23.2.2008

EN

Official Journal of the European Union

C 51/36

(Case C-554/07)

(2008/C 51/59)

Language of the case: English

Parties

Applicant: Commission of the European Communities (represented by: R. Lyal and M. Afonso, Agents)

Defendant: Ireland

The applicant claims that the Court should:

—declare that by failing to transpose correctly into Irish legislation Article 13 of Directive 2006/112 (including Annex I to the directive) and consequently by excluding from the scope of the tax all economic activities in which the State, local authorities and other bodies governed by public law engage, with certain limited exceptions, Ireland has failed to comply with its obligations under Articles 2, 9 and 13 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (1);

—order Ireland to pay the costs.

Pleas in law and main arguments

In Ireland, the State and local authorities are treated as taxable persons only in so far as a specific order to that effect has been made by the Minister for Finance. In the Commission's view that situation is contrary to the scheme laid down in Article 13 of the VAT directive in several respects. First, no provision is made for the taxation of public bodies where they act other than in their capacity as public authorities. Secondly, no general provision is made for the taxation of public bodies where they act in their capacity as public authorities but engage in an economic activity whose non-taxation would result in a significant distortion of competition. The taxation of public bodies is wholly at the discretion of the Minister for Finance; no criteria for his decision are contained in the relevant provisions. Thirdly, no provision is made for taxation of the activities listed in Annex I to the VAT directive.

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(1) OJ L 347, p. 1.