Case C-33/03

Commission of the European Communities

v

United Kingdom of Great Britain and Northern Ireland

 

(Failure of a Member State to fulfil obligations – Articles 17 and 18 of the Sixth VAT Directive – Provision of national law under which an employer may deduct VAT on supplies of fuel to his employees when reimbursing their fuel costs)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax – National legislation allowing an employer to deduct the tax on supplies of fuel to his employees – Fuel not used solely for business purposes – Not permissible

(Council Directive 77/388, Arts 17(2)(a) and 18(1)(a))

By granting taxable persons, in this case employers, the right to deduct value added tax on certain supplies of fuel to non-taxable persons, in this case their employees, in conditions that do not ensure that the tax deducted attaches solely to fuel used for the purposes of the taxable person’s taxable transactions, a Member State fails to fulfil its obligations under Articles 17(2)(a) and 18(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.

(see paras 18, 26, 31 and operative part)