24.1.2009

Official Journal of the European Union

C 19/17

(Case C-492/08)

(2009/C 19/30)

Language of the case: French

Parties

Applicant: Commission of the European Communities (represented by: M. Afonso, acting as Agent)

Defendant: French Republic

Form of order sought

—Declare that by applying a reduced rate of value added tax (VAT) to services provided by lawyers, lawyers at the Council of State and at the Court of Cassation and avoués, for which they are paid in part or in whole by the State through legal aid, France has failed to fulfil its obligations under Articles 96 and 98(2) of the VAT directive (1);

—order the French Republic to pay the costs.

Pleas in law and main arguments

The Commission disputes the application, by the defendant, of a reduced rate of VAT for services provided in the context of legal aid by lawyers, lawyers at the Council of State and at the Court of Cassation as well as avoués, as such services are not included in any of the categories listed in Annex III of Directive 2006/112/EC.

In order to respond to the defendant's three main arguments, the Commission submits first that the guarantee of access to justice cannot be an appropriate reason for derogating from the normal rate of VAT on the services of lawyers to the extent that that guarantee is connected more to the range of aid granted by the State than to the rate of VAT, which is determined in a uniform manner at Community level.

Secondly, according to the applicant, the social nature of the activities at issue is not sufficient for them to be included in the other categories of services listed in Annex III of the directive, for which a reduction in the rate of VAT is allowed as compared to the normal applicable rate. According to the Court's settled case-law, a narrow interpretation of the nature of those services would be necessary so as to maintain the restrictive nature of that annex.

Finally, the Commission states that the aim both of Articles 96 and 98(2) of the VAT directive and of Annex III thereof is not to avoid distortions of competition between economic operators providing the same goods or services, but more simply to encourage a progressive harmonisation of the legislation of the Member States, by harmonising the rates of VAT applied and limiting the transactions which can be subject to reduced rates.

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