Notice for the OJ

 

Action brought on 28 January 2003 by the Commission of the European Communities against the United Kingdom of Great Britain and Northern Ireland.

    (Case C-33/03)

An action against the United Kingdom of Great Britain and Northern Ireland was brought before the Court of Justice of the European Communities on 28 January 2003 by the Commission of the European Communities, represented by R. Lyal, acting as agent, with an address for service in Luxembourg.

The Applicant claims that the Court should:

(1)declare that by granting taxable persons the right to deduct value added tax in respect of certain supplies of road fuel to non-taxable persons, contrary to Articles 17 and 18 of the Sixth Council Directive of 17 May 1977 (77/388/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes - common system of value added tax: uniform basis of assessment¹, the United Kingdom has failed to fulfil its obligations under the EC Treaty;

(2)order the United Kingdom to pay the costs.

Pleas in law and main arguments:

By virtue of the VAT (Input Tax) (Person Supplied) Order 1991 [hereinafter, "the disputed Order"], a taxable person is granted the right to deduct VAT in respect of supplies of road fuel to a non-taxable person, where the taxable person reimburses to the latter the cost of the fuel. Although the language of the Order is general, it appears that the right of deduction is granted to employers in respect of purchases of road fuel by their employees.

In the Commission's view, the provisions of the Order are contrary to the Sixth VAT Directive in three respects and in relation to two provisions. First of all, the disputed Order grants a right of deduction in respect of supplies to another, non-taxable, person, contrary to Article 17(2)(a). Secondly, the measure does not state that deduction can be granted only in respect of goods and services used for the purposes of taxable transactions; it thus fails to comply with the condition to that effect set out in Article 17(2). Finally, deduction is granted in the absence of any VAT invoice, contrary to Article 18(1)(a).

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¹ - OJ L 145, 13.06.77, p. 1.