ECJ’s Decision, of March 26th, 2015. Marian Macikowski. Principles of proportionality and fiscal neutrality of VAT


Through this decision the Court does emphasize the importance for the VAT system of two of the principles governing its regulation, such as proportionality and neutrality.

In this case it is questioned whether the local VAT regulation in Poland is contrary to the European Directive concerning the tax obligation for the assessment and collection of VAT, by creating the subject obliged to pay the VAT. In this regard, although the Court concludes that the local regulation is not contrary to the Directive, it remembers that it is essential that measures taken by Member States to prevent tax fraud always respect the principle of proportionality and neutrality of VAT.

The main dispute is over a public officer who, at the request of creditors, initiated an enforcement proceedings against a real estate property belonging to a company subject to VAT, and who seized the property through public auction. To the extent that the Polish VAT Law provides for the subject required to pay the VAT for public officers involved in the execution of a building, with a view to preventing tax evasion, the latter made the distribution of the quantities related to the transaction in order to fulfill its obligation. However, he settled and paid the VAT in September 2009, after the final distribution of the amounts among the creditors, instead of when the sale took place in 2007. The Polish Government did considerer that he had to pay the VAT in 2007, on behalf of the company that transferred the property.

It is questioned the national rule as regard to the subject obliged to pay the VAT, other than the taxable person, but the Court considers that the EU Directive gives leeway to Member States to set up the necessary measures in order to guarantee the collection of VAT, but recalling that in no case may go against the principle of neutrality of VAT. That is why the subject responsible for the payment does not substitute the powers and obligations of the taxpayer, and is limited to ensuring that the VAT is paid.

Accordingly, the Court also considers that the subject obliged to pay the VAT must respond with their properties for the VAT in the case not to proceed to pay the tax, but in any case, referring to the principle of proportionality, the Court recalls that Member States shall ensure that such obligation can be met by the person according to the legal means at his disposal to comply with.

In summary, the Court considers that the VAT Directive provides the necessary legal resources for Member States to establish the measures they deem appropriate to ensure the collection of VAT, but in any case these measures may not result in a break of tax neutrality nor be disproportionate.

A copy of the judgment C-499/13 is attached.

Click here if you want more information about our VAT services or you can contact us at

ECJ VAT principles of neutrality and proporcionality

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text. captcha txt
Logotipo de Diligens Tax ConsultingLogotipo de Diligens Tax Consulting