JUDGMENT OF THE COURT (Tenth Chamber)
9 September 2021 (*)
(Reference for a preliminary ruling – Harmonisation of the laws of the Member States relating to turnover taxes – Eighth Directive 79/1072/EEC– Articles 3, 6 and 7 – Arrangements for the refund of value added tax (VAT) – Taxable persons not established in the territory of the country – Refusal to refund VAT paid – Documents supporting entitlement to a refund – Failure to submit supporting documents within the time limits given)
In Case C‑294/20,
REQUEST for a preliminary ruling pursuant to Article 267 TFEU from the Audiencia Nacional (National High Court, Spain) by a decision of 5 March 2020, received at the Court on 1 July 2020, in the proceedings
GE Auto Service Leasing GmbH
v
Tribunal Económico-Administrativo Central,
THE COURT (Tenth Chamber),
composed of M. Ilešič, President of the Chamber, E. Juhász (Rapporteur) and C. Lycourgos, Judges,
Advocate General: E. Tanchev,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
– GE Auto Service Leasing GmbH, by A. Azpeitia Gamazo and A. Albarrán Jiménez, abogados,
– the Spanish Government, by S. Jiménez García and M.J. Ruiz Sánchez, acting as Agents,
– the Czech Government, by M. Smolek, O.Serdula and J. Vláčil, acting as Agents,
– the Estonian Government, by N. Grünberg, acting as Agent,
– the Greek Government, by M. Tassopoulou, S. Trekli and G. Avdikos, acting as Agents,
– the European Commission, by L. Lozano Palacios and J. Jokubauskaitė, acting as Agents,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 The request for a preliminary ruling concerns the interpretation of Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ 1979 L 331, p. 11) (‘the Eighth VAT Directive’).
2 The request was made in proceedings between GE Auto Service Leasing GmbH (‘Auto Service’) and the Tribunal Económico-Administrativo Central (Central Tax Tribunal, Spain) relating to a refusal to refund value added tax (VAT) invoiced by that company.
Legal context
European Union law
Sixth VAT Directive
3 Article 17 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 2006/18/EC of 14 February 2006 (OJ 2006 L 51, p. 12) (‘the Sixth VAT Directive’) provides:
‘1. The right to deduct shall arise at the time when the deductible tax becomes chargeable.
2. In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:
(a) value added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person;
(b) value added tax due or paid in respect of imported goods;
(c) value added tax due under Articles 5(7)(a) and 6(3).
3. Member States shall also grant to every taxable person the right to a deduction or refund of the value added tax referred to in paragraph 2 in so far as the goods and services are used for the purposes of:
(a) transactions relating to the economic activities as referred to in Article 4(2) carried out in another country, which would be eligible for deduction of tax if they had occurred in the territory of the country;
(b) transactions which are exempt under Article 14(1)(i) and under Articles 15and 16(1)(B), (C) and (D), and paragraph 2;
(c) any of the transactions exempted under Article 13B(a) and (d), paragraphs 1 to 5, when the customer is established outside the Community or when these transactions are directly linked with goods intended to be exported to a country outside the Community.
…’
4 Under Article 28f of that directive:
‘…
4. The refund of value added tax referred to in paragraph 3 shall be effected:
– to taxable persons who are not established within the territory of the country but who are established in another Member State in accordance with the detailed implementing rules laid down in [the Eighth VAT Directive].
…’
Eighth VAT Directive
5 Article 2 of the Eighth VAT Directive provides:
‘Each Member State shall refund to any taxable person who is not established in the territory of the country but who is established in another Member State, subject to the conditions laid down below, any value added tax charged in respect of services or movable property supplied to him by other taxable persons in the territory of the country or charged in respect of the importation of goods into the country, in so far as such goods and services are used for the purposes of the transactions referred to in Article 17(3)(a) and (b) of [the Sixth VAT Directive] and of the provision of services referred to in Article 1(b).’
6 Article 3 of that directive states:
‘To qualify for refund, any taxable person as referred to in Article 2 who supplies no goods or services deemed to be supplied in the territory of the country shall:
(a) submit to the competent authority referred to in the first paragraph of Article 9 an application modelled on the specimen contained in Annex A, attaching originals of invoices or import documents. Member States shall make available to applicants an explanatory notice which shall in any event contain the minimum information set out in Annex C;
b) produce evidence, in the form of a certificate issued by the official authority of the State in which he is established, that he is a taxable person for the purposes of value added tax in that State. However, where the competent authority referred to in the first paragraph of Article 9 already has such evidence in its possession, the taxable person shall not be bound to produce new evidence for a period of one year from the date of issue of the first certificate by the official authority of the State in which he is established. Member States shall not issue certificates to any taxable persons who benefit from tax exemption pursuant to Article 24(2) of the [Sixth VAT Directive];
(c) certify by means of a written declaration that he has supplied no goods or services deemed to have been supplied in the territory of the country during the period referred to in the first and second sentences of the first subparagraph of Article 7(1);
(d) undertake to repay any sum collected in error.’
7 Article 4 of that directive reads as follows:
‘To be eligible for the refund, any taxable person as referred to in Article 2 who has supplied in the territory of the country no goods or services deemed to have been supplied in the country other than the services referred to in Article 1(a) and (b) shall:
(a) satisfy the requirements laid down in Article 3(a), (b) and (d);
…’
8 Article 6 of the same directive provides:
‘Member States may not impose on the taxable persons referred to in Article 2 any obligation, in addition to those referred to in Articles 3 and 4, other than the obligation to provide, in specific cases, the information necessary to determine whether the application for refund is justified.’
9 Under Article 7 of the Eighth VAT Directive:
‘1. The application for refund provided for in Articles 3 and 4 shall relate to invoiced purchases of goods or services or to imports made during a period of not less than three months or not more than one calendar year. Applications may, however, relate to a period of less than three months where the period represents the remainder of a calendar year. Such applications may also relate to invoices or import documents not covered by previous applications and concerning transactions completed during the calendar year in question. Applications shall be submitted to the competent authority referred to in the first paragraph of Article 9 within six months of the end of the calendar year in which the tax became chargeable.
…
3. The competent authority referred to in the first paragraph of Article 9 shall stamp each invoice and/or import document to prevent their use for further application and shall return them within one month.
4. Decisions concerning applications for refund shall be announced within six months of the date when the applications, accompanied by all the necessary documents required under this Directive for examination of the application, are submitted to the competent authority referred to in paragraph 3. Refunds shall be made before the end of the abovementioned period, at the applicant’s request, in either the Member State of refund or the State in which he is established. In the latter case, the bank charges for the transfer shall be payable by the applicant.
The grounds for refusal of an application shall be stated. Appeals against such refusals may be made to the competent authorities in the Member State concerned, subject to the same conditions as to form and time limits as those governing claims for refunds made by taxable persons established in the same State.
…’
Directive 2006/112/EC
10 Under Articles 411 and 413 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) Directive 2006/112 repealed the Sixth VAT Directive and would enter into force on 1 January 2007.
Directive 2008/9/EC
11 It can be seen from Article 28(1) and (2) of Council Directive 2008/9/EC of 12 February 2008 laying down detailed rules for the refund of value added tax, provided for in Directive 2006/112, to taxable persons not established in the Member State of refund but established in another Member State (OJ 2008 L 44, p. 23), that Directive 2008/9 applies to refund applications submitted after 31 December 2009 and repealed the Eighth VAT Directive with effect from 1 January 2010.
Spanish law
12 Article 119 of Ley 37/1992 del Impuesto sobre el Valor Añadido (Law No 37/1992 on value added tax) of 28 December 1992 (BOE No 312 of 29 December 1992, p. 44247), entitled ‘Special regime applicable to refunds to certain traders or professional practitioners not established in the territory of application of VAT’, states:
‘1. Traders or professional practitioners not established in the territory of application of VAT in respect of whom the requirements set out in the following paragraph are satisfied may exercise the right to a refund of value added tax paid by them or passed on to them in that territory as applicable, in accordance with the provisions of this article.
…
2. The requirements for exercising the right to a refund under this article are:
(1) The traders or professional practitioners intending to rely on that right are established in the Community, the Canary Islands, Ceuta or Melilla or other third countries.
…
(2) During the period to which the application relates, [the traders or professional practitioners] have not supplied any goods or services subject to VAT in the territory of application of VAT other than those listed below:
(a) supplies of goods and services where the taxable person for VAT purposes is the recipient, in accordance with Article 84(1), points 2, 3 and 4 of this law;
(b) transport services and services ancillary thereto, exempt from VAT under Articles 21, 23, 24 and 64 of this law.
…
8. Refund applications may only relate to the immediately preceding annual or quarterly periods.
Refund applications relating to a shorter period are nevertheless permissible provided the period concerned ends on 31 December of the corresponding year.
9. The tax authority may require applicants to provide the information and supporting documents necessary to assess whether the refund applications submitted are justified and, in particular, in order correctly to determine the amount of the refund in accordance with paragraphs (4) and (5) of this article.
…’
13 Article 112 of Ley 30/1992 de Régimen Jurídico de las Administraciones Públicas y del Procedimiento Administrativo Común (Law No 30/1992 on the legal provisions governing public authorities and ordinary administrative procedure) of 26 November 1992, now contained in Article 118 of Ley 39/2015 del Procedimiento Administrativo Común de las Administraciones Públicas (Law No 39/2015 on the ordinary administrative procedure governing public authorities) of 1 October 2015 (BOE No 236 of 2 October 2015, p. 89343), provides that ‘in determining the appeal, account may not be taken of facts, documents or arguments of the appellant which the appellant could have submitted but did not submit with his or her observations’ and clarifies that ‘no application may be made to hear evidence if the failure to hear evidence during the proceedings leading to the contested decision was attributable to the person concerned’.
The dispute in the main proceedings and the questions referred for a preliminary ruling
14 Auto Service is a company established in Germany which, on 30 June 2006 and 29 June 2007, submitted applications to the Oficina nacional de gestión tributaria – IVA de no establecidos (National Tax Administration Office – VAT for non-established taxable persons, Spain) (‘the Spanish tax authority’) to be refunded VAT totalling EUR 407 396.469 paid by traders or professional practitioners not established in the territory of application of the tax in the 2005 and 2006 financial years.
15 On 19 March 2008, the Spanish tax authority sent Auto Service two formal requests to produce the originals of the invoices on the basis of which Auto Service was applying for a refund and to provide it with clarifications concerning the transactions carried out in Spain and the use of the goods or services acquired to which the refund application related.
16 On 12 December 2008, Auto Service informed the Spanish tax authority that it was proceeding with its refund application but was experiencing difficulties in producing the documents requested.
17 By decisions of 18 February 2009, which were notified to Auto Service on 21 April 2009, the Spanish tax authority refused the refund applications submitted by that company which, on 20 February 2009, informed the authority that it was a German undertaking engaged in supplying cars to Spanish undertakings through leasing contracts and occasional sales of used vehicles in Spain, and submitted a number of supporting invoices together with those explanations.
18 Auto Service filed a request for review of the decisions rejecting its refund applications and, acknowledging that it had responded late to the requests for information but noting that it had nevertheless in any event responded before those decisions were notified, lodged with its request a number of invoices issued for the leasing services supplied, although not all the invoices on the basis of which the VAT refund was being sought.
19 Before deciding on the review proceedings, the Spanish tax authority issued Auto Service with a fresh request for information on 13 July 2009. That request invited Auto Service to give details of the use of the goods and/or services acquired in respect of which a VAT refund was being sought and to demonstrate that they were intended for transactions in respect of which VAT is refundable. Auto Service was accordingly invited to produce the contracts entered into with customers and the invoices issued, a certificate issued by the tax authorities of the country where it had its registered office or principal establishment confirming that it was subject to VAT, and details of the rate of tax levied on its activity and the percentage of any proportional deduction.
20 Auto Service did not respond to that fresh formal request for information.
21 Since it did not have all the documents requested, on 1 February 2010 the Spanish tax authority issued a decision dismissing the review proceedings and confirming the refusal to grant the refund on the grounds that Auto Service had failed to prove that its applications were justified.
22 In that respect, the Spanish tax authority informed the applicant that the purpose of the documents whose production it was requesting was to establish that the transactions actually took place in the territory of application of the tax and that the goods and services were used for transactions in respect of which tax is deductible. The authority further stated that the documents themselves were intended to enable it to verify whether the leasing contracts concluded with customers contained an option to purchase goods and the purchase arrangements, to ascertain whether the goods under the contracts were in the territory of application of the tax and whether the undertaking’s customers were entities or persons established in the territory of application of the tax. That information was also requested in order to determine whether Auto Service was a financial leasing company, and the rate of tax in the State of establishment and the deductible percentage.
23 Since it disagreed with that decision, Auto Service brought proceedings before the Tribunal Económico-Administrativo Central (Central Tax Tribunal), and for that purpose produced invoices for the supply of services, leasing contracts, several periodic VAT returns and official certificates issued by the German authorities confirming its status as a taxable person with a right of deduction.
24 The Tribunal Económico-Administrativo Central (Central Tax Tribunal) rejected Auto Service’s claims on the grounds that the relevant evidence should have been submitted to the competent administrative body and could no longer be submitted at the stage of an administrative complaint procedure.
25 On 24 January 2013, Auto Service brought a contentious administrative action before the Audiencia Nacional (National High Court, Spain) against the decision of the Tribunal Económico-Administrativo Central (Central Tax Tribunal) dismissing its complaints. The Audiencia Nacional (National High Court) dismissed that action by a judgment of 22 September 2016.
26 In its grounds for dismissing the action, the Audiencia Nacional (National High Court) emphasised that it is for the party applying for a VAT refund to prove its entitlement to the refund at the administrative procedure stage and its failure to respond to the authority’s requests cannot be rectified at the stage of an administrative review or contentious administrative action.
27 Auto Service brought an appeal on a point of law against that judgment before the Tribunal Supremo (Supreme Court, Spain).
28 In its judgment of 10 September 2018, the Tribunal Supremo (Supreme Court) noted that, despite its quasi-judicial nature the Tribunal Económico-Administrativo Central (Central Tax Tribunal) is an administrative body to which recourse must be had before an action can be brought before the courts.
29 The Tribunal Supremo (Supreme Court) found that, unless there is an abuse of rights, Spanish law requires the contentious administrative courts to take account of evidence that a taxable person failed to provide to the tax authority at the time it was examining that person’s file.
30 The Tribunal Supremo (Supreme Court) then stated that, in relation to VAT, in its case-law the Court of Justice, in reliance on the principles of the neutrality of VAT and proportionality, has given priority to the substantive rules governing the deduction of VAT over formal rules. Accordingly, the Court has upheld a right of deduction or refund wherever it was found that the substantive rules relating to that right were satisfied, even though certain formal requirements were not.
31 Since it was common ground that the requirements for entitlement to a VAT refund, under Article 119 of Directive 2006/112, were satisfied in the case in the main proceedings, the Tribunal Supremo (Supreme Court) set aside the judgment of the Audiencia Nacional (National High Court) and ordered Auto Service’s case to be referred back to the latter court to rule in the light of the evidence in the file before it relating to the VAT refund application submitted by that company.
32 The Audiencia Nacional (National High Court) states that were it to follow the reasoning of the Tribunal Supremo (Supreme Court), it would very probably infringe the provisions of Articles 3 and 7 of the Eighth VAT Directive, because Auto Service had not substantiated its right to a VAT refund within the time limits laid down by Article 7, even though it was given an opportunity to do so by the Spanish tax authority.
33 The Audiencia Nacional (National High Court) emphasises that, although the Court of Justice has already held that infringement of formal obligations cannot, in principle, give rise to loss of the right of deduction, the fact remains that such formal requirements may nevertheless constitute the means by which that right is exercised in practice and they govern its exercise and monitoring thereof and the smooth functioning of the VAT system.
34 According to the referring court it is with that in mind that the Court has seen fit to hold that the possibility of the right to deduct VAT being asserted without any time limit would be contrary to the principle of legal certainty, which requires the tax position of the taxable person, having regard to his or her rights and obligations vis-à-vis the tax authority, not to be open to challenge indefinitely.
35 The referring court states that, since the Spanish tax authority took all the steps necessary to enable the taxable person to produce documents capable of substantiating its right to a VAT refund, but it failed to do so within the time limits given in Article 7(1) of the Eighth VAT Directive, the rights of that taxable person must be found to have become time-barred, as the Court held in paragraph 34 of the judgment of 21 June 2012, Elsacom (C‑294/11, EU:C:2012:382).
36 In that respect, the referring court is of the view that, having regard to the judgment of the Tribunal Supremo (Supreme Court), according to which the time at which the taxable person produces the evidence on which its application is based is irrelevant in relation to VAT refunds, it is necessary to determine whether there was undue delay in producing that evidence, which could constitute an abusive practice.
37 According to that court, the length of time it took Auto Service to produce evidence of its right to a refund in the case in the main proceedings may be regarded as indicative of bad faith on its part, inasmuch as it knowingly and deliberately concealed from the authority the information necessary to obtain the VAT refund, with no apparent reason and despite the many opportunities it had to do what was required of it.
38 In those circumstances, the Audiencia Nacional (National High Court) stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:
‘(1) Must it be accepted as lawful for a taxable person, following repeated requests from the tax authority that it establish compliance with the conditions for entitlement to a refund, to fail to comply with those requests without any reasonable justification and, after it has been refused a refund, for that person to defer the submission of documents until the review procedure or legal action?
(2) Can a situation where a taxable person does not provide the tax authority with the necessary information on which it bases its right when it has been permitted and formally required to do so, and that taxable person fails to provide that information without reasonable justification and the information is instead submitted voluntarily at a later date to a review body or a court, be regarded as an abuse of rights?
(3) Does a non-established taxable person, either on the ground that it failed to submit the relevant information for establishing its right to a refund on time and without reasonable justification, or on the ground that it engaged in abusive practices, lose its right to a refund once the period stipulated or granted for that purpose has elapsed and the tax authority has issued a decision refusing the refund?’
The questions referred
39 As a preliminary point, it must be observed that Auto Service claims that the request for a preliminary ruling should be declared inadmissible since, first, the questions put by the referring court have already been decided by the Tribunal Supremo (Supreme Court) and are therefore res judicata and, secondly, the question relating to abuse of rights is hypothetical because that question did not arise until it was put before the Court by the referring court.
40 In that regard it must be observed that, according to the Court’s consistent case-law, national courts have the widest discretion in referring questions to the Court involving interpretation of relevant provisions of EU law. It is for the national court hearing the proceedings only, which alone is familiar with its national law and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions put by national courts concern the interpretation or the validity of a provision of EU law, the Court is, in principle, bound to give a ruling. It follows that questions referred by national courts enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgments of 5 April 2016, PFE, C‑689/13, EU:C:2016:199, paragraph 32 and the case-law cited, and of 16 July 2020, Antonio Capaldo, C‑496/19, EU:C:2020:583, paragraph 16 and the case-law cited).
41 It is clear from reading the order for reference that the questions that the referring court has put to the Court relate directly to the facts of the case in the main proceedings.
42 Further, in accordance with the Court’s settled case-law, a rule of national law, pursuant to which courts that are not adjudicating at final instance are bound by legal rulings of a higher court, cannot take away from those courts the discretion to refer to the Court questions of interpretation of EU law concerned by such legal rulings. The Court has held that a court which is not ruling at final instance must be free, if it considers that a higher court’s legal ruling could lead it to give a judgment contrary to EU law, to refer to the Court questions which are of concern to it (judgment of 5 March 2019, Eesti Pagar, C‑349/17, EU:C:2019:172, paragraph 52 and the case-law cited).
43 The request for a preliminary ruling is therefore admissible.
44 Furthermore, according to the Court’s settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. In that context, the Court may extract from all the information provided by the referring court, in particular from the grounds of the order for reference, the legislation and the principles of EU law that require interpretation in view of the subject matter of the dispute in the main proceedings, even if those provisions are not expressly indicated in the questions referred (judgment of 11 November 2020, DenizBank, C‑287/19, EU:C:2020:897, paragraph 59).
45 In the grounds of its decision, the referring court refers to Directive 2006/112, the Eighth VAT Directive and Directive 2008/9 without distinction. In the questions it puts to the Court, it refrains from specifying the provisions whose interpretation it is seeking.
46 The order for reference nevertheless makes clear that the VAT refund applications to which the case in the main proceedings relates were submitted to the Spanish tax authority on 20 June 2006 and 29 June 2007 respectively and concern transactions that occurred in the financial years 2005 and 2006.
47 Under its Articles 411 and 413, Directive 2006/112, which repealed the Sixth VAT Directive, did not come into force until 1 January 2007. Furthermore, according to Article 28(1) of Directive 2008/9, that latter directive, which repealed the Eighth VAT Directive, was intended to apply to refund applications submitted after 31 December 2009.
48 This means that only the Sixth VAT Directive and the Eighth VAT Directive apply to the facts in the case in the main proceedings.
The first and third questions
49 By its first and third questions, which should be examined together, the referring court asks, in essence, whether the provisions of the Eighth VAT Directive and the principles of EU law, in particular the principle of tax neutrality, must be interpreted as meaning that they preclude a VAT refund application from being rejected where the taxable person has failed to produce all the documents and information required by that directive to the competent tax authority within the time limits given, even where requested by the tax authority, irrespective of the fact that the documents and information in question were submitted by the taxable person, at its own initiative, in the review procedure or legal action brought against the decision rejecting entitlement to a VAT refund.
50 It must be observed that, according to the Court’s consistent case-law, like the right to deduct, the right to a refund is a fundamental principle of the common system of VAT established by EU legislation, which is intended to relieve the operator entirely of the burden of the VAT due or paid in the course of all his or her economic activities. The common system of VAT therefore ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves, in principle, subject to VAT (judgment of 18 November 2020, Commission v Germany (VAT refund – Invoices), C‑371/19, not published, EU:C:2020:936, paragraph 77).
51 That right to a refund of VAT paid in another Member State, in the manner governed by the Eighth VAT Directive, is the counterpart of the right established by the Sixth VAT Directive to deduct input VAT in the taxable person’s own Member State (see, to that effect, judgments of 25 October 2012, Daimler and Widex, C‑318/11 and C‑319/11, EU:C:2012:666, paragraph 41, and of 18 November 2020, Commission v Germany (VAT refund – Invoices), C‑371/19, not published, EU:C:2020:936, paragraph 78 and the case-law cited).
52 The Court has repeatedly held that the right to deduct and, accordingly, to a refund, is an integral part of the VAT scheme and in principle may not be limited. That right is exercisable immediately in respect of all taxes charged on input transactions (judgment of 18 November 2020, Commission v Germany (VAT refund – Invoices), C‑371/19, not published, EU:C:2020:936, paragraph 79 and the case-law cited).
53 Moreover, according to the Court’s consistent case-law, the fundamental principle of VAT neutrality requires the deduction or refund of input VAT to be allowed if the substantive requirements are satisfied, even if the taxable person has failed to comply with some of the formal requirements. The position may, however, be different if non-compliance with such formal requirements effectively prevents the production of conclusive evidence that the substantive requirements have been satisfied (judgment of 18 November 2020, Commission v Germany (Refund of VAT – Invoices), C‑371/19, not published, EU:C:2020:936, paragraphs 80 and 81 and the case-law cited).
54 It can be seen from Articles 3 and 4 of the Eighth VAT Directive that a taxable person is only eligible for a VAT refund if he or she discharges the obligations laid down in those articles, which include submitting originals of invoices or import documents for the transactions subject to VAT in the Member State of refund.
55 The referring court indicates that the Spanish tax authority twice – on 19 March 2008 and, following the initial refusal of the refund applications in the review proceedings brought by Auto Service, on 13 July 2009 – requested that company to produce evidence additional to its original applications, including all the invoices on which it was basing those applications, and a certificate issued by the Member State where it had its registered office confirming that it was subject to VAT. However, the company did not submit all the documents and information requested to the tax authority. On the contrary, it can be seen from the order for reference that Auto Service submitted the information and documents in question in the proceedings before the Tribunal Económico-Administrativo Central (Central Tax Tribunal).
56 The dispute in the main proceedings therefore concerns not the non-compliance with formal requirements preventing the production of evidence that the substantive requirements for entitlement to a VAT refund were satisfied, but the date on which that evidence may be produced.
57 The Court has already held in that respect that the provisions of the Sixth VAT Directive do not preclude national legislation under which the right to deduct VAT may be refused to taxable persons who are in possession of invoices which are incomplete, even if those invoices are supplemented by the provision of information seeking to prove the occurrence, nature and amount of the transactions invoiced after the tax authority has adopted a decision refusing the right to deduct (judgment of 8 May 2013, Petroma Transports and Others, C‑271/12, EU:C:2013:297, paragraphs 34 to 36). Nevertheless, neither do those provisions prohibit Member States from accepting the rectification of an incomplete invoice after the tax authority has adopted a decision refusing the right to a deduction (judgment of 14 February 2019, Nestrade, C‑562/17, EU:C:2019:115, paragraph 33).
58 It should therefore be found by analogy that the provisions of the Eighth VAT Directive do not preclude national legislation under which the right to a VAT refund may be refused where, without reasonable justification and despite having been sent formal requests for information, the taxable person has not produced the documents to prove that the substantive requirements for obtaining that refund have been satisfied before the tax authority adopts its decision. However, the same provisions do not prevent Member States from accepting the production of such evidence subsequently to that decision.
59 Since it is not governed by the Eighth VAT Directive, the enactment of measures under which evidence is not to be taken into account where it is produced after a decision rejecting a refund application has been adopted is a matter for the national law of each Member State, by virtue of the principle of the procedural autonomy of Member States, provided nevertheless that those measures are not less favourable than those governing similar domestic situations (principle of equivalence) and do not make it impossible in practice or excessively difficult to exercise rights conferred by EU law (principle of effectiveness) (see, by analogy, judgment of 14 February 2019, Nestrade, C‑562/17, EU:C:2019:115, paragraph 35).
60 As regards, first, the principle of effectiveness, it must be observed, on the one hand, that, according to the Court’s consistent case-law, the possibility of exercising the right to a refund of excess VAT without any temporal limit would be contrary to the principle of legal certainty, which requires the tax position of the taxable person, having regard to his or her rights and obligations vis-à-vis the tax authorities, not to be open to challenge indefinitely (judgment of 14 February 2019, Nestrade, C‑562/17, EU:C:2019:115, paragraph 41 and the case-law cited).
61 In the present case, the Spanish tax authority, on two occasions, requested Auto Service to provide it with the outstanding information that it required in order to assess entitlement to the VAT refund at issue in the main proceedings. It is not apparent from the order for reference that the time limit given for responding to those requests was manifestly insufficient or that Auto Service informed the tax authority that it did not hold that information. Under those circumstances, it must be held that the Spanish tax authority, to no avail, exercised the diligence necessary in order to obtain the evidence enabling it to establish whether the refund application submitted by Auto Service was justified. Accordingly, subject to verification by the referring court, nothing rendered it impossible in practice or excessively difficult for Auto Service to exercise its right to a VAT refund.
62 Moreover, it is also for the referring court to verify whether the principle of equivalence, according to which national procedural provisions governing VAT refunds under the Eighth VAT Directive must not be less favourable than those governing similar situations subject to domestic law, has been complied with in the present case (see, to that effect, judgment of 3 June 2021, Bankia, C‑910/19, EU:C:2021:433, paragraphs 46 and 47).
63 In the light of the foregoing, the answer to the first and third questions is that the provisions of the Eighth VAT Directive and the principles of EU law, in particular the principle of tax neutrality, must be interpreted as not precluding an application for the refund of VAT from being rejected where the taxable person has failed to produce all the documents and information required to prove its right to a VAT refund to the competent tax authority within the time limits given, even where requested by the tax authority, irrespective of the fact that the documents and information in question were submitted by the taxable person, at its own initiative, in the review procedure or legal action brought against the decision rejecting such as right to a VAT refund, provided that the principles of equivalence and effectiveness have been complied with, and that it is for the referring court to verify that compliance.
The second question
64 By its second question, the referring court asks, in essence, whether EU law must be interpreted as meaning that the fact that a taxable person who is claiming a VAT refund and has been requested by the tax authority to produce documents does not produce them during the administrative procedure but does so spontaneously during subsequent proceedings amounts to an abuse of rights.
65 It must be recalled that the Court has repeatedly held that EU law cannot be relied on for abusive or fraudulent ends. It is, therefore, for the national courts and judicial authorities to refuse the right of deduction, if it is shown, in the light of objective factors, that that right is being relied on for fraudulent or abusive ends (see, by analogy judgment of 28 July 2016, Astone, C‑332/15, EU:C:2016:614, paragraph 50 and the case-law cited).
66 It must be observed in that respect that, according to consistent case-law, in the sphere of VAT, an abusive practice can be found to exist only if two conditions are satisfied, namely, first, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of Directive 2006/112 and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions and, secondly, it is apparent from a number of objective factors that the essential aim of the transactions concerned is solely to obtain that tax advantage (judgment of 10 July 2019, Kuršu zeme, C‑273/18, EU:C:2019:588, paragraph 35 and the case-law cited).
67 In the present case, any finding of an abusive practice by Auto Service would relate not to the transactions that gave rise to the applications for a VAT refund but to the procedural aspects of the litigation concerning that application.
68 From that perspective, it must be held that the mere fact that a taxable person produces the documents and information proving that the substantive requirements of its entitlement to a VAT refund are satisfied after the competent administrative authority has adopted the decision refusing that refund, does not, as such, constitute an abusive practice within the meaning of paragraph 66 of the present judgment. It is sufficient to hold that it does not appear, from the information before the Court, that the sole aim of that conduct was to obtain a tax advantage the grant of which would be contrary to the purpose of the provisions of EU law providing for the grant of that advantage.
69 In the light of the foregoing, the answer to the second question is that EU law must be interpreted as meaning that the fact that a taxable person who is claiming a refund of VAT and has been requested by the tax authority to produce documents does not produce them during the administrative procedure but does so spontaneously during subsequent proceedings does not amount to an abuse of rights.
Costs
70 Since 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 (Tenth Chamber) hereby rules:
1. The provisions of Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes – Arrangements for the refund of value added tax to taxable persons not established in the territory of the country, and the principles of EU law, in particular the principle of tax neutrality, must be interpreted as not precluding an application for the refund of value added tax (VAT) from being rejected where the taxable person has failed to produce all the documents and information required to prove its right to a VAT refund to the competent tax authority within the time limits given, even where requested by the tax authority, irrespective of the fact that the documents and information in question were submitted by the taxable person, at its own initiative, in the review procedure or legal action brought against the decision rejecting such a right to a VAT refund, provided that the principles of equivalence and effectiveness have been complied with, and that it is for the referring court to verify that compliance.
2. EU law must be interpreted as meaning that the fact that a taxable person who is claiming a refund of value added tax (VAT) and has been requested by the tax authority to produce documents does not produce them during the administrative procedure but does so spontaneously during subsequent proceedings does not amount to an abuse of rights.
[Signatures]