C-123/87

My Lords, matter of commercial law; whereas the VAT administration considered that the contents of an invoice for VAT purposes was a matter for tax law and that such an invoice must consequently, if it is to confer entit­ lement to the deduction, contain all the information required by tax law as well as These two joined cases are references from that required by commercial law. the Court of First Instance, Brussels, concerning the powers of Member States to impose additional requirements as to the form and content of an invoice, over and above those mentioned in the Sixth VAT Directive (77/388/EEC (Official Journal On 6 April 1987, the Court of First 1977, L 145, p. 1)) for that invoice to be Instance, Brussels, stayed proceedings and acceptable as a VAT invoice justifying the referred the following question to this taxpayer's right to deduct VAT paid to Court: suppliers of goods and services ('input VAT') from the VAT for which he is accountable to the government of the Member State ('output VAT'). The brief facts of the cases are as follows. 'Articles 18 (1) (a), 22 (3) (a) and (b) of the Sixth Council Directive of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes provide that in order to exercise his right to deduct, a taxable person must hold an Mrs Jeunehomme, who trades as 'Le Palais invoice stating clearly the price exclusive of de la Voiture d'Occasion', is a second-hand value-added tax and the corresponding tax car dealer. Following an investigation by the at each rate as well as any exemptions. In Belgian VAT administration, certain irregu­ addition, the documents preparatory to the larities in her bookkeeping came to light. adoption of Article 22 (3) show that the While some were admitted, she contested method of invoicing comes not only within the administration's four demands for the scope of tax law but also, primarily, payment of the VAT element on certain within that of commercial law. invoices for purchases of cars by herself for resale and brought an action before the Court of First Instance, Brussels, claiming the annulment of those demands and the return of property seized in execution. At issue is the validity of the invoices issued by In those circumstances, do Articles Mrs Jeunehomme: she contended that the 18 (1) (a), and 22 (3) (a) and (b) of the contents of an invoice fall to be decided as a Sixth Directive permit the Belgian State to

In those circumstances, do Articles 18 (1) (a), and 22 (3) (a) and (b) of the Sixth Directive permit the Belgian State to provide that a taxable person may exercise Société anonyme d'étude et de gestion the right to deduct only if he holds a immobilière ('EGI') (a company now in document which must contain not merely liquidation and formerly engaged in the usual information contained in an construction work) challenged the Belgian invoice in the traditional sense as defined in VAT authorities' refusal, on the grounds commercial law but also additional infor­ that the relevant invoices omitted certain mation, alien to the nature, essence and compulsory elements and were thus insuffi­ purpose of a commercial invoice, specified ciently precise, to allow the deduction of in Article 2 of Royal Decree No 1 of 23 input VAT on goods and services supplied July 1969 implementing the Belgian VAT to EGI by two of its suppliers, Enterprises Code, where such additional information is Cotradec and Mr Scalegno. EGI claimed, purely technical in nature and is designed to inter alia, that it was contrary to the Sixth facilitate supervision of the collection of the VAT Directive to make the right to deduct tax on the basis of the accounts of another subject to the holding of an invoice taxable person with whom the person in containing all the additional elements question has concluded a contract?' specified by the Belgian secondary legis­ lation. The Court of First Instance, Brussels, referred the following question for a preliminary ruling: Although the two questions referred are not textually identical, they ask the same questions as regards the interpretation to be given to Articles 18 (1) (a), 22 (3) (a) and (b) of the Sixth Directive. Although it seems 'Articles 18 (1) (a), and 22 (3) (a) and (b) that both are subject to the provisions of of the Sixth Council Directive of 17 May Royal Decree No 1, in Case 123/87 1977 on the harmonization of the laws of Jeunehomme there are additional rules spec­ the Member States relating to turnover ifying further information which must be taxes provide that in order to exercise his given in invoices relating to the sale of right to deduct, the taxable person must motor vehicles (Royal Decree No 17 of 20 hold an invoice stating clearly the price July 1970, Article 4 (2) (Moniteur belge of exclusive of VAT and the corresponding tax 31 July 1970, p. 7912)). The Court has been at each rate as well as any exemptions. told that the question raised in these cases

Article 45 of the Belgian VAT Code (Moniteur belge of 17 July 1969, p. 7046) sets out the basic right of a VAT-registered VAT rate(s) applicable and total VAT person to deduct VAT paid on his purchases charged; of goods and services for the purposes of his business from the VAT for which he is accountable on goods and services which he supplies. Article 49 of the Code authorizes where no VAT is charged, grounds for His Majesty the King to lay down detailed VAT exemption. conditions for the exercise of that right. Article 52 of the Code empowers the King to specify the elements which must appear on invoices drawn up by VAT-registered Royal Decree No 17 in Article 4 (2) pres­ persons. cribes that the invoice must bear details of the make, model, year, cubic capacity of engine, horsepower of engine, model of coachwork, chassis number and year of first Article 3 (1) (1) of Royal Decree No 3 of registration, and must give information 10 December 1969 (Moniteur belge of 12 about any equipment and accessories fitted. December 1969, p. 12006) provides that, in order to deduct input VAT from output VAT, the taxable person must hold an invoice which complies with the conditions The question is thus whether the Sixth of Article 2 of Royal Decree No 1 of 23 Directive permits these rules to be enforced July 1969 (Moniteur belge of 30 July 1969, and the deduction of input tax to be p. 7380). By virtue of the latter, the withheld if they are not complied with. elements which must appear on the invoice are as follows:

Article 17 (2) (a) of the Sixth Directive date of the invoice and its serial number in gives the taxable person the right to deduct the trader's sales ledger; from the VAT which he is liable to pay 'value-added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person'. This names and addresses of the VAT-registered right has been accepted by the Court as an person and his client or supplier; essential part of the VAT system (Case 15/81 Gaston Schul Douane Expediteur BV v Inspecteur der Invoerrechten en Accijnzen [1982] ECR 1409 and Case 268/83 date of delivery of goods or supply of Rompelman v Minister van Financien [1985] services; ECR 655, at p. 663).

(b) The invoice shall state clearly the price exclusive of tax and the corresponding tax at each rate as well as any The Sixth Directive was not a complete exemptions. harmonization of all rules relating to the administration of the VAT scheme and it seems to me that the Council left it to Member States to require other matters to (c) The Member States shall determine the be stated in the invoice which were criteria for considering whether a necessary for the administration of the document serves as an invoice.' scheme, so long as the provisions adopted pursued the aims of the Directive, did not create exceptions to the Community scheme and did not limit its scope (see Case 50/76 By Article 22 (8): ' ... Member States may Amsterdam Bulb v Produktschap voor Sierge- impose other obligations which they deem wassen [1977] ECR 137, at p. 151). necessary for the correct levying and collection of the tax and for the prevention of fraud.'

Although Article 22 (2) of the Directive The Directive makes express provision requires every taxable person to keep (recital 17 and Article 27) for Member accounts in sufficient detail to permit States to take or retain special measures application of the VAT scheme and derogating from the Directive in order to inspection by the tax authority, and simplify the levying of the tax or to prevent although by Article 22 (4) returns have to fraud or tax avoidance. Such measures are, be made by the taxable person, it seems to under Article 27, to be notified to the me that the invoice which 'must' be held by

OPINION OF SIR GORDON SLYNN — JOINED CASES 123 AND 330/87

At the end of the day counsel for the applicants accepted, and in my view rightly accepted, that the Member States are not limited to requiring an invoice sufficient for commercial law rules or practice. He The requirements of Article 2 of Royal argued, however, that even if Member Decree No 1 do not seem to me to go States may impose additional requirements, beyond what is reasonably necessary for the the absence of these should not lead to the purposes of verification and fiscal control refusal of the right to deduct though they and they are not disproportionate to that may lead to a penalty or fine being imposed, aim nor do they have the effect of rendering and that if a 'commercial' invoice is given it virtually impossible or difficult in practice there is without more a right to deduct for a taxable person to exercise his right to input tax. deduct input tax. These rules seem to me to reflect the legislation of several if not many Member States. The date of the operation, the event giving rise to chargeability and the information needed to decide what rate of I do not accept this argument. It seems to tax is applicable are all justified. By way of me that if requirements can lawfully be example it seems to me, as counsel for Spain imposed by a Member State, then an invoice contended at the hearing, that the serial which does not satisfy these requirements in number of the invoice is reasonably substance is not an invoice which enables necessary in order to check against the the taxpayer to exercise his right to deduct accounts of the buyer and the seller; the without more. names and addresses of the VAT registered person and his supplier, the description of the goods and a statement of the price are all necessary if there is to be adequate moni­ toring of the collection and paying in of An invoice which complies with the rules is VAT and the prevention of fraud. the 'ticket of admission' to the right to deduct, subject to its subsequently being shown by the tax authorities to be false; if the invoice does not comply, it may be that the taxpayer can prove the genuineness of the transaction and that his supplier I accordingly conclude that the accounted for the VAT which he has paid requirements of Article 3 (1) (1) of Royal as 'input tax', but if the invoice is Decree No 3 and of Article 2 of Royal incomplete in a material respect the onus is Decree No 1 are compatible with the on him to establish his right to deduct. provisions of the Sixth Directive.

On the face of it some of the information specified in Royal Decree No 17 will have to be given as part of the 'usual designation' In this case there was no such application of goods referred to in Article 2 of Royal for authorization. Decree No 1 — perhaps model, year and cubic capacity or horsepower of engine. The other matters required may well go beyond that — model of coachwork, chassis number and year of first registration and any equipment and accessories. Even though these are matters which may well be Nor do I think that the fact that a trader required for the registration of the car they can still prove (the onus being on him) that do not necessarily form part of an invoice the VAT is repayable in respect of a genuine for the purposes of a claim to exercise a transaction, even in the absence of an right to deduct input tax. invoice complying with national legislation, justifies taking an extended view of what may be required in an invoice. The invoice is the method of exercising the right to deduct without having to prove more; to The argument that different matters may be extend the requirements beyond what is required for different sectors of trade is reasonably necessary for verification and prima facie attractive but in the end I do not fiscal control seems to me to be putting on think that it is right; it is capable of leading the trader a greater burden than that which to an even greater fragmentation which the Article 17 of the Sixth Directive requires. Sixth Directive was seeking to avoid. The elements of 'an invoice' for the purpose of Article 17 of the Directive should be capable of being expressed generally.