Case C-395/02

Transport Service NV

v

Belgische Staat

(Reference for a preliminary ruling from the Rechtbank van eerste aanleg te Antwerpen)

(Article 104(3) of the Rules of Procedure – First and Sixth VAT Directives – Principle of fiscal neutrality – Application of VAT to each production or distribution transaction – Recovery)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Supply of goods wrongly invoiced as being exempt from tax – Recovery, after the event, from the taxable person making the supply – Not a breach of the principle of fiscal neutrality – Tax on the later sale of the goods to the end user paid to the public purse – Not relevant

(Council Directives 67/227 and 77/388)

The principle of the neutrality of the common system of value added tax does not preclude a Member State from recovering value added tax, after the event, from a taxable person which has wrongly invoiced a supply of goods as being exempt from that tax. It is irrelevant, in that regard, whether the value added tax on the later sale of the goods concerned to the end user has been paid to the public purse or not.

(see para. 3, operative part)

ORDER OF THE COURT (Fifth Chamber) 3 March 2004 (1)

(Article 104(3) of the Rules of Procedure – First and Sixth VAT Directives – Principle of fiscal neutrality – Application of VAT to each production or distribution transaction – Recovery)

In Case C-395/02,

REFERENCE to the Court under Article 234 EC by the Rechtbank van eerste aanleg te Antwerpen (Belgium) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of the principle of the neutrality of the common system of value added tax,

THE COURT (Fifth Chamber),

composed of: C. Gulmann, President of the Chamber, S. von Bahr (Rapporteur) and R. Silva de Lapuerta, Judges,

Advocate General: L.A. Geelhoed,

after hearing the Opinion of the Advocate General,

‘The principle of the common system of value added tax involves the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which the tax is charged.

On each transaction, value added tax, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of value added tax borne directly by the various cost components.

The common system of value added tax shall be applied up to and including the retail trade stage.’

‘The following shall be liable to pay value added tax:

1.‘Without prejudice to other Community provisions and subject to conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions provided for below and preventing any evasion, avoidance or abuse, Member States shall exempt:

(a)

‘Does the principle of the neutrality of value added tax preclude a Member State from claiming additional VAT from a taxable person which has issued an invoice, correctly or otherwise, in accordance with the VAT exemption applicable to intra-Community supplies (Article 39(a) of the Belgian VAT Code) where it is evident that the VAT has been paid by the end user and transferred to the Member State by the person who drew up the invoice issued to that end user?’

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Rechtbank van eerste aanleg te Antwerpen by order of 4 November 2002, hereby rules:

Luxembourg, 3 March 2004.

R. Grass

C. Gulmann

Registrar

President of the Fifth Chamber