29.9.2012

Official Journal of the European Union

C 295/13

(Case C-263/11) (<span class="super">1</span>)

(Sixth VAT Directive - Directive 2006/112/EC - Concept of ‘economic activity’ - Supplies of timber in order to alleviate the damage caused by a storm - Reverse charge procedure - Failure to register in the register of taxable persons - Fine - Principle of proportionality)

2012/C 295/21

Language of the case: Latvian

Referring court

Parties to the main proceedings

Applicant: Ainārs Rēdlihs

Defendant: Valsts ieņēmumu dienests

Re:

Reference for a preliminary ruling — Augstākās tiesas Senāts — Interpretation of Article 4 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1) and Article 9 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) — Concepts of ‘taxable person’ and ‘economic activity’ — Supplies of timber made by an individual, the owner of a forest intended for his personal use, in order to alleviate the damage caused by a storm — Compliance with the principle of proportionality of a national measure penalising, by a fine fixed at the level of the amount of tax normally payable for the value of the goods supplied, the failure to register in the register of taxable persons for VAT purposes, whereas the person concerned was not liable for the tax, even if he had registered in that register

Operative part of the judgment

Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2006/138/EC of 19 December 2006, must be interpreted as meaning that supplies of timber made by a natural person for the purpose of alleviating the consequences of a case of force majeure come within the scope of the exploitation of tangible property, which must be regarded as an ‘economic activity’ within the meaning of that provision, where those supplies are carried out for the purposes of obtaining income therefrom on a continuing basis. It is for the national court to carry out an assessment of all the circumstances of the case in order to determine whether the exploitation of tangible property, such as a forest, is carried out for the purposes of obtaining income therefrom on a continuing basis.

European Union law must be interpreted as meaning that it is possible that a rule of national law allowing a fine to be imposed, fixed at the level of the rate of VAT normally applicable for the value of the goods transferred in the supplies made, on an individual who has failed to fulfil his obligation to register in the register of taxable persons for VAT purposes and who was not liable for that tax, may be contrary to the principle of proportionality. It is for the national court to determine whether the amount of the penalty does not go further than is necessary to attain the objectives of ensuring the correct levying and collection of the tax and preventing fraud, having regard to the facts of the case and, inter alia, the sum actually imposed and the possible existence of fraud or circumvention of the applicable legislation attributable to the taxable person whose failure to register is being penalised.

(<span class="super">1</span>) OJ C 226, 30.7.2011.