Gabalfrisa SL And Others V Agencia Estatal De Administración ...

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Judgment of the Court of 21 March 2000. - Gabalfrisa SL and Others v Agencia Estatal de Administración Tributaria (AEAT). - Reference for a preliminary ruling: Tribunal Económico-Administrativo Regional de Cataluña - Spain. - Meaning of national court or tribunal for the purposes of Article 177 of the EC Treaty (now Article 234 EC) - Admissibility - Value added tax - Interpretation of Article 17 of Sixth Directive 77/388/EEC - Deduction of tax paid on inputs - Activities prior to carrying out economic transactions on a regular basis. - Joined cases C-110/98 to C-147/98. European Court reports 2000 Page I-01577

Summary Parties Grounds Decision on costs Operative part

1. Preliminary rulings - Reference to the Court - National court or tribunal within the meaning of Article 177 of the Treaty (now Article 234 EC) - Definition - Tribunales Económico-Administrativos with jurisdiction to hear fiscal complaints - Inclusion

(EC Treaty, Art. 177 (now Art. 234 EC))

2. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Deduction of input tax - Activities prior to carrying out taxable transactions on a regular basis - Requirements - Infringement - Penalty - Forfeiture of the right to deduct or deferment of the exercise of that right - Unlawful

(Directive 77/388, Art. 17)

1. In order to determine whether a body making a reference is a court or tribunal for the purposes of Article 177 of the Treaty (now Article 234 EC), it is important to take account of a number of factors, such as whether the body is established by law, whether it is permanent, whether its jurisdiction is compulsory, whether its procedure is inter partes, whether it applies rules of law and whether it is independent. The Tribunales Económico-Administrativos in Spain which have jurisdiction to hear fiscal complaints satisfy those criteria.

( see paras 33, 41 )

2. Article 17 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes precludes national legislation which makes the exercise of the right to deduct value added tax paid by a taxable person liable thereto before he starts regularly carrying out taxable transactions conditional upon the fulfilment of certain requirements such as the submission of an express request to that effect before the tax concerned becomes due and compliance with a time-limit of one year between that submission and the actual commencement of taxable transactions, and which penalises infringement of those requirements by forfeiture of the right to deduct or deferment of the exercise of that right until the time at which taxable transactions actually begin to be carried out on a regular basis.

( see para. 55 and operative part )

In Joined Cases C-110/98 to C-147/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the Tribunal Económico-Administrativo Regional de Cataluña, Spain, for a preliminary ruling in the proceedings pending before that court between

Gabalfrisa SL and Others

and

Agencia Estatal de Administración Tributaria (AEAT)

on the interpretation of Article 17 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, J.C. Moitinho de Almeida (Rapporteur), L. Sevón and R. Schintgen (Presidents of Chambers), P.J.G. Kapteyn, C. Gulmann, J.-P. Puissochet, G. Hirsch, P. Jann, H. Ragnemalm and M. Wathelet, Judges,

Advocate General: A. Saggio,

Registrar: R. Grass,

after considering the written observations submitted on behalf of:

- Tarragona 161 SA (C-112/98 and C-136/98), by F. Alonso Fernández, E. Andres and A. Azpeitia Gamazo, of the Madrid Bar,

- Gran Vía Zaragoza SA (C-116/98 and C-118/98 to C-120/98), by M. Laborda Aured, authorised agent,

- Savigi 89 SA (C-123/98), by G. Galiano Quesada, of the Barcelona Bar,

- Plácida Jiménez SL (C-125/98), by J. Jiménez Cano, authorised agent,

- Jesús Corral García, (C-132/98), in person,

- Gesba SA (C-137/98), by M. Casasus Camps, authorised agent,

- Estació de Servei El Trevol SL (C-138/98), by J. Gibert Canet, of the Barcelona Bar,

- Bungy Fun Germany GBDR (C-147/98), by F. Marcos, of the Tarragona Bar,

- the Spanish Government, by M. López-Monís Gallego, Abogado del Estado, acting as Agent,

- the Greek Government, by M. Apessos, Assistant Legal Representative of the State Legal Service, and A. Rokofyllou, Legal Assistant in the European Law Department of the Special Legal Service of the Ministry of Foreign Affairs, acting as Agents,

- the Commission of the European Communities, by M. Díaz-Llanos La Roche, Legal Adviser, and C. Gómez de la Cruz, of its Legal Service, acting as Agents,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 7 October 1999,

gives the following

Judgment

1 By orders of 19 December 1997 (C-110/98 to C-115/98, C-117/98, C-120/98 and C-125/98 to C-146/98), of 30 January 1998 (C-121/98 to C-124/98 and C-147/98) and of 25 February 1998 (C-116/98, C-118/98 and C-119/98), all received at the Court on 14 April 1998, the Tribunal Económico-Administrativo Regional de Cataluña (Regional Economic and Administrative Court, Catalonia) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) a question on the interpretation of Article 17 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; the Sixth Directive).

2 That question was raised in proceedings between several entrepreneurs or professional practitioners and various departments of the Agencia Estatal de Administración Tributaria (State Tax Administration Agency; the AEAT) concerning the deduction of value added tax (VAT) paid in respect of transactions carried out prior to the commencement of their activity.

The Sixth Directive

3 Article 4(1) and (2) of the Sixth Directive, which defines the concept of taxable persons, provides:

1. "Taxable person" shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity.

2. The economic activities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity.

4 Article 17 of the Sixth Directive, which governs the right to deduct, states:

1. The right to deduct shall arise at the time when the deductible tax becomes chargeable.

2. In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

(a) value added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person;

...

5 Article 22 of the Sixth Directive, which governs the obligations of persons liable for payment under the internal system, provides:

1. Every taxable person shall state when his activity as a taxable person commences, changes or ceases.

...

8. Without prejudice to the provisions to be adopted pursuant to Article 17(4), Member States may impose other obligations which they deem...

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