Bulgaria - Preliminary ruling requested from ECJ
Preliminary ruling requested from ECJ on time when a good must be purchased or a service received to claim a deduction of input VAT.
On 7 March 2011, the Administrative Court of Varna (Administrativen sad Varna) requested a preliminary ruling from the Court of Justice of the European Union in Eon Asset Management OOD v Direktor na Direktsia "Obzhalvane i upravlenie na izpalnenieto (Case C-118/11).
The referring Court wishes to know:
(1) How must the requirement "are used" established in Art. 168 of the EU VAT Directive be interpreted and, in the framework of assessing the initial establishment of the right of deduction, when must that requirement be satisfied: in the tax period itself in which the goods were purchased or the services received or does it suffice that the requirement is satisfied in a subsequent tax period?
(2) In the light of Arts 168 and 176 of the EU VAT Directive, is a legal rule permissible, such as that established in the domestic provision of Art. 70(1)(2) of the Law on VAT, which allows goods and services "intended for gratuitous transactions or for activities other than the economic activity of the taxable person" to be excluded from the outset from the system of input tax deduction?
(3) If Question 2 is answered in the affirmative: Must Art. 176 of the EU VAT Directive be interpreted as meaning that a Member State which sought to take advantage of the option to exclude certain goods and services from the right of deduction and which defined the category of expenditure as follows: the goods and services intended for gratuitous transactions or for activities other than the economic activity of the taxable person except in the cases mentioned in Article 70(3) of the Law on VAT, satisfied the requirement to adequately define the category of goods and services, that is, to define these by reference to their nature?
(4) Depending on the answer given to Question 3: In the light of Arts. 168 and 173 of the EU VAT Directive, how must the purpose (the use or future use) of the goods or services acquired by the taxable person be assessed: as a prerequisite for the initial establishment of the right of deduction or as grounds for the adjustment of the amount of input tax deducted?
(5) If the purpose (use) must be assessed as grounds for an adjustment to the amount of input tax deducted, how must Art. 173 of the EU VAT Directive be interpreted: does it provide for adjustments to be made also in cases in which goods and services are used initially for an activity which is not taxed or following their acquisition not used at all but are at the disposal of the undertaking and in a (tax) period following their acquisition are included in the taxable activity of the taxable person?
(6) If Art. 173 of the EU VAT Directive must be interpreted as meaning that the adjustment envisaged also applies to cases in which, following their acquisition, goods and services are used initially for an activity which is not taxed or not used at all but subsequently are included in the taxable activity of the taxable person, in the light of the restriction established by Art. 70(1)(2) of the Law on VAT and the fact that, pursuant to Art. 79(1) and (2) of the Law on VAT, adjustments may be made only in cases in which goods whose initial use satisfies the requirement for deduction of input tax are subsequently included in a use which does not satisfy those requirements, must it be presumed that the Member State has satisfied its obligation, in relation to all taxable persons, to structure the right of deduction as soundly and fairly as possible?
(7) Depending on the answers given to the previous questions: Must it be presumed, having regard to the rules established in the Bulgarian Law on VAT governing restrictions on the right of deduction and adjustments to the amount of input tax deducted, in circumstances such as those of the main proceedings, and in the light of Art. 168 of the EU VAT Directive that, in relation to goods supplied and services carried out by another taxable person, a taxable person registered pursuant to the Bulgarian Law on VAT may deduct the input tax in the (tax) period in which these were supplied to him or carried out on his behalf and in which the VAT became chargeable?
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