VATcodexEU VAT case law · Court of Justice and General Court

Article 173 Directive 2006/112/EC

Proportional deduction

Title X · Deductions › Chapter 2 · Proportional deduction

Open in the compendium65 cases ↓

Before 1 January 2007: Article 17 of Sixth Directive 77/388/EEC, according to the correlation table in Annex XII. The wording is not identical.

Text of Article 173

1.In the case of goods or services used by a taxable person both for transactions in respect of which VAT is deductible pursuant to Articles 168, 169 and 170, and for transactions in respect of which VAT is not deductible, only such proportion of the VAT as is attributable to the former transactions shall be deductible.

The deductible proportion shall be determined, in accordance with Articles 174 and 175, for all the transactions carried out by the taxable person.

2.Member States may take the following measures:

(a)authorise the taxable person to determine a proportion for each sector of his business, provided that separate accounts are kept for each sector;

(b)require the taxable person to determine a proportion for each sector of his business and to keep separate accounts for each sector;

(c)authorise or require the taxable person to make the deduction on the basis of the use made of all or part of the goods and services;

(d)authorise or require the taxable person to make the deduction in accordance with the rule laid down in the first subparagraph of paragraph 1, in respect of all goods and services used for all transactions referred to therein;

(e)provide that, where the VAT which is not deductible by the taxable person is insignificant, it is to be treated as nil.

Consolidated version on EUR-Lex (CELEX 02006L0112-20250414). © European Union. Only the Official Journal is authentic.

Case law on Article 173: 65 cases

Judgments, orders and Advocate General opinions of the Court of Justice and the General Court that cite Article 173 of Directive 2006/112/EC, most recent first.

  1. C-513/24 Oblastní nemocnice Kolín Judgment · 19 March 2026 · Czechia · cites Article 173(1), (2)
  2. C-794/23 Finanzamt Österreich (VAT invoiced in error to final consumers II) Opinion · 19 December 2024 · Austria · cites Article 173(2)(e)
  3. C-674/22 Gemeente Dinkelland Judgment · 22 February 2024 · Netherlands · cites Article 173(1), (2)(c)
  4. C-21/20 Balgarska natsionalna televizia Judgment · 16 September 2021 · Bulgaria · cites Article 173(1)
  5. C-695/19 Rádio Popular Judgment · 8 July 2021 · Portugal
  6. C-42/19 Sonaecom Judgment · 12 November 2020 · Portugal · cites Article 17(5) of the Sixth Directive
  7. C-661/18 CTT - Correios de Portugal Judgment · 30 April 2020 · Portugal · cites Article 173(1), (2)(c)
  8. C-566/17 Związek Gmin Zagłębia Miedziowego Judgment · 8 May 2019 · Poland · cites Article 173(1)
  9. C-165/17 Morgan Stanley & Co International Judgment · 24 January 2019 · France · cites Article 173(1), (2)
  10. C-153/17 Volkswagen Financial Services (UK) Judgment · 18 October 2018 · United Kingdom · cites Article 173(1), (2), (2)(c)
  11. C-140/17 Gmina Ryjewo Judgment · 25 July 2018 · Poland
  12. C-28/16 MVM Order · 12 January 2017 · Hungary · cites Article 173(1)
  13. C-378/15 Mercedes Benz Italia Judgment · 14 December 2016 · Italy · cites Article 173(2)
  14. C-432/15 Baštová Judgment · 10 November 2016 · Czechia · cites Article 173(1)
  15. C-186/15 Kreissparkasse Wiedenbrück Judgment · 16 June 2016 · Germany · cites Article 173(1), (2)
  16. C-332/14 Wolfgang und Dr. Wilfried Rey Grundstücksgemeinschaft Judgment · 9 June 2016 · Germany · cites Article 17(5) of the Sixth Directive
  17. C-11/15 Český rozhlas Opinion · 17 March 2016 · Czechia · cites Article 17(5) of the Sixth Directive
  18. C-128/14 Het Oudeland Beheer Opinion · 15 October 2015 · Netherlands · cites Article 17(5) of the Sixth Directive
  19. C-108/14 Larentia + Minerva and Marenave Schiffahrt Judgment · 16 July 2015 · Germany · cites Article 17(5) of the Sixth Directive
  20. C-92/13 Gemeente ‘s-Hertogenbosch Judgment · 10 September 2014 · Netherlands · cites Article 17(5) of the Sixth Directive
  21. C-183/13 Banco Mais Judgment · 10 July 2014 · Portugal · cites Article 17(5) of the Sixth Directive
  22. C-388/11 Le Crédit Lyonnais Judgment · 12 September 2013 · France · cites Article 17(5) of the Sixth Directive
  23. C-91/12 PFC Clinic Judgment · 21 March 2013 · Sweden
  24. C-511/10 BLC Baumarkt Judgment · 8 November 2012 · Germany · cites Article 173(2)
  25. C-496/11 Portugal Telecom Judgment · 6 September 2012 · Portugal · cites Article 17(5) of the Sixth Directive
  26. C-377/11 International Bingo Technology Judgment · 19 July 2012 · Spain · cites Article 17(5) of the Sixth Directive
  27. C-621/10 Balkan and Sea Properties and Provadinvest Judgment · 26 April 2012 · Bulgaria
  28. C-118/11 Eon Aset Menidjmunt Judgment · 16 February 2012 · Bulgaria · cites Article 173(1)
  29. C-25/11 Varzim Sol Judgment · 16 February 2012 · Portugal · cites Article 17(5) of the Sixth Directive
  30. C-103/09 Weald Leasing Opinion · 26 October 2010 · United Kingdom · cites Article 17(5) of the Sixth Directive
  31. C-174/08 NCC Construction Danmark Judgment · 29 October 2009 · Denmark · cites Article 17(5) of the Sixth Directive
  32. C-460/07 Puffer Judgment · 23 April 2009 · Austria · cites Article 17(5) of the Sixth Directive
  33. C-29/08 SKF Opinion · 12 February 2009 · Sweden · cites Article 17(5) of the Sixth Directive
  34. C-515/07 Vereniging Noordelijke Land- en Tuinbouw Organisatie Opinion · 22 December 2008 · Netherlands · cites Article 17(5) of the Sixth Directive
  35. C-488/07 Royal Bank of Scotland Judgment · 18 December 2008 · United Kingdom · cites Article 17(5) of the Sixth Directive
  36. C-371/07 Danfoss and AstraZeneca Opinion · 23 October 2008 · Denmark · cites Article 17(5) of the Sixth Directive
  37. C-437/06 Securenta Judgment · 13 March 2008 · Germany · cites Article 17(5) of the Sixth Directive
  38. C-98/07 Nordania Finans and BG Factoring Judgment · 6 March 2008 · Denmark · cites Article 17(5) of the Sixth Directive
  39. C-35/05 Reemtsma Cigarettenfabriken Opinion · 8 June 2006 · Italy · cites Article 17(5) of the Sixth Directive
  40. C-255/02 Halifax and Others Judgment · 21 February 2006 · United Kingdom · cites Article 17(5) of the Sixth Directive
  41. C-223/03 University of Huddersfield Judgment · 21 February 2006 · United Kingdom · cites Article 17(5) of the Sixth Directive
  42. C-63/04 Centralan Property Judgment · 15 December 2005 · United Kingdom · cites Article 17(5) of the Sixth Directive
  43. C-204/03 Commission v Spain Judgment · 6 October 2005 · Spain · cites Article 17(5) of the Sixth Directive
  44. C-243/03 Commission v France Judgment · 6 October 2005 · France · cites Article 17(5) of the Sixth Directive
  45. C-394/04 Ygeia Opinion · 15 September 2005 · Greece · cites Article 17(5) of the Sixth Directive
  46. C-465/03 Kretztechnik Judgment · 26 May 2005 · Austria · cites Article 17(5) of the Sixth Directive
  47. C-536/03 António Jorge Judgment · 26 May 2005 · Portugal · cites Article 17(5) of the Sixth Directive
  48. C-498/03 Kingscrest Associates and Montecello Opinion · 22 February 2005 · United Kingdom · cites Article 17(5) of the Sixth Directive
  49. C-434/03 Charles and Charles-Tijmens Opinion · 20 January 2005 · Netherlands · cites Article 17(5) of the Sixth Directive
  50. C-77/01 EDM Judgment · 29 April 2004 · Portugal · cites Article 17(5) of the Sixth Directive
  51. C-212/01 Unterpertinger Judgment · 20 November 2003 · Austria · cites Article 17(5) of the Sixth Directive
  52. C-307/01 D’Ambrumenil and Dispute Resolution Services Judgment · 20 November 2003 · United Kingdom · cites Article 17(5) of the Sixth Directive
  53. C-442/01 KapHag Judgment · 26 June 2003 · Germany · cites Article 17(5) of the Sixth Directive
  54. C-16/00 Cibo Participations Judgment · 27 September 2001 · France · cites Article 17(5) of the Sixth Directive
  55. C-408/98 Abbey National Judgment · 22 February 2001 · United Kingdom · cites Article 17(5) of the Sixth Directive
  56. C-142/99 Floridienne and Berginvest Judgment · 14 November 2000 · Belgium · cites Article 17(5) of the Sixth Directive
  57. C-136/99 Monte Dei Paschi Di Siena Judgment · 13 July 2000 · France · cites Article 17(5) of the Sixth Directive
  58. C-98/98 Midland Bank Judgment · 8 June 2000 · United Kingdom · cites Article 17(5) of the Sixth Directive
  59. C-305/97 Royscot and Others Judgment · 5 October 1999 · United Kingdom · cites Article 17(5) of the Sixth Directive
  60. C-80/95 Harnas & Helm Opinion · 7 November 1996 · Netherlands · cites Article 17(5) of the Sixth Directive
  61. C-306/94 Régie dauphinoise Opinion · 15 February 1996 · France · cites Article 17(5) of the Sixth Directive
  62. C-4/94 BLP Group Opinion · 26 January 1995 · United Kingdom · cites Article 17(5), 17(5)(c) of the Sixth Directive
  63. C-333/91 Sofitam Opinion · 20 January 1993 · France · cites Article 17(5) of the Sixth Directive
  64. C-97/90 Lennartz Judgment · 11 July 1991 · Germany · cites Article 17(5) of the Sixth Directive
  65. C-5/84 Direct Cosmetics Judgment · 13 February 1985 · United Kingdom · cites Article 17(5) of the Sixth Directive

VAT Committee guidelines on Article 173: 1

Not binding. Positions agreed in the VAT Committee set up under Article 398 of Directive 2006/112/EC and published by the Commission.