Judgment_paragraph 42 · Metropol Treuhand WirtschaftsstreuhandgmbH v Finanzlandesdirektion für Steiermark and Michael Stadler v Finanzlandesdirektion für Vorarlberg (C-409/99)

42Second, according to the fundamental principle which underlies the VAT system and which follows from Article 2 of the First and Sixth Directives, VAT applies to each transaction by way of production or distribution after deduction has been made of the VAT which has been levied directly on transactions relating to inputs. It is settled case-law that the right of deduction provided for in Article 17 et seq. of the Sixth Directive is an integral part of the VAT scheme and in principle may not be limited. That right must be exercised immediately in respect of all the taxes charged on input transactions. Any limitation on the right to deduct VAT affects the level of the tax burden and must be applied in a similar manner in all the Member States. Consequently, derogations are permitted only in the cases expressly provided for in the Sixth Directive (see, inter alia, Joined Cases C-177/99 and C-181/99 Ampafrance and Sanofi [2000] ECR I-7013, paragraph 34 and the case-law cited therein).