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Supreme Court, on appeal from High Court (following case stated from the Circuit Court on a appeal from the Appeal Commissioners) refers questions to the Court of Justice of the European Union concerning, inter alia: (a) whether the principle of abuse of rights as applicable in the sphere of value added tax (VAT) was directly effective against an individual in the absence of a national measure giving effect to the principle as it applied to certain property transactions; (b) if it was directly effective, whether it was sufficiently clear to be applied to the appellants' property transactions - completed before another relevant judgment - having regard to the principles of legal certainty and the protection of the appellants' legitimate expectations; and (c) whether the appellants were engaged in an abuse of rights contrary to the recognised principles.
Judgment of the Court: Reference for preliminary ruling - interpretation of EC Council Directive 77/388 of 17 May, 1977 - harmonisation of laws of Member States relating to turnover taxes - common system of Value Added Tax: uniform basis of assessment, as amended by Council Directive 95/7 of 10 April, 1995 (OJ05. 05.1995 L102p18) (the Sixth Directive - reference made by taxpayers against Inspector of Taxes (Revenue Commissioners) - assessments raised in 2004 concerning VAT between 2002 and 2004 - transactions concerning properties - whether transactions constituted an abusive practice - creation of long lease and short lease for purpose of reduction of VAT liability - mutual surrender of leases - provisions of sixth directive - tangible property - Article 5(3 - “certain interest in immovable property” - exemption from VAT in relation to certain activities including “the supply of buildings or parts thereof, and of the land on which they stand, other than as described in Article 4(3)(a)” - national administrative and judicial processes - case stated to High Court by Circuit Court following appeal from Appeal Commissioners - assessments upheld by High Court - appeal to Supreme Court - derogation by Ireland - Article 27(5) of the Sixth Directive - principle of abuse of rights.
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