European Court of Justice VAT cases 2006-3 - empcom.gov.in

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2. The United Kingdom of Great Britain and Northern Ireland is ordered to pay the costs. [2006] ECR I-1213 Case C-415/04 9 February 2006 Stichting Kinderopvang Enschede – Staatssecretaris van Financiën Article 13A(1)(g) and (h) of the Sixth Directive [...], read together with Article 13A(2)(b) thereof, must be interpreted as meaning that services as an intermediary between persons seeking, and persons offering, a childcare service, provided by a body governed by public law or an organisation recognised as charitable by the Member State concerned, may benefit from exemption under those provisions only where: – the childcare service itself meets the conditions for exemption laid down in those provisions; – that service is of such a nature or quality that parents could not be assured of obtaining a service of the same value without the assistance of an intermediary service such as that which is the subject-matter of the dispute in the main pro- 1) ceedings ; – the basic purpose of the intermediary services is not to obtain additional income for the service provider by carrying out transactions which are in direct competition with those of commercial enterprises liable for VAT. [2006] ECR I-1385 1) The Foundation was a non-profit-making organisation which provided childcare, at a variety of locations, for children under school age and for children of school age outside school hours. It also maintained a list of host parents who, after screening by the Foundation, looked after children in their own homes. Host parents could attend a training course paid for by the Foundation. For parents opting to have their child looked after by a host parent, the Foundation put them in touch with the host parents on its list who were most appropriate for the parents' needs. The Foundation then acted as intermediary in the conclusion of a written agreement between the parents and the host parents. If, after a period of time, one of the parties wished to discontinue the agreement or the terms of the agreement were breached, the parents of the child could again make use of the services of the Foundation. The Foundation did not accept any liability for damage arising from any breach of the agreement. Nor did it guarantee that the host parents would indeed be able to mind the child during the hours requested. Case C-255/02 21 February 2006 Halifax plc, Leeds Permanent Development Services Ltd, County Wide Property Investments Ltd – Commissioners of Customs & Excise 1. Transactions of the kind at issue in the main proceedings constitute supplies of goods or services and an economic activity within the meaning of Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) of the Sixth Directive [...], as amended by Directive 95/7/EC [...], provided that they satisfy the objective criteria on which those concepts are based, even if they are carried out with the sole aim of obtaining a tax advantage, without any other economic objective. 2. The Sixth Directive must be interpreted as precluding any right of a taxable person to deduct input VAT where the transactions from which that right derives constitute an abusive practice. For it to be found that an abusive practice exists, it is necessary, first, that the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of the Sixth Directive and of national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those 1) provisions . Second, it must also be apparent from a number of objective factors that the essential aim of the transactions 2) concerned is to obtain a tax advantage . 3. Where an abusive practice has been found to exist, the transactions involved must be redefined so as to re-establish the situation that would have prevailed in the absence of the transactions constituting that abusive practice. [2006] ECR I-1609 1) To allow taxable persons to deduct all input VAT even though, in the context of their normal commercial operations, no transactions conforming with the deduction rules of the Sixth Directive or of the national legislation transposing it would have enabled them to deduct such VAT, or would have allowed them to deduct only a part, would be contrary to the principle of fiscal neutrality and, therefore, contrary to the purpose of those rules. Judgments of the Court of Justice – 34 2) © 2006 IBFD As regards the second element, whereby the transactions concerned must essentially seek to obtain a tax advantage, it must be borne in mind that it is the responsibility of the national court to determine the real substance and significance of the transactions concerned. In so doing, it may take account of the purely artificial nature of those transactions and the links of a legal, economic and/or personal nature between the operators involved in the scheme for reduction of the tax burden. Case C-419/02 21 February 2006 BUPA Hospitals Ltd, Goldsborough Developments Ltd – Commissioners of Customs & Excise Prepayments of the kind at issue in the main proceedings whereby lump sums are paid for goods referred to in general terms in a list which may be altered at any time by agreement between the buyer and the seller and from which the buyer may possibly select articles, on the basis of an agreement which he may unilaterally resile from at any time, thereupon recovering the unused balance of the prepayments, do not fall within the scope of the second subparagraph of Article 10(2) of the Sixth Directive [...], as amended by Directive 95/7/EC [...]. [2006] ECR I-1685 Case C-223/03 21 February 2006 University of Huddersfield Higher Education Corporation – Commissioners of Customs & Excise Transactions of the kind at issue in the main proceedings constitute supplies of goods or services and an economic activity within the meaning of Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) of the Sixth Directive [...], as amended by Directive 95/7/EC [...], provided that they satisfy the objective criteria on which those concepts are based, even if they are carried out with the sole aim of obtaining a tax advantage, without any other economic objective. [2006] ECR I-1751 Case C-491/04 23 February 2006 Dollond & Aitchison Ltd – Commissioners of Customs & Excise 1. Article 29 of Council Regulation (EEC) No. 2913/92 of 12 October 1992 establishing the Community Customs Code must be interpreted as meaning that, in circumstances such 1) as those of the main proceedings , payment for the supply of specified services, such as examination, consultation or aftercare required in connection with contact lenses, and for specified goods, consisting of those lenses, the cleaning solutions and the soaking cases, constitutes as a whole the ‘transaction value' within the meaning of Article 29 of the 2) Customs Code and is, therefore, dutiable . 2. The principles laid down in the CCP judgment (Case C-349/96) of 25 February 1999 cannot be used directly to determine the elements of the transaction to be taken into account for the purposes of applying Article 29 of the Customs Code. [2006] ECR I-2129 1) D & A was a firm of opticians with branches throughout the United Kingdom. Until 1998, D & A operated a scheme under which customers collected their disposable contact lenses from a branch every three months. They were entitled to receive certain professional services and were required to undergo an annual eye check. From 1998, the disposable contact lenses were dispensed to UK customers by post from Scotland and, from July 1999, they were dispensed from Jersey (outside the EU VAT territory) by a company connected with D & A, in the form of a subscription. Subscribers paid a fixed monthly amount, for which they received a periodic supply of disposable lenses together with the solutions and soaking cases necessary for their care. In addition, the price covered an initial contact lens examination or consultation, a contact lens check at least once a year and any other aftercare relating to the use of the lenses. The services were rendered by D & A's branches. 2) Under Art. 11(B)(1) of the Sixth Directive, the import value of imported goods for VAT purposes is their customs value. Case C-114/05 9 March 2006 Gillan Beach Ltd – Ministre de l'Économie, des Finances et de l'Industrie The first indent of Article 9(2)(c) of the Sixth Directive [...] must be interpreted as meaning that an inclusive service provided by an organiser to exhibitors at a fair or in an exhibition hall falls
within the category of services referred to in that provision. [2006] ECR I-2427 Case C-210/04 23 March 2006 FCE Bank plc – Ministero dell'Economia e delle Finanze, Agenzia delle Entrate Articles 2(1) and 9(1) of the Sixth Directive [...], must be interpreted as meaning that a fixed establishment, which is not a legal entity distinct from the company of which it forms part, established in another Member State and to which the company supplies services, should not be treated as a taxable person by reason of the costs imputed to it in respect of those supplies. [2006] ECR I-2803 In this context, the ECJ noted that the OECD Convention is irrelevant since it concerns direct taxation whereas VAT is an indirect tax and that any agreement on the sharing of costs is also irrelevant since such an agreement was not negotiated between independent parties (Paragraphs 39-40). Case C-184/04 30 March 2006 Uudenkaupungin kaupunki 1. Article 20 of the Sixth Directive [...], must be interpreted as meaning that, subject to the provisions of Article 20(5) thereof, it requires Member States to make provision for adjustment of deductions of VAT on capital goods. 2. Article 20 of the Sixth Directive [...] must be interpreted as meaning that the adjustment provided for therein is also applicable where the capital goods were first used in non-taxable activity that was not eligible for deduction and were then used in activity, subject to VAT during the adjustment period. 3. The second subparagraph of Article 13(C) of the Sixth Directive [...] must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of VAT on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use. 4. Article 17(6) of the Sixth Directive [...] must be interpreted as meaning that a Member State which gives its taxable persons the right to opt for taxation of the letting of a property is not permitted by that provision to exclude deduction of VAT on immovable property investments made before that right of option is exercised, where the application to exercise that option has not been made within six months of the property being brought into use. [2006] ECR I-3039 Case C-245/04 6 April 2006 EMAG Handel Eder OHG – Finanzlandesdirektion für Kärnten 1. Where two successive supplies of the same goods, effected for consideration between taxable persons acting as such, gives rise to a single intra-Community dispatch or a single intra-Community transport of those goods, that dispatch or transport can be ascribed to only one of the two supplies, which alone will be exempted from tax under the first paragraph of Article 28c(A)(a) of the Sixth Directive […], as amended by Directive 95/7/EC […]. That interpretation holds good regardless of which taxable person – the first vendor, the intermediary acquiring the goods or the second person acquiring the goods – has the right to dispose of the goods during the dispatch or transport of the goods. 2. Only the place of the supply which gives rise to dispatch or intra-Community transport of goods is determined in accordance with Article 8(1)(a) of the Sixth Directive […], as amended; that place is deemed to be in the Member State of the departure of that dispatch or transport. The place of the other supply is determined in accordance with Article 8(1)(b) of that Directive; that place is deemed to be either in the Member State of departure or in the Member State of arrival of that dispatch or transport, according to whether that supply is the first or the second of the two successive supplies. [2006] ECR I-not yet officially published Judgments of the Court of Justice – 35 © 2006 IBFD Joined Cases C-443/04 and C-444/04 27 April 2006 H. A. Solleveld and J. E. van den Hout-van Eijnsbergen – Staatssecretaris van Financiën – Article 13(A)(1)(c) of the Sixth Directive [...] must be interpreted as meaning that it confers on the Member States the discretion to define the paramedical professions and the medical care coming within the scope of such professions for the purpose of the exemption laid down by that provision. However, the Member States must, in the exercise of that discretion, comply with the objective pursued by the said provision, which is to ensure that the exemption applies solely to services provided by persons with the required professional qualifications, and the principle of fiscal neutrality. – National legislation which excludes the profession of psychotherapist from the definition of the paramedical professions is contrary to the said objective and principle only to the extent that psychotherapeutic treatments would, if carried out by psychiatrists, psychologists or any other medical or paramedical profession, be exempt from VAT, whereas, carried out by psychotherapists, they can be regarded as being of equivalent quality having regard to the professional qualifications of the latter, a matter which it is for the referring court to determine. – National legislation which excludes certain specific medical care activities, such as treatments using disturbance field diagnostics, carried out by physiotherapists from the definition of that paramedical profession is contrary to the said objective and principle only to the extent that such treatments carried out in the context of the said activities would, if carried out by doctors or dentists, be exempt from VAT, whereas, carried out by physiotherapists, they can be regarded as being of equivalent quality having regard to the professional qualifications of the latter, a matter which it is for the referring court to determine. [2006] ECR I-not yet officially published Case C-169/04 4 May 2006 Abbey National plc and Inscape Investment Fund – Commissioners of Customs & Excise 1. The concept of ‘management' of special investment funds in Article 13(B)(d)(6) of the Sixth Directive [...] has its own independent meaning in Community law whose content the Member States may not alter. 2. Article 13(B)(d)(6) of the Sixth Directive [...] is to be interpreted as meaning that the concept of 'management of special investment funds' referred to in that provision covers the services performed by a third-party manager in respect of the 1) administrative management of the funds , if, viewed broadly, they form a distinct whole, and are specific to, and essential 2) for, the management of those funds . On the other hand, services corresponding to the functions of a depositary, such as those set out in Articles 7(1) and (3) and 14(1) and (3) of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collec- 3) tive investment in transferable securities (UCITS) , are not covered by that concept. [2006] ECR I-not yet officially published 1) The ECJ also declared that Article 13(B)(d)(6) of the Sixth Directive covers special investment funds, regardless of their legal form, i.e. undertakings for collective investment constituted under the law of contract ('funds') or trust law ('trusts'), and those constituted under statute (open-ended investment companies) (Paragraph 53). 2) It is for the national court to establish whether or not specific services meet those criteria. In this respect, the ECJ noted that mere material or technical supplies, such as the making available of a system of information technology, are not covered by Article 13(B)(d)(6) of the Sixth Directive (Paragraphs 71 and 73). 3) The functions of depositary of undertakings for collective investment do not fall under the management of those undertakings, but under the control and supervision of their activities, the aim being to ensure that they are managed in accordance with the law (Paragraph 65). Case C-384/04 11 May 2006 Federation of Technological Industries and Others – Commissioners of Customs & Excise, Attorney General 1. Article 21(3) of the Sixth Council Directive [...], as amended
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Page 15 and 16: proposed to construct are specifica
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Page 19 and 20: movable property for another purpos
Page 21 and 22: from the outset to remove the conse
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Page 25 and 26: and c. a customer purchases such an
Page 27 and 28: court the validity of provisions in
Page 29 and 30: not been adopted. [1998] ECR I-8153
Page 31 and 32: S they grant taxable persons establ
Page 33 and 34: Case T-36/00 7 February 2001 Sonia
Page 35 and 36: ply of goods' of the grant, transfe
Page 37 and 38: ules incompatible with that provisi
Page 39 and 40: the main proceedings and which sati
Page 41 and 42: ment of deductions made in respect
Page 43 and 44: person, and is thus entitled to mak
Page 45: chaser to use the customised softwa
Page 49 and 50: able to force majeure or to an acci
Page 51 and 52: Taxable persons Index of Topics - 1
Page 53 and 54: Place of supply Index of Topics - 3
Page 55 and 56: Tax rates Index of Topics - 5 (Arti
Page 57 and 58: Exemptions - Miscellaneous exemptio
Page 59 and 60: Refund of input tax Index of Topics
Page 61 and 62: Charges characterized as turnover t
Page 63 and 64: Preliminary Questions: Abbey Nation
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