VATcodexEU VAT case law · Court of Justice and General Court

Article 20 Sixth Directive 77/388/EEC

Adjustments of deductions

Title XI · Deductions

Open in the compendium50 cases ↓

Repealed. The Sixth Directive 77/388/EEC was repealed with effect from 1 January 2007 and replaced by Directive 2006/112/EC. Most case law before that date cites it.

Text of Article 20

1.The initial deduction shall be adjusted according to the procedures laid down by the Member States, in particular:

(a)where that deduction was higher or lower than that to which the taxable person was entitled;

(b)where after the return is made some change occurs in the factors used to determine the amount to be deducted, in particular where purchases are cancelled or price reductions are obtained; however, adjustment shall not be made in cases of transactions remaining totally or partially unpaid and of destruction, loss or theft of property duly proved or confirmed, nor in the case of applications for the purpose of making gifts of small value and giving samples specified in Article 5 (6). However, Member States may require adjustment in cases of transactions remaining totally or partially unpaid and of theft.

2.In the case of capital goods, adjustment shall be spread over five years including that in which the goods were acquired or manufactured. The annual adjustment shall be made only in respect of one-fifth of the tax imposed on the goods. The adjustment shall be made on the basis of the variations in the deduction entitlement in subsequent years in relation to that for the year in which the goods were acquired or manufactured.

By way of derogation from the preceding subparagraph, Member States may base the adjustment on a period of five full years starting from the time at which the goods are first used.

In the case of immovable property acquired as capital goods, the adjustment period may be extended up to 20 years.

3.In the case of supply during the period of adjustment capital goods shall be regarded as if they had still been applied for business use by the taxable person until expiry of the period of adjustment. Such business activities are presumed to be fully taxed in cases where the delivery of the said goods is taxed; they are presumed to be fully exempt where the delivery is exempt. The adjustment shall be made only once for the whole period of adjustment still to be covered.

However, in the latter case, Member States may waive the requirement for adjustment in so far as the purchaser is a taxable person using the capital goods in question solely for transactions in respect of which value added tax is deductible.

4.For the purposes of applying the provisions of paragraphs 2 and 3, Member States may:

—define the concept of capital goods,

—indicate the amount of the tax which is to be taken into consideration for adjustment,

—adopt any suitable measures with a view to ensuring that adjustment does not involve any unjustified advantage,

—permit administrative simplifications.

5.If in any Member State the practical effect of applying paragraphs 2 and 3 would be insignificant, that Member State may subject to the consultation provided for in Article 29 forego application of these paragraphs having regard to the need to avoid distortion of competition, the overall tax effect in the Member State concerned and the need for due economy of administration.

6.Where the taxable person transfers from being taxed in the normal way to a special scheme orvice versa, Member States may take all necessary measures to ensure that the taxable person neither benefits nor is prejudiced unjustifiably.

Consolidated version on EUR-Lex (CELEX 01977L0388-20060101). © European Union. Only the Official Journal is authentic.

Case law on Article 20: 50 cases

Judgments, orders and Advocate General opinions of the Court of Justice and the General Court that cite Article 20 of Sixth Directive 77/388/EEC, most recent first.

  1. C-243/23 Drebers Judgment · 12 September 2024 · Belgium · cites Article 20(2), (4)
  2. C-127/22 Balgarska telekomunikatsionna kompania Judgment · 4 May 2023 · Bulgaria · cites Article 20(1)(b)
  3. C-250/22 Fallimento Villa di Campo Order · 21 December 2022 · Italy
  4. C-42/19 Sonaecom Judgment · 12 November 2020 · Portugal · cites Article 20(2), (6)
  5. C-573/18 C and C (VAT and agricultural subsidies) Judgment · 9 October 2019 · Germany · cites Article 20(1)
  6. C-140/17 Gmina Ryjewo Opinion · 19 April 2018 · Poland · cites Article 20(2)
  7. C-532/16 SEB bankas Opinion · 20 December 2017 · Lithuania
  8. C-246/16 Di Maura Judgment · 23 November 2017 · Italy · cites Article 20(1)(b)
  9. C-38/16 Compass Contract Services Opinion · 2 March 2017 · United Kingdom
  10. C-332/14 Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft Judgment · 9 June 2016 · Germany · cites Article 20(1), (1)(a), (1)(b), (2)
  11. C-128/14 Het Oudeland Beheer Opinion · 15 October 2015 · Netherlands · cites Article 20(2)
  12. C-622/11 Pactor Vastgoed Judgment · 10 October 2013 · Netherlands · cites Article 20(1), (1)(a), (4)
  13. C-219/12 Finanzamt Freistadt Rohrbach Urfahr Opinion · 7 March 2013 · Austria · cites Article 20(2)
  14. C-388/11 Le Crédit Lyonnais Opinion · 28 February 2013 · France
  15. C-299/11 Gemeente Vlaardingen Opinion · 11 September 2012 · Netherlands · cites Article 20(2)
  16. C-594/10 van Laarhoven Judgment · 16 February 2012 · Netherlands · cites Article 20(1), (2), (4)
  17. C-392/09 Uszodaépítő Judgment · 30 September 2010 · Hungary
  18. C-460/07 Puffer Judgment · 23 April 2009 · Austria · cites Article 20(1), (2), (3), (4), (6)
  19. C-515/07 Vereniging Noordelijke Land- en Tuinbouw Organisatie Opinion · 22 December 2008 · Netherlands · cites Article 20(2), (3), (4)
  20. C-98/07 Nordania Finans and BG Factoring Judgment · 6 March 2008 · Denmark · cites Article 20(2), (3), (4), (5)
  21. C-35/05 Reemtsma Cigarettenfabriken Judgment · 15 March 2007 · Italy · cites Article 20(1)(a)
  22. C-72/05 Wollny Judgment · 14 September 2006 · Germany · cites Article 20(2), (3)
  23. C-184/04 Uudenkaupungin kaupunki Judgment · 30 March 2006 · Finland · cites Article 20(2), (4), (5)
  24. C-255/02 Halifax and Others Judgment · 21 February 2006 · United Kingdom
  25. C-63/04 Centralan Property Judgment · 15 December 2005 · United Kingdom · cites Article 20(2), (3)
  26. C-378/02 Waterschap Zeeuws Vlaanderen Judgment · 2 June 2005 · Netherlands · cites Article 20(1), (2)
  27. C-376/02 'Goed Wonen' Judgment · 26 April 2005 · Netherlands · cites Article 20(1), (1)(a), (1)(b), (2)
  28. C-243/03 Commission v France Opinion · 10 March 2005 · France
  29. C-172/03 Heiser Judgment · 3 March 2005 · Austria · cites Article 20(2)
  30. C-434/03 Charles and Charles-Tijmens Opinion · 20 January 2005 · Netherlands
  31. C-487/01 Gemeente Leusden and Holin Groep Judgment · 29 April 2004 · Netherlands · cites Article 20(1), (1)(b), (2), (6)
  32. C-269/03 Vermietungsgesellschaft Objekt Kirchberg Opinion · 25 March 2004 · Luxembourg
  33. C-395/02 Transport Service Order · 3 March 2004 · Belgium
  34. C-137/02 Faxworld Opinion · 23 October 2003 · Germany
  35. C-269/00 Seeling Judgment · 8 May 2003 · Germany · cites Article 20(2), (3)
  36. C-427/98 Commission v Germany Judgment · 15 October 2002 · Germany · cites Article 20(1), (1)(b)
  37. C-497/01 Zita Modes Opinion · 26 September 2002 · Luxembourg · cites Article 20(1)(b), (2)
  38. C-398/99 Yorkshire Co-operatives Opinion · 20 September 2001 · United Kingdom · cites Article 20(1)(b)
  39. C-322/99 Fischer and Brandenstein Judgment · 17 May 2001 · Germany · cites Article 20(1)(b)
  40. C-150/99 Stockholm Lindöpark Opinion · 26 September 2000 · Sweden · cites Article 20(1)(a)
  41. C-454/98 Schmeink & Cofreth and Strobel Judgment · 19 September 2000 · Germany · cites Article 20(1)(a)
  42. C-400/98 Breitsohl Judgment · 8 June 2000 · Germany · cites Article 20(3), (4)
  43. C-396/98 Schloßstraße Judgment · 8 June 2000 · Germany · cites Article 20(3)
  44. C-37/95 Ghent Coal Terminal Opinion · 11 July 1996 · Belgium · cites Article 20(1), (2), (3)
  45. C-110/94 INZO Opinion · 23 November 1995 · Belgium
  46. C-291/92 Armbrecht Judgment · 4 October 1995 · Germany · cites Article 20(2), (3)
  47. C-97/90 Lennartz Judgment · 11 July 1991 · Germany · cites Article 20(1), (1)(a), (2), (3), (4), (5)
  48. C-50/87 Commission v France Judgment · 21 September 1988 · France · cites Article 20(1)(a)
  49. C-47/84 Staatssecretaris van Financiën v Schul Judgment · 21 May 1985 · Netherlands · cites Article 20(2)
  50. C-8/81 Becker Judgment · 19 January 1982 · Germany · cites Article 20(2)