Case C-90/02

Finanzamt Gummersbach

v

Gerhard Bockemühl

(Reference for a preliminary ruling from the Bundesfinanzhof)

(Reference for a preliminary ruling – Interpretation of Article 18(1) of the Sixth VAT Directive – Conditions for exercise of the right to deduct input VAT – Recipient of a service referred to in Article 9(2)(e) of the Sixth VAT Directive – Supply of staff by a taxable person established abroad – Recipient liable for VAT as the person to whom the supply was made – Requirement to hold an invoice – Content of the invoice)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – Reverse charge procedure – Taxable person liable for value added tax as the person to whom goods or services provided – Right to deduct – Conditions – Holding of an invoice – No such condition

(Council Directive 77/388, Arts 18(1)(d), and 22(3))

Where the reverse charge procedure applies, a taxable person who is liable, as the recipient of services, for the value added tax relating thereto in accordance with Article 21(1) of the Sixth Directive 77/388, as amended by Directives 91/680 and 92/111, is not obliged to be in possession of an invoice drawn up in accordance with Article 22(3) of the Sixth Directive in order to be able to exercise his right to deduct.

Concerning the arrangements for exercising the right to deduct in cases where the reverse charge procedure applies, the only applicable provision is Article 18(1)(d) of the directive, whereby a taxable person who is liable as the recipient of services for the value added tax relating thereto has only to fulfil the formalities laid down by the Member State concerned. Whilst it is true, in that respect, that Member States must exercise the power to establish those formalities in conformity with one of the aims pursued by the directive, which is to ensure the collection of value added tax and its verification by the tax administration, and true also that an invoice has an important documentary function because it may contain verifiable data, that power may be exercised only in so far as, by the number or the technical nature of such formalities, their imposition does not make it practically impossible or excessively difficult to exercise the right to deduct.

For the tax administration, which has the information necessary to establish that the taxable person is, as the recipient of the supply in question, liable to the tax, to require as an additional condition for the right to deduct that that person be in possession of an invoice drawn up in conformity with Article 22(3) of the directive would result in a taxable person being, on the one hand, liable as the recipient of services for the value added tax in question, but, on the other hand, risking not being able to deduct that tax.

(see paras 47, 49, 51-53, operative part)

JUDGMENT OF THE COURT (Fifth Chamber) 1 April 2004 (1)

(Reference for a preliminary ruling – Interpretation of Article 18(1) of the Sixth VAT Directive – Conditions for exercise of the right to deduct input VAT – Recipient of a service referred to in Article 9(2)(e) of the Sixth VAT Directive – Supply of staff by a taxable person established abroad – Recipient liable for VAT as the person to whom the supply was made – Requirement to hold an invoice – Content of the invoice)

In Case C-90/02,

REFERENCE to the Court under Article 234 EC by the Bundesfinanzhof (Germany) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of Articles 18(1) and 22(3) of the 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), as amended by Council Directive 91/680/EEC of 16 December 1991 supplementing the common system of value added tax and amending Directive 77/388 with a view to the abolition of fiscal frontiers (OJ 1991 L 376, p. 1) and by Council Directive 92/111/EEC of 14 December 1992 amending Directive 77/388 and introducing simplification measures with regard to value added tax (OJ 1992 L 384, p. 47),

THE COURT (Fifth Chamber),,

composed of: P. Jann, acting for the President of the Fifth Chamber, A. Rosas and S. von Bahr (Rapporteur), Judges,

Advocate General: F.G. Jacobs,

after considering the written observations submitted on behalf of:

after hearing the oral observations of the Finanzamt Gummersbach, represented by F. Fürst, acting as Agent, of Mr Bockemühl, represented by J.A. Nohl and C. Hesener, Steuerberater, and of the Commission, represented by K. Gross and A. Böhlke, at the hearing on 11 September 2003,

after hearing the Opinion of the Advocate General at the sitting on 23 October 2003,

gives the following

…

…’

‘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:

…’

‘1.

…

3.…’

‘Where the taxable supply of goods or of services is effected by a taxable person who is not established within the territory of the country, Member States may adopt arrangements whereby tax is payable by another person. Inter alios a tax representative or the person for whom the taxable supply of goods or of services is carried out may be designated as that other person.

However, the tax is payable by the person to whom the supply of goods is made when the following conditions are met:

…

…’

…

…’

‘(1)

…

(3)

(4)

‘(2)

(3)

…’

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Bundesfinanzhof by order of 22 November 2001, hereby rules:

Jann

Rosas

von Bahr

Delivered in open court in Luxembourg on 1 April 2004.

R. Grass

V. Skouris

Registrar

President