Judgment
Case C-284/11
Decision:
"On those grounds, the Court (Second Chamber) hereby rules:
1. The first paragraph of Article 179, Article 180 and Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that they do not preclude a limitation period for the exercise of the right to deduct, such as that at issue in the main proceedings, to the extent that it does not render the exercise of that right excessively difficult or impossible in practice. It is for the national court to carry out such an assessment and it may take into account, inter alia, a subsequent considerable extension of the limitation period and the duration of a value added tax registration procedure which had to be completed within that same period for it to be possible to exercise that right to deduct.
2. The principle of fiscal neutrality precludes a penalty consisting in a refusal of the right to deduct if VAT is accounted for belatedly, but does not preclude the payment of default interest, provided that that penalty complies with the principle of proportionality, which it is for the national court to determine."
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