Case C-162/07

Ampliscientifica Srl

and

Amplifin SpA

v

Ministero dell’Economia e delle Finanze

and

Agenzia delle Entrate

(Reference for a preliminary ruling from the

Corte suprema di cassazione)

(Sixth VAT directive – Taxable persons – Second subparagraph of Article 4(4) – Parent companies and subsidiaries – Implementation by the Member State of the single taxable person scheme – Conditions – Consequences)

Summary of the Judgment

1.        Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable persons

(Council Directive 77/388, Art. 4(4), second subpara.)

2.        Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Mechanism to simplify declarations and payments of value added tax

(Council Directive 77/388)

1.        The second subparagraph of Article 4(4) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is a provision which, in order to be implemented by a Member State, requires prior consultation by that State of the Advisory Committee on value added tax and the adoption of national legislation authorising persons, in particular companies, established in the territory of the country who, while legally independent, are closely bound to one another by financial, economic and organisational links, no longer to be treated as separate taxable persons for the purposes of value added tax in order to be treated as a single taxable person to whom a single value added tax identification number is allocated and, accordingly, the sole person entitled to submit value added tax declarations. Where there has been no prior consultation of the Advisory Committee on value added tax, national legislation which meets those criteria constitutes legislation adopted in breach of the procedural requirement laid down in the second subparagraph of Article 4(4) of Sixth Directive 77/388.

(see para. 23, operative part 1)

2.        The principle of fiscal neutrality does not preclude national legislation which simply treats taxable persons wishing to opt for a mechanism to simplify value added tax declarations and payments differently according to whether the parent company or body has held more than 50% of the share capital or stock of the persons with whom it is linked since at least the beginning of the calendar year preceding that in which the declaration was made or, on the contrary, satisfies those conditions only after that date. Moreover, neither the principle prohibiting the abuse of rights nor the principle of proportionality precludes such legislation.

(see para. 32, operative part 2)

JUDGMENT OF THE COURT (Third Chamber)

22 May 2008 (*)

(Sixth VAT directive – Taxable persons – Second subparagraph of Article 4(4) – Parent companies and subsidiaries – Implementation by the Member State of the single taxable person scheme – Conditions – Consequences)

In Case C‑162/07,

REFERENCE for a preliminary ruling under Article 234 EC from the Corte Suprema di Cassazione (Italy), made by decision of 30 November 2006, received at the Court on 26 March 2007, in the proceedings

Ampliscientifica Srl,

Amplifin SpA

v

Ministero dell’Economia e delle Finanze,

Agenzia delle Entrate,

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, U. Lõhmus, A. Ó Caoimh, P. Lindh and A. Arabadjiev (Rapporteur), Judges,

Advocate General: J. Mazák,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 30 January 2008,

after considering the observations submitted on behalf of:

–        Ampliscientifica Srl and Amplifin SpA, by M. Garavoglia, Avvocato,

–        the Italian Government, by I. M. Braguglia, acting as Agent, and G. De Bellis, Avvocato dello Stato,

–        the Cypriot Government, by E. Syméonidou, acting as Agent,

–        the United Kingdom Government, by C. Gibbs, acting as Agent, and I. Hutton, Barrister,

–        the Commission of the European Communities, by A. Aresu and M. Afonso, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This reference for a preliminary ruling concerns the interpretation of the second subparagraph of Article 4(4) of the 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, the ‘Sixth Directive’).

2        The reference was made in proceedings between Ampliscientifica Srl (‘Ampliscientifica’) and Amplifin SpA (‘Amplifin’) on the one hand and the Ministero dell’Economia e delle Finanze (Ministry of Finance) and the Agenzia delle Entrate (Revenue Authority) on the other concerning an additional assessment to value added tax (‘VAT’) which was addressed to Amplifin in respect of the years 1990 and 1991.

 Legal context

 Community legislation

3        Article 4(1) of the Sixth Directive provides as follows:

‘“Taxable person” shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity.’

4        The second subparagraph of Article 4(4) of the Sixth Directive is worded as follows:

‘Subject to the consultations provided for in Article 29, each Member State may treat as a single taxable person persons established in the territory of the country who, while legally independent, are closely bound to one another by financial, economic and organisational links.’

5        Article 27(1) of the Sixth Directive provides as follows:

‘The Council, acting unanimously on a proposal from the Commission, may authorise any Member State to introduce special measures for derogation from the provisions of this Directive, in order to simplify the procedure for charging the tax or to prevent certain types of tax evasion or avoidance. Measures intended to simplify the procedure for charging the tax, except to a negligible extent, may not affect the amount of tax due at the final consumption stage.’

6        Article 29 of the Sixth Directive sets up an Advisory Committee on VAT.

 National legislation

 The Decree of the President of the Republic No 633

7        The third paragraph of Article 73 of the Decree of the President of the Republic No 633 of 26 October 1972 establishing and regulating value added tax (ordinary supplement to GURI No 292 of 11 November 1972), as amended by the Decree of the President of the Republic No 24 of 29 January 1979 (GURI No 30 of 31 January 1979), provides as follows:

‘The Minister of Finance shall have authority to issue decrees laying down appropriate rules which provide that declarations of subsidiary companies may be submitted by the parent company or body to the office for the place at which it is registered for tax purposes and that payments … may be made to that office of the total amount due by the parent company or body and by the subsidiary companies, net of any deductible excess. The declarations, which are also to be signed by the parent company or body, must also be submitted to the offices for the places at which the subsidiary companies are registered for tax purposes, without prejudice to the other obligations and liabilities of those companies. A company shall be regarded as a subsidiary where over 50% of the shares or stock in that company has been held by another company since the beginning of the previous calendar year.’

 The Ministerial Decree of 13 December 1979

8        The authority provided for in the third paragraph of Article 73 was implemented by the Ministerial Decree of 13 December 1979 adopting rules on value added tax relating to payments and declarations by subsidiary companies (GURI No 344 of 19 December 1979), as amended by the Ministerial Decree of 18 December 1989 (GURI No 301 of 28 December 1989 (‘the 1979 Decree’). The 1979 Decree organises and facilitates the manner in which payments and declarations can be made by parent companies and subsidiaries by enabling the parent company, to a certain extent, to act on behalf of its subsidiary company or companies.

9        Article 2 of the 1979 Decree states that ‘only … companies in which the parent company or body or other subsidiary of that company or body within the meaning of this article has held more than 50% of the share capital or stock since the beginning of the previous calendar year shall be regarded as subsidiary companies’.

10      Article 3 of the 1979 Decree states accordingly that the declaration of the parent company ‘also to be signed by the representatives of the subsidiary company, must indicate … the VAT number of the subsidiary companies as well as the competent (VAT) office for each of them’.

11      The first paragraph of Article 5 of the 1979 Decree provides as follows:

‘A parent company or body wishing to rely on this decree must also submit the annual declarations of its subsidiaries to the [VAT] office for the place at which it is registered for tax purposes. Those declarations, which are also to be signed by the representative of the parent company or body, must also be submitted, together with their annexes, by the subsidiary companies to the competent VAT office for each of them. The name of the parent company or body along with the appropriate VAT number must be stated in the declarations of the subsidiary company.’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

12      The dispute in the main proceedings concerns the tax declarations submitted by Ampliscientifica for 1990 and by Amplifin for 1990 and 1991 (‘the contetsted declarations’). Ampliscientfica and Amplifin are companies incorporated under Italian law which formed part of the Amplifon group, which was engaged in the research and development of new scientific instruments.

13      More than 50% of the share capital of Amplifscientifica, which was formed in February 1989, was subscribed by Amplaid SpA, 99% of which was in turn controlled by Amplifin. Ampliscientifica’s business ceased in February 1993. For the 1990 tax year, Amplifin submitted to the Milan VAT office the declaration provided for under the 1979 Decree, after making an entry in its accounts transferring a VAT debt for which Ampliscientifica had previously been liable. For the 1991 tax year, it did the same with another of its subsidiaries that was involved in the real estate sector, Ampliare Srl, formed in November 1990, which resulted in a significant VAT credit being transferred to it.

14      The Milan VAT office took the view that Amplifin was not entitled to submit the contested declarations, since Article 2 of the 1979 Decree provides that, in order for the simplified VA