(Case C-274/15)

Language of the case: French

Parties

Applicant: European Commission (represented by: F. Dintilhac and C. Soulay, acting as Agents)

Defendant: Grand Duchy of Luxembourg

Form of order sought

—declare that in laying down the VAT regime applicable to independent groups of persons, as defined in Article 44(1)(y) of the Law of 12 February 1979 on VAT, in Articles 1 to 4 of the Grand-Ducal Order of 21 January 2004 on the exemption from VAT of supplies of services to their members by independent groups of persons, in Administrative Circular No 707 of 29 January 2004 in so far as it comments on Articles 1 to 4 of the Grand-Ducal Order, and in the Note of 18 December 2008 by the working group within the Comité d'Observation des Marchés (Cobma; the Financial Market Observation Committee) with agreement from l'Administration de l'Enregistrement et des Domaines (the Registration and Land Authority), the Grand Duchy of Luxembourg has failed to fulfil its obligations under the VAT Directive (1), and, specifically, under Article 2(1)(c), Article 132(1)(f), the second subparagraph of Article 1(2), Article 168(a), Article 178(a), Article 14(2)(c) and Article 28 of that directive;

—order the Grand Duchy of Luxembourg to pay the costs.

Pleas in law and main arguments

Article 132(1)(f) of the VAT Directive stipulates that Member States are to exempt from VAT ‘the supply of services by independent groups of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons, for the purpose of rendering their members the services directly necessary for the exercise of that activity, where those groups merely claim from their members exact reimbursement of their share of the joint expenses, provided that such exemption is not likely to cause distortion of competition’.

However, according to the Commission, the legislation applicable in Luxembourg does not restrict the VAT exemption only to services provided by an independent group of persons and directly necessary for activities undertaken by its members which are not liable to VAT or are exempt.

Further, the Commission submits that under Luxembourg law, the members of an independent group of persons whose turnover partly derives from taxable activities may deduct the VAT invoiced to the independent group of persons for its purchases of goods or services from a third party from the VAT which they themselves are liable to pay; whereas under Article 168 of the VAT Directive, the right to deduct input VAT is granted only to a taxable person who acquires the goods or services subject to VAT and uses them for the direct purposes of his taxed transactions.

Lastly, the Commission maintains that Article 14(2)(c) and Article 28 of the VAT Directive preclude the national legislation in so far as it provides that, where a member of an independent group of persons acquires goods and services from a third party in his own name, but on behalf of the group, the transaction by which that member assigns such expenditure to the group falls outside the scope of VAT.

(1) Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).