JUDGMENT OF THE COURT (Second Chamber)

7 April 2016 ( *1 )

‛Reference for a preliminary ruling — Taxation — VAT — Article 4(3) TEU — Directive 2006/112/EC — Insolvency — Procedure for an arrangement with creditors — Partial payment of VAT debts’

In Case C‑546/14,

REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunale di Udine (District Court, Udine, Italy), made by decision of 30 October 2014, received at the Court on 28 November 2014, in the proceedings brought by

Degano Trasporti Sas di Ferruccio Degano & C ., in liquidation,

intervening party:

Pubblico Ministero presso il Tribunale di Udine,

THE COURT (Second Chamber),

composed of M. Ilešič, President of the Chamber, C. Toader, A. Rosas, A. Prechal and E. Jarašiūnas (Rapporteur), Judges,

Advocate General: E. Sharpston,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

—

Degano Trasporti Sas di Ferruccio Degano & C., in liquidation, by P. Bregalanti, avvocato,

—

the Italian Government, by G. Palmieri, acting as Agent, and by G. De Bellis, avvocato dello Stato,

—

the Spanish Government, by A. Gavela Llopis, acting as Agent,

—

the European Commission, by F. Tomat, A. Caeiros and L. Lozano Palacios, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 14 January 2016,

gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 4(3) TEU and of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ( OJ 2006 L 347, p. 1 , ‘the VAT Directive’).

2The request has been made in the context of an application for an arrangement with creditors brought by Degano Trasporti Sas di Ferruccio Degano & C., in liquidation (‘Degano Trasporti’), before the Tribunale di Udine (District Court, Udine, Italy).

Legal context

EU law

3Pursuant to Article 2(1)(a), (c) and (d) of the VAT Directive, the supply of goods or services for consideration within the territory of a Member State by a taxable person acting as such and the importation of goods are subject to value added tax (‘VAT’).

4Article 250(1) of the VAT Directive provides:

‘Every taxable person shall submit a VAT return setting out all the information needed to calculate the tax that has become chargeable and the deductions to be made including, in so far as is necessary for the establishment of the basis of assessment, the total value of the transactions relating to such tax and deductions and the value of any exempt transactions.’

5Under the first paragraph of Article 273 of the VAT Directive:

‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.’

Italian law

6Royal Decree No 267 laying down provisions governing bankruptcy, arrangement with creditors, judicial administration and compulsory administrative liquidation (Regio Decreto n. 267, recante ‘Disciplina del fallimento, del concordato preventivo, dell’amministrazione controllata e della liquidazione coatta amministrativa’) of 16 March 1942 (GURI No 81 of 6 April 1942), in the version applicable to the facts at issue in the main proceedings (‘the Law on bankruptcy’), governs, in Article 160 et seq., the procedure for an arrangement with creditors.

7By that procedure, which seeks to avoid a declaration of bankruptcy, a trader in critical difficulties or a state of insolvency proposes to its creditors to make its assets available in order to pay back in full the preferential creditors and partially pay back unsecured creditors. The arrangement may however provide for a partial repayment of certain categories of preferential creditors if an independent expert states that those creditors would not receive better treatment if the trader went bankrupt.

8The procedure for the arrangement with creditors, in which the Public Prosecutor participates, starts with the trader’s application before the competent court. That court rules, first of all, on the admissibility of the application, after having determined that the legal conditions for the arrangement are satisfied. Next, the creditors to whom the debtor does not offer full repayment are called upon to vote on the proposal, which must be approved by the creditors admitted to vote who represent the majority of the total amount of their claims. Finally, if that majority is reached, the court validates the arrangement after ruling on any opposition by dissenting creditors to the arrangement and determines again that the legal conditions are satisfied. The arrangement accordingly validated is binding on all the creditors.

9Moreover, Article 182ter of the Law on bankruptcy, entitled ‘Tax settlement’, provides that, by the plan referred to in Article 160 of that law, the debtor may propose the payment, partial and/or delayed, of taxes and ancillary claims of the tax authorities, as well as contributions and ancillary claims made by the compulsory social security institutions, as regards the part of the debt which is unsecured, even if they are not entered in the register, with the exception of taxes constituting the European Union’s own resources. As regards, however, VAT and tax retained but unpaid, the proposal made by the debtor may solely provide for deferred payment.

The dispute in the main proceedings and the question referred

10On 22 May 2014, Degano Transport applied to the referring court in order to be admitted to a procedure for an arrangement with creditors. Indicating that it was in financial crisis, it seeks to liquidate its assets in order to pay certain preferential creditors in full and to pay a percentage of its debts to unsecured creditors and some lower-ranking preferential creditors which, in its view, could not, in any event, recover the entirety of their claims if a bankruptcy procedure were initiated. Included in those latter claims is a VAT debt which Degano Trasporti proposes to pay in part, without linking that proposal to the conclusion of a tax settlement.

11The referring court, having to rule on the admissibility of Degano Transporti’s application, states, in particular, that Article 182ter of the Law on bankruptcy prohibits agreeing, in the context of a tax settlement, on partial payment of State claims to VAT, considered to be privileged claims of the 19 th rank, and only allows for staggered payment of such claims.

12It states that, according to the case-law of the Corte Suprema di Cassazione (Supreme Court of Cassation, Italy), that prohibition, although set out in Article 182ter of the Law on bankruptcy which governs tax settlements, applies in all cases and cannot be derogated from, even in the context of a proposal for an arrangement with creditors. That interpretation of national law is required, according to the Corte Suprema di Cassazione, in the light of EU law, in particular Article 4(3) TEU and the VAT Directive, as interpreted in the judgments in Commission v Italy ( C‑132/06 , EU:C:2008:412 ), Commission v Italy ( C‑174/07 , EU:C:2008:704 ) and Belvedere Costruzioni ( C‑500/10 , EU:C:2012:186 ).

13The referring court questions, however, whether the obligation on Member States to take all legislative and administrative measures appropriate for the full recovery of VAT, laid down by EU law, in fact prevents the use of collective proceedings other than bankruptcy, under which the insolvent trader liquidates all of its assets to satisfy its creditors and envisages settling its VAT debt in an amount which is no less than what that trader would pay in the event of bankruptcy.

14In those circumstances, the Tribunale di Udine (District Court, Udine) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘On a proper construction, do the principles and rules contained in Article 4(3) TEU and the VAT Directive, as already interpreted in the judgments of the Court of Justice in Commission v Italy ( C‑132/06 , EU:C:2008:412 ), Commission v Italy ( C‑174/07 , EU:C:2008:704 ) and Belvedere Costruzioni ( C‑500/10 , EU:C:2012:186 ), also preclude a national rule (and, therefore, in respect of the case in the main proceedings, an interpretation of Articles 162 and 182ter of the Law on bankruptcy) under which a proposal for an arrangement with creditors with the liquidation of the debtor’s assets, which provides for only partial payment of the State’s claim in respect of VAT, is permissible where there is no tax settlement and where, in respect of that claim, a larger payment in the event of bankruptcy is not foreseeable on the basis of an assessment by an independent expert and following the formal review of the court?’

The question referred for a preliminary ruling

15As the referring court states that it is making the reference for a preliminary ruling at the stage of examining the admissibility of the application before it, whereas the strictly contentious stage of the arrangement procedure begins only after the approval of such an arrangement with creditors, when the minority creditors may raise an objection, it is necessary, first, to note that those elements do not preclude the Court’s jurisdiction to hear the request for a preliminary ruling.

17Accordingly, the Court has jurisdiction to hear the present request for a preliminary ruling, although it has been made by the referring court at the non-contentious stage of examining the admissibility of the application before it, which seeks to open a procedure for an arrangement with creditors, which, as is apparent from the national procedural rules set out in paragraph 8 of the present judgment, is intended, if it is admissible, to result in a judicial decision, adopted in the presence of the public prosecutor, after the court has ruled on any oppositions brought by the minority creditors.

18By its question, the referring court asks, in essence, whether Article 4(3) TEU and Articles 2, 250(1) and 273 of the VAT Directive preclude national legislation, such as that at issue in the main proceedings, interpreted as meaning that an insolvent trader may apply to a court to open a procedure for an arrangement with creditors for the purpose of settling its debts by liquidating its assets, in which that trader offers only partial payment of a VAT debt and establishes by an independent expert’s report that that debt would not be repaid more fully in the event of that trader’s bankruptcy.

Costs

30Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

Article 4(3) TEU and Articles 2, 250(1) and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax do not preclude national legislation, such as that at issue in the main proceedings, interpreted as meaning that an insolvent trader may apply to a court to open a procedure for an arrangement with creditors for the purpose of settling its debts by liquidating its assets, in which that trader offers only partial payment of a value added tax debt and establishes by an independent expert’s report that that debt would not be repaid more fully in the event of that trader’s bankruptcy.

[Signatures]

( *1 ) Language of the case: Italian.