ECJ preliminary ruling – EU law does not preclude VAT debts from being declared irrecoverable under national legislation
On 16 March 2017, the European Court of Justice (ECJ) has ruled that “EU law, in particular Article 4(3) TEU and Articles 2 and 22 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, and the rules on State aid, must be interpreted to the effect that it does not preclude value added tax debts from being declared irrecoverable under national legislation, such as that at issue in the main proceedings, providing for a bankruptcy discharge procedure by means of which a court may, under certain conditions, declare irrecoverable the debts of a natural person which have not been settled by the close of the bankruptcy proceedings initiated against that person.“
The Italian Corte suprema di cassazione (Supreme Court of Cassation) decided to stay the proceedings between the Agenzia delle Entrate (the Revenue Authority) and Mr. Marco Identi concerning a tax assessment in relation to value added tax (VAT) and regional tax on productive activities for the fiscal year 2003 and addressed a request for a preliminary ruling.
The request concerns the interpretation of Article 4(3) TEU and Articles 2 and 22 of 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 VAT: uniform basis of assessment (OJ 1977 L 145, p. 1; “the Sixth Directive”), respectively whether “Article 4(3) TEU and Articles 2 and 22 of the Sixth Directive must be interpreted as precluding the application, in relation to VAT, of a provision of national law which provides for the extinguishment of debts arising from VAT in favour of taxable persons admitted to the bankruptcy discharge procedure governed by Articles 142 and 143 of the Italian Law on insolvency and bankruptcy?“
The text of the decision (C-493/15) is available here: http://curia.europa.eu/juris/document/document.jsf?text=&docid=188966&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=625342