OPINION OF ADVOCATE GENERAL
KOKOTT
delivered on 16 November 2023 (1)
Case C‑606/22
Dyrektor Izby Administracji Skarbowej w Bydgoszczy
v
B. sp. z o.o., formerly B. sp.j.,
interested party:
Rzecznik Małych i Średnich Przedsiębiorców
(Request for a preliminary ruling from the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland))
(Reference for a preliminary ruling – Common system of value added tax – Directive 2006/112/EC – Taxable amount – Principle of fiscal neutrality – Mistake as to the correct tax rate – Adjustment of the tax debt as a result of a change in the taxable amount – National practice of refusing a claim for a refund on account of a change in the taxable amount on the ground that no invoices were issued, which had to be adjusted beforehand – Adjustment of invoices not necessary where there are no invoices to final customers – No risk of loss of tax revenue – Plea of unjust enrichment – Principle of nemo auditur propriam turpitudinem allegans)
I. Introduction
1. Value added tax (VAT) law is an area of law which is fraught with risk for undertakings. If the taxable person wrongly proceeds on the basis of a tax rate which is too low, it is nevertheless liable for the correct (higher) amount of tax, which it is required to pay to the State. That is because VAT is always included in the agreed price in the legally applicable amount. Whether or not the parties knew this is irrelevant to the tax creditor. This also applies where an undertaking cannot subsequently pass on the higher amount of VAT to its customers for reasons in law or fact.
2. In this request for a preliminary ruling, the Court is required once again (2) to address the reverse case, in which the taxable person wrongly calculated the tax at a rate which was too high and paid it. Strikingly, the mistake was apparently only made at the instigation of the tax authorities. The tax authorities have subsequently taken the view that a reduced tax rate is correct. The taxable person would now like to recover the excess tax paid but not due.
3. The key issue now is whether the State is entitled in this case to keep the excessive VAT or whether it must repay it to the taxable person. After all, the tax did not substantively become chargeable in that amount. Moreover, since no invoices were issued with VAT entered, the question of an invoice adjustment does not arise. Polish law, however, does not allow for a refund of the excessive (incorrect) tax without a prior invoice adjustment.
4. The customer would in fact have to claim back the overstated VAT it paid from the supplier. However, if this is not possible in law (for example if a fixed price had been agreed) or in fact (for example because the customers are not named or are unaware of the correct VAT rate), the question arises as to who is entitled to remain definitively ‘enriched’ by the error as to the correct amount of tax. Is it the State or the taxable person?
II. Legal framework
A. European Union law
5. The EU legal framework is formed by Council Directive 2006/112/EC on the common system of value added tax (‘the VAT Directive’). (3) Article 1(2) of the VAT Directive reads as follows:
‘The principle of the common system of VAT entails the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, however many transactions take place in the production and distribution process before the stage at which the tax is charged.
On each transaction, VAT, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of VAT borne directly by the various cost components. …’
6. Article 73 of the VAT Directive concerns the taxable amount and reads as follows:
‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’
7. Article 78 of the VAT Directive sets out the factors which are to be included in or excluded from the taxable amount:
‘The taxable amount shall include the following factors:
(a) taxes, duties, levies and charges, excluding the VAT itself; …’
8. Article 90(1) of the VAT Directive explains the effects of certain subsequent events on the taxable amount:
‘In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the Member States.’
9. Article 203 of the VAT Directive governs the tax debt resulting from the entering of VAT on an invoice:
‘VAT shall be payable by any person who enters the VAT on an invoice.’
B. Polish law
10. Poland implemented the VAT Directive by the Law of 11 March 2004 on the tax on goods and services (Ustawa o podatku od towarów i usług, Dz. U. 2006, item 710, as amended; ‘the Law on VAT’).
11. Article 29(4a) and (4c) of the Law on VAT in the version in force until 31 December 2013 read as follows:
‘(4a) Where the taxable amount is subject to reduction in relation to the amount specified in the issued invoice, the taxable person may reduce the taxable amount on condition that he or she holds, before the passing of the time limit for filing a tax return for the tax period in which the purchaser of the goods or services received the correcting invoice, acknowledgement of receipt of the correcting invoice by the purchaser of the goods or services to whom the invoice was issued. Where the taxable person receives acknowledgement of receipt, by the purchaser of the goods or services, of the correcting invoice after the passing of the time limit for filing a tax return for the tax period concerned, he or she may take account of the correcting invoice in relation to the tax period in which he or she obtained that acknowledgement.’
‘(4c) Paragraph 4a shall apply mutatis mutandis in the case where a mistake is found in the amount of tax shown on the invoice, and where an invoice correcting an invoice showing an amount of tax greater than the amount due is issued.’
12. Article 29a(10), (13) and (14) of the Law on VAT in the version in force since 1 January 2014 reads as follows:
‘(10) The taxable amount, subject to paragraph 13, shall be reduced by:
(1) the amounts of discounts and rebates granted after the sale;
(2) the value of the returned goods and packaging, subject to paragraphs 11 and 12;
(3) all or part of the payment received before the sale and returned to the purchaser, if the sale did not take place;
(4) the value of the returned amounts of subsidies, subventions and other similar amounts referred to in paragraph 1.’
‘(13) In the cases referred to in paragraph 10(1) to (3), the reduction of the taxable amount, in relation to the taxable amount specified in the invoice issued with the tax shown, shall be conditional upon the taxable person holding an acknowledgement, obtained before the passing of the time limit for filing a tax return for the tax period in which the purchaser of goods or recipient of services received the correcting invoice, of receipt of the correcting invoice by the purchaser of goods or recipient of services to whom the invoice was issued. Where the taxable person receives acknowledgement of receipt, by the purchaser of goods or recipient of services, of the correcting invoice after the time limit for filing a tax return for the tax period concerned, he or she may take account of the correcting invoice in relation to the tax period in which he or she obtained that acknowledgement.’
‘(14) Paragraph 13 shall apply mutatis mutandis in the case where a mistake is found in the amount of tax shown on the invoice, and where an invoice correcting an invoice showing an amount of tax greater than the amount due is issued.’
13. Article 72(1) of the Polish Tax Code (Ordynacja podatkowa) of 29 August 1997 (Dz. U. 2017, item 201, as amended; ‘the Tax Code’) governs the overpayment of taxes:
‘The following amounts shall be regarded as constituting overpayment
(1) tax which is overpaid or unduly paid; …’
14. Article 81(1) and (2) of the Tax Code governs the correction of tax returns:
‘1. Unless separate regulations provide otherwise, taxable persons, payers and collectors may amend a tax return filed previously.
2. A return shall be amended by filing an amended return.’
15. In the Regulation of the Minister for Finance on cash registers (Rozporządzenie Ministra Finansów w sprawie kas rejestrujących) of 14 March 2013 (Dz. U. 2013, item 363; ‘the Regulation on cash registers’) the following rules can be found in Paragraph 3(5) and (6):
‘(5) If there is an obvious mistake in the records, the taxable person shall correct it without delay by including in a separate record:
(1) the incorrectly recorded sales (gross sales value and output tax value);
(2) a brief description of the reason for the mistake and the circumstances under which it was made, attaching the original cash register receipt documenting the sale with respect to which the obvious mistake occurred.
(6) In the case referred to in subparagraph 5, the taxable person shall record the sales in the correct amount using the cash register.’
III. Facts of the case and reference for a preliminary ruling
16. On 27 January 2016, B. sp. j. (‘B’) filed amended VAT returns for tax periods corresponding to certain months in the period 2012-2014. The 8% tax rate applied to the provision of recreational services (related to admission to gym premises and free use of gym facilities) instead of the standard 23% rate previously applied.
17. In the present dispute, B argued that it applied the normal tax rate (23%) to the services provided because the tax authorities had indicated in their interpretations of tax law that such services should be taxed at that VAT rate. Only when the tax authorities changed their view and determined that these services should be taxed at the reduced rate (8%) did B decide to adjust the turnover it entered in the tax returns.
18. By decision dated 22 June 2017, the Naczelnik Drugiego Urzędu Skarbowego (Head of the Second Tax Office, Poland) refused to recognise that the applicant had overpaid tax for the aforementioned tax periods. By decision dated 24 November 2017, the Dyrektor Izby Administracji Skarbowej w Bydgoszczy (Director of the Tax Administration Chamber, Bydgoszcz, Poland) upheld the aforementioned decision.
19. He found that, in the amended VAT returns, retail sales, as evidenced by cash register receipts for the sale of gym passes and previously taxed at the 23% rate, were recorded at the 8% rate, resulting in a reduction of the output tax amount. He pointed out that the provisions of the Law on VAT provide for the possibility of adjusting the taxable amount only if the transaction is evidenced by a VAT invoice. In his opinion, there are no regulations that would resolve the question of whether the taxable amount and output tax can be adjusted in the case of uninvoiced sales.
20. At the same time, in his view, the provisions of the regulation on cash registers provide for the possibility of amending a return in strictly defined cases, and there is no provision stipulating that it is possible to amend a return where a taxable person, selling goods and services to individuals who do not engage in business activity and recording those sales using cash registers, applies an incorrect VAT rate.
21. He accordingly concluded that, since B had collected tax from final consumers at 23% instead of at 8%, it should consequently pay the entire amount collected as tax due to the Treasury. He also pointed out that the VAT on the services provided was borne by the final consumers. Any refund of the VAT paid to B would result in B receiving an unjustified benefit from the Treasury.
22. B brought an appeal against the decision. By judgment of 7 March 2018, the Wojewódzki Sąd Administracyjny w Bydgoszczy (Regional Administrative Court, Bydgoszcz, Poland) set aside the decision.
23. According to the Wojewódzki Sąd Administracyjny w Bydgoszczy, B has the right to adjust the taxable amount and the output tax on sales that are evidenced by means of receipts. The provisions of the regulation do not list exhaustively all events which may constitute a reason for adjustment. The possibility, or even the necessity, of such adjustment follows directly from the provisions of the Law on VAT defining the taxable amount and the amount of tax. Adjustment is not prevented by the absence of the original cash register receipt issued to the purchaser, which receipt is required for adjustments caused by ‘obvious mistakes’ pursuant to paragraph 3(5) of the regulation. In the case of errors and mistakes, it is not necessary to have proof in the form of the original receipt in order to make a legitimate adjustment. Thus, demonstrating that an error has been made on the basis of other documents is not incompatible with the applicable laws.
24. The Tax Office lodged an appeal against the judgment. The Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland), before which the case is now pending, referred the following question on 4 May 2022:
‘Must [Article 1(2) and Article] 73 of [the VAT Directive] and the principles of neutrality, proportionality and equal treatment be interpreted as precluding a practice on the part of the national tax authorities, in so far as that practice does not allow – on the grounds of lack of a domestic legal basis and unjust enrichment – an adjustment of the VAT taxable amount and output tax if sales of goods and services to consumers at an inflated rate of VAT were registered using a cash register and evidenced by cash register receipts rather than by VAT invoices, with the price (gross sales value) remaining unchanged as a result of that adjustment?’
25. In addition to B, the Polish tax authorities, the Polish Ombudsman for Small and Medium-sized Enterprises, the Republic of Poland, and the European Commission submitted written observations on this question in the proceedings before the Court of Justice. In accordance with Article 76(2) of the Rules of Procedure, the Court did not consider it necessary to hold a hearing.
IV. Legal assessment
A. The questions referred and the course of the investigation
26. By its question, the referring court wishes to know, in essence, whether a taxable person may also change the taxable amount and claim a refund where it has paid VAT which is not due (see B. below) because it wrongly calculated its price at a rate which is too high.
27. In its question, the referring court emphasises that Polish law contains no legal basis for a correction of the taxable amount in the present case. It is therefore necessary to clarify whether such a basis is required or whether there is a right to a refund under EU law in favour of the taxable person if it has (wrongly) paid VAT which is not due (see C. below). If there is such a right to a refund under EU law, the question arises as to whether this is possibly excluded because an invoice adjustment is not possible due to the lack of an invoice. The interpretation of Article 203 of the VAT Directive could be helpful in this regard (see D. below). In addition, a right to a refund could be precluded by the plea of unjust enrichment since the customers paid the price in full – that is to say including the excess VAT (see E. below). However, this would require that the tax creditor be able to raise that plea in the first place, which seems doubtful in this case. Apparently, the taxable person was merely ‘encouraged’ to apply the incorrect tax rate by the tax authorities (see F. below).
B. The VAT chargeable and due in the case of an incorrectly calculated tax rate
28. Thus, the question of the VAT which is actually chargeable and due in the case of an incorrectly calculated tax rate must be answered first. The answer follows from Article 73 of the VAT Directive, in conjunction with Article 78(a) thereof, and is confirmed by Article 1(2) thereof.
29. Under Article 73 of the VAT Directive, the taxable amount is to include ‘everything which constitutes consideration’ obtained or to be obtained by the supplier. The consideration corresponds to the agreed price which the customer has paid. Article 78(a) of the VAT Directive goes on to make it clear that the taxable amount is to include all taxes, excluding the VAT itself. The relevant rate is then to be applied to that taxable amount (Article 93 of the VAT Directive). Article 1(2) of that regulation states more clearly that on each transaction, VAT, calculated on the price of the goods or services at the rate applicable to such goods or services, is to be chargeable after deduction of the amount of VAT.
30. As a result, in order to determine the taxable amount, the value added tax under Article 78(a) of the VAT Directive must be deducted from any consideration within the meaning of Article 73 of thereof. However, Article 78(a) (and also Article 1(2)) does not refer to the purported VAT, the agreed VAT or the calculated VAT, but ‘the VAT’. That can only mean the VAT due by law.
31. At a tax rate of 8%, the VAT to be deducted from the consideration pursuant to Article 78(a) of the VAT Directive is exactly 8/108. If the agreed price for the services (thus the consideration) was 123 in this case, the VAT included therein is 8/108 of 123, thus 9.11. That is to be deducted from 123, resulting in a taxable amount under Article 73 of the VAT Directive of 113.89. The rate of 8% provided for by law is then applied to that, resulting in a VAT debt of 9.11.
32. That basic element to be found in Article 1(2) and Article 73 of the VAT Directive, in conjunction with Article 78(a) thereof, means that in every agreed (gross) price the VAT is always included in the (applicable) amount which is provided for by law. Whether or not the contracting parties knew that is irrelevant as regards the tax due to the tax creditor (in this case the Polish State).
33. If the supplier wrongly calculates tax at a rate which is too low (the price would then be 108), it still owes the tax in the correct amount (23/123 of 108). Whether it can subsequently increase the consideration in order to pass on that higher tax to the recipient is then a question of civil law and the risk of the supplier. If the supplier wrongly calculates at a tax rate which is too high (the price would then be 123), it also owes the tax (only) in the correct amount (8/108 of 123). Whether it must subsequently reduce the consideration is then also a question of civil law and in this case more the risk of the recipient.
34. In all cases, the recipient is charged the VAT provided for by law, which the supplier must pay to the tax creditor in that amount. This confirms the nature of VAT as a general tax on consumption, which seeks to tax the recipient’s expenditure on a supply of goods or services. (4) That is also what Article 1(2) of the VAT Directive means when it refers to a ‘tax on consumption exactly proportional to the price of the goods and services’. Possible calculation errors by the contracting parties have, when determining the price, no effect on the correct tax revenue, which arises solely from the expenditure of the recipient (that is to say the price due or paid) and the (correct) tax rate provided for by law.
35. Logically, the Court of Justice has ruled that when the price of a good has been established by the parties without any reference to VAT, the agreed price already includes VAT. (5) This is the case even if the parties knowingly agreed on no VAT with fraudulent intent and kept the transaction secret from the tax authorities. (6) In that case too, the VAT is already included in the agreed consideration and is owed in that amount.
36. Consequently, – contrary to the view of the Commission – it cannot be said that the recipient (the Commission refers to the final consumer in that regard) has paid too much VAT in this case, as B also rightly points out. With a consideration of 123 and a tax rate of 8%, the recipient has paid the correct VAT of 9.11. This is ensured by the directive.
37. The tax authorities’ argument that a change to the taxable amount is necessary in this case is also ineffective. The taxable amount (that is to say the consideration) for the VAT has not changed. The amount spent by the recipient and received by the supplier is still the same. Only the value added tax included therein was incorrect in calculating the price. A change of the taxable amount pursuant to Article 90 of the VAT Directive is not possible in this case.
38. Only if the consideration is subsequently adjusted by way of civil proceedings (for example from 123 to 108) is there a change in the taxable amount. In that case, the VAT Directive provides for the corresponding correction in Article 90(1). Only that subsequent change in the price leads to a subsequent change in the taxable amount.
39. Contrary to the view taken by the Commission, those considerations are not called into question by the decisions of the Court (7) on the recipient’s direct claims against the Member State. The Court ruled in those decisions that the principles of effectiveness and VAT neutrality are observed if there is a system in which, first, the supplier of the goods who has paid the VAT to the tax authority in error may seek to be reimbursed and, second, the purchaser of those goods may bring a civil law action against that supplier for recovery of the sums paid but not due. (8) That possibility still exists for the recipients of B’s services.
40. Only if reimbursement of the VAT becomes impossible or excessively difficult, in particular in the case of the insolvency of the supplier, may the principle of effectiveness require that the purchaser of the service concerned (in this case, B’s customers) be able to address his application for reimbursement to the tax authorities directly. (9) However, such a direct claim for implementation of the principle of neutrality can be possible only in favour of a taxable person who, moreover, has already unsuccessfully approached the other party to the contract beforehand.
41. However, in this case the individual final consumer – as the Commission appears to overlook – does not have a legal relationship with the tax creditor within which it could claim a refund of the VAT which it has overpaid.
42. In this case, the recipients are also not taxable persons and therefore that case-law is not at all relevant for that reason alone. In my view, it merely shows that a Member State cannot enrich itself from the error of two taxable persons if they are mistaken, for example, as to the place of the supply or the amount of the tax rate and correction of the error by way of civil proceedings is unsuccessful. This applies all the more if the mistake was encouraged by the tax authorities, as is the case here.
43. In conclusion, the VAT actually incurred and due, even in the case of an incorrectly calculated tax rate, follows solely from Article 1(2) and Article 73 of the VAT Directive, in conjunction with Article 78(a) thereof. The decisive factor is the consideration agreed or received (that is to say the price), which per se includes the VAT in the correct amount. This results from the amount of the consideration and must be deducted from it. Any calculation errors by the parties are initially irrelevant to the tax owed by the taxable person. Only a change in the consideration (for example by way of an adjustment to the contract with an adjustment of the price) results in a changed taxable amount through Article 90 of the VAT Directive and then to a changed tax debt.
C. Right under EU law to a refund in the case of overpaid VAT
44. The referring court asks whether it is compatible with Articles 1(2) and 73 of the VAT Directive and the principles of neutrality, proportionality and equal treatment for there to be no legal basis for a change in the taxable amount in Polish law. The context to this is the fact that a change of the taxable amount in Polish law requires a correction of invoices. That is not possible in this case because B did not issue any invoices. On the other hand, no provision is made for the correction of cash register receipts.
45. In that respect, however, a distinction must be drawn between a change in the taxable amount (Article 90 of the VAT Directive) and a change in the tax return of the supplier.
46. The former would be relevant, for example, if there were a change in the consideration on account of the calculation error (for example, by way of an adjustment of the contract under civil law). That did not happen in the present case. Thus far, the consideration (that is to say the price agreed and paid) has remained unchanged. Consequently, there is no change in the taxable amount (see paragraph 37 above). Only the taxable person’s tax return was incorrect as a result of the wrongly assumed VAT rate.
47. As in the case of a correction of invoices, the VAT Directive contains no provisions on the correction of tax returns by the taxable person where it has calculated the tax incorrectly itself. In the absence of such a provision, the procedure for correcting tax returns falls within the competence of the Member States (principle of procedural autonomy). (10) However, that autonomy is limited by the principles of effectiveness and equivalence. (11)
48. If I understand Polish law correctly, the Polish Tax Code (Article 81) provides for a correction of a filed tax return, but that is ultimately for the referring court to examine. In VAT law, the trader is merely the tax collector acting in the interest of the State (12) and therefore only has to pay the tax which is owed by law (and not the tax that it calculated incorrectly). In the present case, that amounts to 8/108 and not 23/123 of the taxable amount. The principle of effectiveness therefore requires – contrary to the submission by the Polish Government – in principle the possibility of correcting the incorrectly declared VAT debt to the VAT actually owed. Contrary to the assertion made by the Polish Government, the refund of overpaid taxes which are not owed also does not result in an unjustified advantage for the taxable person to the detriment of the State budget.
49. A corresponding right to a refund of overpaid VAT also appears to exist in national law (see Article 81(1) and Article 72 of the Tax Code). If that is not the case, the Court has held in its settled case-law that taxes levied in breach of EU law must be refunded – as the Commission also rightly emphasises in that respect. (13) Therefore, if national law does not provide for the possibility of correcting the tax return and exercising a corresponding right to a refund, such a right arises from EU law.
D. Tax debt under Article 203 of the VAT Directive
50. However, Article 203 of the VAT Directive could preclude such a right to a refund, as the Polish Government and the tax authorities argue in conclusion. Accordingly, a correction – probably of the cash register receipt – is necessary for the tax to be refunded.
51. Article 203 of the VAT Directive provides that the issuer of an invoice owes the tax shown on that invoice. As the Court has already made clear, Article 203 of the VAT Directive thus only covers cases where tax has been wrongly overstated. (14) In such a case, not only the statutory VAT but also the overstated VAT is owed.
52. The purpose of that provision is to avoid any unjustified (15) deduction of input tax by the holder of an incorrect invoice and the resulting tax losses if the tax actually owed and paid were lower. For that reason, Article 203 of the VAT Directive creates an abstract strict liability offence. (16) It is therefore a prerequisite that an invoice has been submitted and that overstated VAT has been shown in it, which gives rise to the risk of an unauthorised input tax deduction by the recipient.
53. However, as the referring court states in the question, the services were ‘evidenced by cash register receipts rather than by VAT invoices’. However, if there are no invoices (and thus no simplified invoices within the meaning of Article 226b of the VAT Directive), the conditions for the application of Article 203 of the VAT Directive have not been fulfilled. Therefore, in the absence of an invoice, the question of correcting an invoice to avoid the legal consequences of Article 203 of the VAT Directive also does not arise.
54. Even if the receipts in question do constitute invoices, the Court has ruled that Article 203 of the VAT Directive does not apply if there is no risk of loss of tax revenue on the ground that the recipients of that service are exclusively final consumers who do not have a right to deduct input VAT. (17) Such a situation is also likely to arise in this case (18) in view of the nature of the service supplied (leisure activities and services relating to physical fitness), but that is for the referring court to examine.
55. In conclusion, B does not owe VAT on account of an unfounded mention thereof in an invoice. Therefore, a correction of the receipts is also not necessary.
E. Plea of unjust enrichment
56. By the question referred, the referring court also seeks to ascertain whether any right to a refund on the part of B is precluded by the fact that final consumers have borne the excessive VAT as part of the price, with the result that, in the event of a refund of the VAT, it is ultimately the taxable person making the supply (in this case, B) that would be unjustly enriched.
57. EU law permits a national legal system to disallow repayment of charges which have been levied but were not due, where to allow such repayment would lead to unjust enrichment of the recipient. (19) However, as the Court has already ruled, enrichment does not already exist where the charge contrary to EU law has been passed on to the final consumer by means of the price, and thus the final consumer has borne it. That is because, even where the charge is wholly incorporated in the price, the taxable person may suffer as a result of a fall in the volume of his or her sales. (20)
58. In the present case, an undertaking competing with B and applying the correct tax rate would have been in a significantly better position on the market since the competitor could offer a lower price. On the other hand, at the same price, the competitor would have had a significantly higher profit margin than B. All that militates against the possibility of unjust enrichment of B in the present case.
59. As the Court has also stated, a successful plea of unjust enrichment by the Member State requires that the economic burden that the tax unduly paid imposed on the taxable person has been completely neutralised. (21)
60. According to the settled case-law of the Court, the existence and the degree of unjust enrichment which repayment of a charge which was levied though not due under EU law entails for a taxable person can therefore be established only following an economic analysis in which all the relevant circumstances are taken into account, as the tax authorities also rightly emphasise. (22) The burden of proving unjust enrichment lies with the Member State. (23) In the case of indirect taxes (the same applies to the indirectly levied VAT in the present case), it could not be assumed that there is a presumption that they have been passed on. (24) Poland does not appear to have furnished such proof.
61. In that respect, account must also be taken of the fact that, in a case like the present one, in which the final consumers are not known as the actual VAT payers, the VAT wrongly levied in an excessive amount remains with either the State or the trader making the supply. In that respect, Polish tax law grants the State only a reduced tax claim (that is to say, 8/108 of the consideration) with regard to the services provided by B. Under substantive law, the amount in excess of that claim leads to an ‘unjust enrichment’ of the State. By contrast, under civil law, B was entitled to the full amount of the price negotiated with the final consumers, as pointed out above (paragraph 28 et seq.). Until the contract is adjusted, it is in any case not unjustifiably enriched – as the Commission also appears to overlook. The other party to the contract did agree to that price.
62. In that regard, the Court has already held that, in the required overall assessment, it could be relevant whether the contracts concluded between the parties relate to fixed amounts of remuneration for the services provided or basic amounts increased, where appropriate, by the tax applicable. In the first case – that is to say, in the case of an agreement on a fixed amount – there might be no unjust enrichment of the supplier. (25)
63. According to the question referred, the prices would not change in the event of an adjustment of the taxable amount and the tax owed. In that respect, there are fixed amounts (that is, gross prices) in this case, the subsequent adjustment of which – both in favour of and to the detriment of the final consumer (26) – appears to be excluded. I would therefore exclude unjust enrichment of the taxable person per se in the case of an agreed fixed amount vis-à-vis a final consumer. At the time of transaction, the taxable person has either had to accept a lower profit margin or lower competitiveness than its competitors.
64. The outcome might be different if a basic price ‘plus the VAT legally due’ was expressly agreed in a contract. This is not such a case, which, however, would primarily concern the relationship between the supplier and the recipient (and thus civil law) and not the relationship between the tax debtor and the tax creditor.
65. Contrary to the view taken by the Polish State, the return cannot be regarded as unequal treatment of suppliers of services who issue invoices. In principle, they likewise do not change the price for the service (e.g. 123), but merely adjust the VAT to be shown (from 23 to the reduced tax – in this case, 9.11). Only if there is also a change in the price (e.g. by way of civil law) will there be an adjustment to the taxable amount. However, that is independent of whether the supplier has issued an invoice. In that respect, too, there is no unequal treatment.
66. Thus, the fact that the final consumers paid a final price which was calculated incorrectly (because it contained an excessively high proportion of VAT and therefore an excessively small profit margin) does not preclude the tax from being refunded. That does not give rise to unjust enrichment of the taxable person in any event if a so-called fixed amount (fixed price) was agreed.
F. In the alternative: Relevant causal contribution
67. Even if it were assumed that B was unjustly enriched in this case, it would still be necessary to clarify whether the Polish State is entitled to keep the tax that is not legally owed, even though it caused the incorrect calculation itself. In the latter case, it seems contradictory – especially for a State governed by the rule of law – for the party that caused the incorrect VAT calculation in respect of the taxable person to claim that the taxable person was unjustly enriched in order to retain a tax that was never legally due.
68. In a judgment, the Court just recently applied the principle nemo auditur propriam turpitudinem allegans (no one may rely on his or her own wrongdoing) and thus held that a party cannot be allowed to derive economic advantages from his, her or its unlawful conduct. (27) The statements which Poland made earlier to B, claiming that the standard tax rate applied, were false and therefore unlawful. Refusing to return the unlawfully obtained tax would leave Poland with the economic advantages that its own unlawful behaviour had caused in the first place.
69. In addition, B, as the taxable person, pays the tax due on behalf of, and in the interests of, the State. (28) In that respect, it assumes the position of an intermediary. Above all, it bears the risk of correctly calculating the tax due since its profit margin is reduced if the rate is incorrectly assumed to be too low (see paragraph 58 above). In contrast, the tax creditor always receives the tax in the correct amount.
70. However, if the State always receives the correct tax and thus bears no risk, it would seem unfair, if not contradictory, to refuse to repay wrongly paid VAT which had only arisen because the State itself had initially insisted on the wrong tax rate. The enrichment inevitably accrues to the State or the taxable person. Of those two parties, however, it was the Polish State which, by ‘specifying’ an incorrect rate, caused the collection of an excessively high tax and thus the enrichment.
71. As the Commission itself acknowledges and the Ombudsman rightly emphasises, the taxable person (that is to say B) acted in good faith in this case. As a result of that causal contribution by the Polish State, however, it would be contradictory to rely on the resulting ‘enrichment’ against B, who was entitled to and did trust the information provided by the tax authorities, and to allow the party which caused the mistake (in this case the Polish State) to keep a tax which had not legally arisen in that amount.
72. Thus, even if unjust enrichment is assumed in the alternative, it is not possible for the Polish State to invoke that circumstance since it caused that circumstance itself.
V. Conclusion
73. I therefore propose that the Court answer the question referred for a preliminary ruling by the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland) as follows:
Article 1(2) and Article 73 of the VAT Directive, in conjunction with Article 78(a) thereof, preclude a practice of the national tax authorities whereby an adjustment of the tax owed in the tax return is considered inadmissible if supplies of goods and services to consumers were made at an excessive VAT rate and only cash register receipts – that is to say no VAT invoices – were issued. In any event, the taxable person is not unjustly enriched in the case of a fixed amount agreed with a final consumer.