C-311/09 Commission v Poland

Judgment · Court of Justice · Poland · 6 May 2010

Flat-rate VAT on foreign coach operators without deduction

What is the case?

Poland applied a special regime to the international carriage of passengers by road performed by transporters domiciled outside its territory. Rather than taxing the actual consideration and allowing deduction of input tax, the rules required those operators to pay VAT on a flat-rate basis, calculated by reference to factors such as the number of passengers carried, irrespective of the price actually received and without the right to deduct the VAT they had borne on their own costs. The Commission brought infringement proceedings.

What is the Court asked?

Whether a national regime taxing non-established transporters on a flat-rate basis in the international carriage of persons, without reference to the consideration actually obtained and without allowing deduction of input VAT, is compatible with Articles 73, 168 and 273 of Directive 2006/112 on the taxable amount, the right of deduction and the obligations that Member States may impose.

The Court’s decision

The Court upheld the action. By applying that flat-rate charge Poland failed to fulfil its obligations under Articles 73, 168 and 273 of the VAT Directive. The taxable amount must be the consideration actually received, and the right to deduct input tax incurred for the purposes of taxed transactions cannot be denied. The additional obligations a Member State may impose under Article 273 do not extend to displacing those two rules. A straightforward but firm statement that simplification cannot be bought at the price of the two structural elements of the system. Relevant to any national scheme that substitutes a lump sum or notional base for the real consideration, particularly where it applies only to non-established operators.

AI-generated and factual. Not an official document: verify against the text below.

Legislation interpreted

Article 73 of Directive 2006/112/EC Supply of goods or services
Article 168 of Directive 2006/112/EC Origin and scope of right of deduction
Article 273 of Directive 2006/112/EC Obligations of taxable persons and certain non-taxable persons

Subject matter

Failure of a Member State to fulfil obligations · Taxation · VAT · International carriage of persons · Flat-rate taxation of transporters domiciled outside the national territory

Topics

Supply of goods or services · Defences · Origin and scope of right of deduction · Obligations of taxable persons · International carriage of persons

Record

Court: Court of Justice
Case number: C-311/09
ECLI: ECLI:EU:C:2010:257
Official texts: Judgment of 6 May 2010 (62009CJ0311)
Cite as: Judgment of 6 May 2010, Commission v Poland, C-311/09, EU:C:2010:257

Judgment of 6 May 2010

Text as published by the Court on EUR-Lex, CELEX 62009CJ0311.

Judgment of the Court (Seventh Chamber) of 6 May 2010 — Commission v Poland

(Case C-311/09)

(Failure of a Member State to fulfil obligations — Taxation — VAT — International carriage of persons — Flat-rate taxation of transporters domiciled outside the national territory)

Legal context and the dispute

1Member States — Obligations — Failure to fulfil obligations — Justification (Art.

226 EC) (see para 18)

2Actions for failure to fulfil obligations — Right of the Commission to bring judicial proceedings — To be exercised at its discretion (Art. 226 EC) (see para 19)

3Actions for failure to fulfil obligations — Examination of the merits by the Court — Situation to be taken into consideration — Situation on expiry of the period laid down in the reasoned opinion (Art. 226 EC) (see para 31)

4Actions for failure to fulfil obligations — Proof of failure — Burden of proof on Commission (Art. 226 EC) (see point 34)

I - 55*

5Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Taxable amount — Deduction of input tax — Obligations of persons liable for payment of the tax (Council Directive 2006/112, Arts 73, 168 and 273) (see para 39, operative part)

Re:

Failure of a Member State to fulfil obligations — Infringement of Articles 73, 168 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — International carriage of persons by road – National rules requiring transporters domiciled abroad to pay VAT under a flat-rate system based only on the number of persons transported to the national territory and which does not allow any right to deduct tax paid at an earlier stage.

Operative part:

The Court:

1. Declares that, by charging value added tax in the manner set out in Chapter 13, Paragraph 35(1), (3), (4) and (5), of the Regulation of the Minister for Finance of 27 April 2004 on the implementation of certain provisions of the Law on the taxation of goods and services, the Republic of Poland has failed to fulfil its obligations under Articles 73, 168 and 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax;

I - 56*

Order of the Court (Seventh Chamber) of 6 May 2010 — Goldman Management v Commission and Bulgaria

(Case C-507/09 P)

(Appeal — Article 119 of the Rules of Procedure of the Court of Justice — Commission’s failure to bring infringement proceedings against the Republic of Bulgaria — Bulgarian Government’s failure to act in a dispute involving internal law — Compensation for the damage supposedly sustained by reason of those failures — Appeal clearly inadmissible)

Appeals — Grounds — Mere repetition of the pleas and arguments put forward before the Court of First Instance — Error of law relied on not identified — Inadmissibility (Art. 256 TFEU; Statute of the Court of Justice, Art. 58(1); Rules of Procedure of the Court of Justice, Art. 112(1)(c)) (see paras 11-13)

Re:

Appeal brought against the judgment of the Court of First Instance (Seventh Chamber) of 16 November 2009 in Case T-354/09 Goldman Management v Commission and Bulgaria, by which that court dismissed the action seeking, first, a declaration that the Commission had unlawfully failed to bring infringement proceedings against Bulgaria and that that Member State had itself unlawfully failed to act in response to

I - 57*