(Reference for a preliminary ruling– Taxation– Value added tax (VAT)– Directive 2006/112

The first question

36By its first question, the referring court asks, in essence, whether Article167 of the VAT Directive must be interpreted as precluding national legislation which provides that the right of input tax deduction arises at the time the transaction takes place if, pursuant to a national derogation under point (b) of the first paragraph of Article66 of that directive, the tax becomes chargeable to the supplier of goods or services only when the remuneration is received and has not yet been paid.

37That court states that, under the first sentence of Article15(1)(1) of the UStG, the right of deduction arises where the goods or services have been supplied without taking into account the point in time when the tax becomes chargeable to the supplier of the goods or services. It is of little importance, in particular, whether that supplier calculates the tax, pursuant to the first sentence of Article16(1) of the UStG, on the basis of the remuneration agreed or that he or she calculates it, pursuant to Article20 of the UStG, on the basis of the remuneration received.

38As a preliminary point, it is necessary to address the referring court’s questions concerning the interpretation, arising from a declaration in the minutes of the Council and of the Commission on Article17(1) of Directive 77/388, according to which Article167 of the VAT Directive merely sets out a guiding idea and not a mandatory rule. In that regard, it must be borne in mind that such a declaration cannot be used for the purpose of interpreting a provision of secondary legislation where, as in the case in the main proceedings, no reference is made to the content of the declaration in the wording of the provision in question. The declaration therefore has no legal significance (judgment of 26February 1991, Antonissen, C‑292/89, EU:C:1991:80, paragraph18).

39According to the Court’s settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 27January 2021, De Ruiter, C‑361/19, EU:C:2021:71, paragraph39 and the case-law cited).

40As regards, in the first place, the wording of Article167 of the VAT Directive, it is clear and unambiguous, as the Advocate General observed in point49 of his Opinion. Article167 lays down a general rule that the origin of the right of input VAT deduction, for the recipient of goods or services, is determined at the time when the corresponding VAT becomes chargeable to the supplier of goods or services.

41As regards, in the second place, the context of that provision, it should be recalled that, under Article63 of the VAT Directive, the chargeable event is to occur and VAT is to become chargeable when the goods or the services are supplied.

42Nevertheless, point (b) of the first paragraph of Article66 of the VAT Directive states that Member States may, by way of derogation inter alia from Article63, provide that VAT is to become chargeable, in respect of certain transactions or certain categories of taxable person no later than the time the payment is received.

43Since it constitutes a derogation from the rule laid down in Article63 of the VAT Directive, Article66 of that directive must be interpreted strictly (judgment of 16May 2013, TNT Express Worldwide (Poland), C‑169/12, EU:C:2013:314, paragraph24 and the case-law cited).

44Although the fact that the EU legislature substantially extended the scope of the permitted derogations suggests that it intended to allow the Member States a wide margin of discretion, that does not allow the inference that a Member State has a discretion to establish a time at which the VAT becomes chargeable other than one of those specified in points (a), (b) and (c) of Article66 of the VAT Directive (judgment of 16May 2013, TNT Express Worldwide (Poland), C‑169/12, EU:C:2013:314, paragraph25 and the case-law cited).

45In order to ensure that Article66(1)(b) of the VAT Directive is interpreted consistently with Article167 of that directive, which provides that the right of deduction is to arise at the time the tax becomes chargeable, it must be concluded that, when, pursuant to Article66(1)(b), the tax becomes chargeable no later than the time the payment is received, the right of deduction also arises at the time when such payment is received.

46In the third place, that conclusion is supported by the objective pursued by the VAT Directive. First, it is important to note that that directive establishes a common system of VAT based, inter alia, on a uniform definition of taxable transactions. In particular, recital24 of that directive states that the concepts of ‘chargeable event’ and of the ‘chargeability of VAT’ should be harmonised if the introduction of the common system of VAT and of any subsequent amendments thereto are to take effect at the same time. The European Union legislature thereby intended maximum harmonisation of the date on which liability to pay VAT arises in all the Member States in order to ensure the uniform collection of that tax (judgment of 2May 2019, Budimex, C‑224/18, EU:C:2019:347, paragraphs21 and 22).

47Second, it should be recalled that the right of VAT deduction is a fundamental principle of the common system of VAT, which in principle may not be limited, and is exercisable immediately in respect of all the taxes charged on the taxable person’s input transactions (judgment of 21November 2018, Vădan, C‑664/16, EU:C:2018:933, paragraph37 and the case-law cited).

48That system is designed to relieve the trader entirely of the burden of the VAT due or paid in the course of all his or her economic activities. The common system of VAT consequently ensures that all economic activities, whatever their purpose or results, provided that they are themselves subject to VAT, are taxed in a wholly neutral way (judgment of 21November 2018, Vădan, C‑664/16, EU:C:2018:933, paragraph38 and the case-law cited).

49It should be noted, in that regard, that the conclusion in paragraph45 of the present judgment allows for application in accordance with those principles where the taxable person is able to obtain the right of input VAT deduction from the time when the tax becomes chargeable to the supplier of goods or services.

50That conclusion is not called into question by the argument put forward by the German Government that, since it has not made use of the option provided for in Article167a of the VAT Directive, the right of deduction arises as soon as the supply of goods or services is made in accordance with the relationship between Articles63 and 167 of that directive, irrespective of whether the tax becomes chargeable to certain taxable persons when the payment is received.

51As the Advocate General observed in point51 of his Opinion, if the EU legislature had intended that the right of deduction should invariably arise at the time of the supply of goods or services, it could have linked the timing of the right of deduction to the chargeable event which is not modified by the special rules contained in Articles64 to 67 of the VAT Directive, rather than to the time the VAT becomes chargeable, which is subject to those rules.

52Nor can the conclusion in paragraph45 of the present judgment be called into question by the argument put forward by the German Government that Article167a of the VAT Directive would not have independent scope alongside Article167 of that directive if the right of deduction were to arise on receipt of the payment in cases covered by point (b) of the first paragraph of Article66 of that directive.

53It should be pointed out that the purpose underlying the insertion of that Article167a was to enable all the Member States to introduce a derogation concerning the date on which the right of deduction may be exercised by taxable persons declaring VAT in the context of an optional cash accounting scheme intended to simplify the payment of VAT for small businesses (judgment of 16May 2013, TNT Express Worldwide (Poland), C‑169/12, EU:C:2013:314, paragraph34).

54Article167a states that Member States may provide within an optional scheme that the right of deduction of a taxable person whose VAT solely becomes chargeable in accordance with Article66(b) is to be postponed until the VAT on the goods or services supplied to him or her has been paid to his or her supplier.

55Article167a therefore allows taxable persons whose VAT solely becomes chargeable in accordance with Article66(1)(b) of the VAT Directive to delay their right of deduction until payment is made to their suppliers of goods or services.

56It should be noted, in that regard, that, as is apparent from recital4 of Directive 2010/45, Article167a was inserted into the VAT Directive to help small and medium-sized enterprises that encounter difficulties in paying VAT to the competent authority before they have received payment from their customers, and to allow Member States to introduce an optional cash accounting scheme that does not have a negative effect on cash flow relating to their VAT receipts.

57Article167a of the VAT Directive thus forms part of an optional scheme which the Member States may provide for, and whose application is itself part of the derogation already provided for moreover in Article66(1)(b) of that directive. It is therefore only in the circumstances provided for in Article167a that it is possible to sever the relationship between the chargeability of tax to the supplier of goods or services and the taxable person’s immediate right of input VAT deduction.

58In that regard, as the Advocate General observed, in essence, in point66 of his Opinion, Article167a of the VAT Directive has a much more limited scope than that of point (b) of the first paragraph of Article66 of that directive, since the latter was not initially adopted with cash accounting schemes for small and medium-sized undertakings in mind and does not lay down any turnover ceiling or require that the derogation be optional for the taxable persons concerned.

59Therefore, it must be held that Article167a concerns a specific and very limited derogation which cannot call into question the conclusion in paragraph45 above.

60In the present case, it should be noted, first, that the Federal Republic of Germany has made use of the option provided for in point (b) of the first paragraph of Article66 of the VAT Directive. It is apparent from the order for reference that the German legislature exercised its discretion under that provision by providing, in point 1 of Paragraph13(1)(b) of the UStG, that, in the case of supplies and other services, the tax is to become chargeable on the basis of remuneration received upon expiry of the prepayment period in which the remuneration was received.

61Secondly, as regards the question whether the transactions and taxable persons at issue in the main proceedings fall within the ‘transactions’ or ‘categories of taxable person’ referred to in Article66(1)(b) of the VAT Directive, it is apparent from the order for reference that Kollaustraße and its lessor have been authorised by the tax office under Paragraph20 of the UStG to charge VAT not on the basis of the remuneration agreed but on the basis of the remuneration received. They were therefore, subject to verifications by the referring court, taxable persons on whom VAT becomes chargeable no later than the time the payment is received, within the meaning of point (b) of the first paragraph of Article66 of the VAT Directive.

62Accordingly, subject to the verifications which are for the referring court to carry out as to the conditions for the application of the national derogation under point (b) of the first paragraph of Article66 of the VAT Directive and Article167 of that directive, it appears that Kollaustraße’s right of deduction arose at the time when the payment was received by its lessor.

63In the light of the foregoing considerations, the answer to the first question is that Article167 of the VAT Directive must be interpreted as precluding national legislation which provides that the right of input tax deduction arises at the time the transaction takes place if, pursuant to a national derogation under point (b) of the first paragraph of Article66 of that directive, the tax becomes chargeable to the supplier of goods or services only when the remuneration is received and has not yet been paid.

The second question

64Having regard to the answer given to the first question, there is no need to answer the second question.