On May 14, 2020, the ECJ issued his decision in the case C-446/18 (Agrobet vs CZ) on the possibility of withholding the excesses VAT in favour of taxpayers when control procedures are developed, making considerations of great interest.
Articles in the EU VAT Directive
Articles 179, 183 and 273 of Council Directive 2006/112/EC
Facts
The controversy arose in relation to the possible exemption of certain intra-EU deliveries made by the claimant, which was denied by the tax authorities. Considering that the doubts related only to a small part of the declared VAT excess, Agrobet argued that the withholding of all that excess was disproportionate, requesting payment of the uncontroversial part of said excess, that is, the part related to operations not contemplated in said procedures. The refusal to proceed in this way gave rise to the dispute.
Against this background, what was raised before the ECJ is whether articles 179, 183 and 273 of the VAT Directive, in light of the principle of fiscal neutrality, oppose a national regulation that does not foresee the possibility that, before of the termination of a control procedure related to a VAT declaration that reflects an excess corresponding to a certain period, the tax authorities return the part of said excess related to operations that are not the object of the aforementioned procedure at the time of its initiation.
Questions
1. Does Article 179 of the VAT Directive permit only an assessment of the total amount of excess VAT?
2. Can national law preclude a partial refund pursuant to Article 183 of the VAT Directive?
3. Limitation based on Article 273 of the VAT Directive?
AG Opinion
It is not consistent with Articles 167 and 168 of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, in the light of the principle of neutrality, to defer the assessment and payment of the undisputed part of the excess VAT claimed for an indefinite period of time until the disputed part of the excess VAT claimed has been adequately inspected.
Decision
Articles 179, 183 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in the light of the principle of fiscal neutrality, must be interpreted as meaning that they not oppose a national scheme that does not provide for the possibility for the tax administration to transfer before the completion of a tax audit in respect of a value added tax (VAT) return in which a VAT surplus is stated for a particular tax period to refund the part of that surplus that relates to transactions not covered by that control at the start of the transaction, in so far as it cannot be clearly, precisely and unambiguously established that a VAT surplus,the amount of which may be less than that of the transactions not covered by that check will continue to exist regardless of the outcome of that check, which is for the referring court to ascertain.
Source
Newsletters
- Taxlive (in Dutch)
- Francisco Javier Sánchez Gallardo
- PWC Avocats
- Partial refund of excess VAT claimed (upcoming amendment to CZ tax administration act?) by Ondřej Štědrý
- KPMG
- Swedish Tax Agency can postpone VAT refund to investigate further
