to that of subjects who, on the other hand, after making payments, request the reimbursement of the higher sums paid, an argument in line with the interpretation by the Court of Cassation of the analogous provision in Article 9(17) of Law no. 289 of 27 December 2002, referring to the 1990 earthquake in Sicily. The Revenue Agency contested the
taxpayer’s argument, as it concerned VAT, and requested, in any event, that the case be suspended pending the European Commission’s decision C(2012) 7128 final of 17 October 2012 initiating the formal investigation procedure under Article 108 TFEU, containing the injunction requiring the suspension of State aid incompatible with EU law.
The Regional Tax Commission, reversing the judgment at first instance, upheld the taxpayer’s appeal and declared unlawful the refusal to grant the VAT refund. The Revenue Agency lodged the present appeal against the judgment with the Court of Cassation, to which the taxpayer responded with a counter-appeal.

Questions

Do the principles set out in the order [of 15 July 2015,] Revenue Agency v Nuova Invincibile srl, C-82/14, EU:C:2015:510, and in the judgment of 17 July 2008, Commission v Italy, C-132/06, EU:C:2008:412, preclude a legislative provision, such as that resulting from Article 33(28) of Legge (Law) No. 183 of 2011, which allows taxpayers to obtain a refund, at the rate of 60%, of the VAT paid in the period between April 2009 and December 2010, in relation to the earthquake which affected the Abruzzo territory on 6 April 2009?

AG Opinion

None

Decision

Articles 2, 206 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with the principle of fiscal neutrality,

must be interpreted as precluding national legislation that provides, for taxable persons affected by the earthquake that struck the region of Abruzzo (Italy), for a 60% reduction of the value added tax amount normally payable by those persons for the period from April 2009 to December 2010.

Source