19 December 2019 (*1)

(Reference for a preliminary ruling — Taxation — Common system of value added tax — Directive 2006/112/EC — Taxable transactions — Deduction of input tax — Purchase of immovable property not registered in the national land register — First-registration costs incurred by the purchaser — Recourse to specialist third companies — Participation in a supply of services or investment expenditure carried out for the purposes of an undertaking)

In Case C‑707/18,

REQUEST for a preliminary ruling under Article 267 TFEU from Tribunalul Timiş (Timiș Regional Court, Romania), made by decision of 30 October 2018, received at the Court on 13 November 2018, in the proceedings

Direcţia Generală Regională a Finanţelor Publice Timişoara,

Administraţia Judeţeană a Finanţelor Publice Timiş,

THE COURT (Eighth Chamber),

composed of L.S. Rossi, President of the Chamber, J. Malenovský (Rapporteur) and N. Wahl, Judges,

Advocate General: G. Hogan,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–the Romanian Government, by C.-R. Canţăr, R.I. Haţieganu and L. Liţu, acting as Agents,

–the European Commission, by L. Lozano Palacios and A. Biolan, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

1This request for a preliminary ruling concerns the interpretation of Articles 24, 28, 167 and 168 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1, ‘the VAT Directive’).

2The request has been made in proceedings between, of the one part, Amărăşti Land Investment SRL and, of the other, the Direcţia Generală Regională a Finanţelor Publice Timişoara (Regional Directorate-General of Public Finances of Timișoara, Romania) and the Administrația Județeană a Finanțelor Publice Timiș (Departmental Administration for Public Finances of Timiș, Romania), concerning the right to reimbursement of the value added tax (VAT) on transactions by which Amărăşti Land Investment carried out, at its own expense, the necessary steps for the first registration in the national land register (‘the Land Register’) of the land which it intended to purchase.

Legal context

EU law

Directive 2011/92

3Recitals 7 to 9 of Directive 2011/92 state:

(7)‘Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8)Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.’

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Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

4Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

5Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

6Article 4 of Directive 2011/92 provides:

‘Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

Subject to Article 2(4), for projects listed in Annex II, Member States shall determine whether the project shall be made subject to an assessment in accordance with Articles 5 to 10. Member States shall make that determination through:

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

A description of the aspects of the environment likely to be significantly affected by the project.

A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

4

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JUDGMENT OF 6. 3. 2025 – CASE C-41/24 WALTHAM ABBEY RESIDENTS ASSOCIATION

The criteria of Annex III shall be taken into account, where relevant, when compiling the information in accordance with points 1 to 3.’

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

9Recitals 11 and 29 of Directive 2014/52 state:

‘The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

10Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

11Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

‘Except in such other cases as are provided for by law, agreements which transfer or create real rights that are to be registered in the Land Register shall be concluded by authentic instrument, failing which they shall be null and void.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

15Amărăşti Land Investment was established in 2014 for the purposes of carrying out agricultural activities, and purchased land to that end.

16That land was purchased by means of a two-stage process. First, a bilateral promise to sell was concluded between the person promising to sell land (‘the promissory vendor’) and Amărăşti Land Investment, whereby the latter acquired a claim to ownership to that land. Secondly, upon completion of the administrative formalities provided for by law for concluding the contact, that contract was signed by the parties concerned.

17In that regard, the referring court states that Romanian law requires contracts for the sale of immovable property, such as the land at issue in the main proceedings, to take the form of authentic instruments and that, in order for those contracts to be validly concluded by authentic instrument, the land concerned must be registered in the Land Register and the vendor recorded there as the proprietor of the land, which was not the case of the land at issue in the main proceedings.

18In the context of its investments in land, and in order to complete the required administrative formalities before concluding the contract for the sale of that land, Amărăşti Land Investment availed itself, at its own expense, of the services provided by third parties, such as lawyers, notaries and companies providing specialist land-registration and topographic services. In particular, it availed itself of the services of a land-registration company for the purposes of the first registration of the land in the Land Register.

19The promises to sell the land concerned included a clause whereby the promissory vendor agreed that Amărăşti Land Investment may carry out at its own expense all the work of gathering documentation, preparing files and authenticating and registering documents, and all the work relating to the Land Register and to the registration of the land in that register. In addition, the promissory vendor stated that it understood that all the registration procedures carried out by Amărăști Land Investment were absolutely necessary in order for the contract of sale to be able to be concluded by authentic instrument.

20The costs linked to the first registration of that land in the Land Register, which the parties to the contract valued by common accord at EUR 750 per hectare, were not re-invoiced to the vendor. The promises to sell stated, in addition, that Amărăşti Land Investment was to pay the vendor, at the time they were concluded, the full price of the land, which did not include the value of the land-registration operations.

21Those promises to sell included moreover a clause whereby the vendor was required to pay Amărăşti Land Investment the costs incurred to register the land concerned in the Land Register and damages in the amount of EUR 2000 per hectare if it failed to fulfil its obligation to conclude the contract of sale within the prescribed period, either through its own fault or for any other reason except for reasons attributable to Amărăşti Land Investment.

22Following the purchase of the land, Amărăşti Land Investment submitted, on 23 January 2017, a request for the reimbursement of VAT in the sum of 73828 Romanian lei (RON) (approximately EUR 15456), which was accepted by the tax authorities.

23However, those authorities subsequently issued an additional VAT assessment of 41911 RON (approximately EUR 8772), on the ground that the sum of EUR 750 per hectare referred to in paragraph 20 above represented the value of the service, supplied by Amărăşti Land Investment to the vendors, relating to the registration of the land concerned and the conclusion of the contracts of sale by authentic instrument in return for the supply of that land. Those authorities stated, in that regard, that in return for that land, Amărăşti Land Investment had, first, paid a price and, secondly, supplied a service to the vendors, the cost of which had necessarily to be borne by them.

24Amărăşti Land Investment challenged the tax assessment notice concerning the additional VAT that it was required to pay, but its appeal was dismissed by the tax authorities on the ground that Amărăşti Land Investment had supplied the services at issue in its own name, but on behalf of the vendors, without, however, invoicing their value to the beneficiaries or collecting the relevant VAT.

25Before the referring court, Amărăşti Land Investment submits that the costs incurred by it valued at EUR 750 per hectare are investment-related costs incurred for the purposes of carrying out taxable transactions, for which it is entitled to deduct VAT.

26It further submits that the amount of the costs related to the registration of the land at issue in the main proceedings in the Land Register was fixed at EUR 750 per hectare, in order to make it easier to evaluate the damage which could have been caused to it if the vendors had not fulfilled their obligation to conclude the contracts of sale for the land by authentic instrument. Amărăşti Land Investment states that, in practice, that amount, which varied from one transaction to another, could be greater or less than EUR 750.

Since it considered that the case before it requires an interpretation of the provisions of EU law, Tribunalul Timiş (Timiș Regional Court, Romania) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

(1)Is [the VAT Directive], and in particular Articles 24, 28, 167 and 168(a) thereof, to be interpreted as meaning that, in the context of a transaction for the sale of immovable property which is not included in the [national register of immovable property] (Land Register) and which is not registered at the time of the supply, the purchaser, who is a taxable person and who assumes a contractual obligation to carry out, at his or her own expense, the necessary steps for its first registration in the Land Register, carries out a supply of services to the vendor, or instead a purchase of services relating to his or her investment in immovable property in respect of which he or she is entitled to deduct VAT?

(2)Is [the VAT Directive, and in particular Articles 167 and 168(a) thereof, to be interpreted as meaning that the costs incurred by a purchaser, who is a taxable person, in connection with the first registration in the Land Register of property in respect of which the purchaser has a claim for the future transfer of ownership and which has been supplied to him by a vendor whose ownership of the property is not recorded in the Land Register, can be classified as pre-investment operations in respect of which the taxable person is entitled to deduct VAT?

(3)Is [the VAT Directive], and in particular Articles 24, 28, 167 and 168(a) thereof, to be interpreted as meaning that the costs incurred by the purchaser, who is a taxable person, in connection with the first registration in the Land Register of property which has been supplied to him or her and in respect of which the purchaser has a contractual claim for the future transfer of ownership from a vendor whose ownership of the property is not recorded in the register of immovable property, are to be classified as the provision of services to the vendor in a context in which the purchaser and the vendor have agreed that the price of the immovable property does not include the value of the land-registration operations?

(4)For the purposes of [the VAT Directive], must the costs of administrative operations relating to immovable property which has been supplied in respect of which the purchaser has a claim for the future transfer of ownership from the vendor, including, but not limited to the costs of first registration in the Land Register, necessarily be borne by the vendor, or may such costs be borne, pursuant to an agreement between the parties, by the purchaser or by any other of the parties to the transaction, with the result that that person is entitled to deduct the VAT?

Consideration of the questions referred

The fourth question

By its fourth question, which must be answered first of all, the referring court asks, in essence, whether the VAT Directive must be interpreted as precluding the parties to a transaction, the aim of which is to transfer the ownership of immovable property, from agreeing that the future purchaser (‘the purchaser’) will incur some or all of the costs of the administrative formalities relating to that transaction — in particular those connected with the first registration of that property in the Land Register — and as thereby precluding the purchaser from being entitled to deduct VAT.

In that regard, the Court notes that the VAT Directive does not include any provision restricting the freedom generally available to the parties to a property sale transaction, such as that at issue in the main proceedings, to determine by contract which of them will incur the cost of the administrative formalities linked to that transaction.

In addition, it must be found that, as is apparent from the order for reference, the national legislation at issue in the main proceedings requires immovable property which is to be sold to be registered in the Land Register and the person who is the vendor to be recorded there as the proprietor, failing which the contract of sale will be void.

31However, the first registration of that property in the Land Register and the entry of the proprietor’s name therein are not within the freedom of contract of the parties to a property sale, since they reflect a statutory obligation on the vendor.

32Consequently, the insertion of a contractual clause, such as that at issue in the main proceedings, intended to make the purchaser liable for the costs linked to the first registration of the property in question in the Land Register and to the entry of the proprietor’s name there cannot derogate from the statutory nature of the obligation, incumbent upon the future vendor (‘the vendor’), which gives rise to such costs, nor replace that obligation.

33Consequently, the mere presence of such a clause in a bilateral promise for the sale of immovable property is not determinative in order to ascertain whether the purchaser is entitled to deduct the VAT relating to the payment of the costs arising from the first registration of the immovable property concerned in the Land Register.

In the light of all the foregoing considerations, the answer to the fourth question is that the VAT Directive must be interpreted as not precluding the parties to a transaction, the aim of which is to transfer the ownership of immovable property, from agreeing a clause according to which the purchaser will incur some or all of the costs of the administrative formalities relating to that transaction, in particular those connected with the first registration of that property in the Land Register. However, the mere presence of such a clause in a bilateral promise for the sale of immovable property is not determinative in order to ascertain whether the purchaser is entitled to deduct the VAT relating to the payment of the costs arising from the first registration of the property concerned in the Land Register.

The first and third questions

35By its first and third questions, which must be examined together in the second place, the referring court asks, in essence, whether the VAT Directive, and in particular Article 28 thereof, must be understood as meaning that, in the context of a bilateral promise for the sale of immovable property not registered in the Land Register, the purchaser — a taxable person — who, as he or she contractually undertook to do with regard to the vendor in that promise, carries out the necessary steps for the first registration of the immovable property concerned in that register by having recourse to the services provided by third parties who are taxable persons, is deemed to have supplied the services in question himself or herself to the vendor, within the meaning of Article 28 of that directive, even though the parties to the contract agreed that the sale price of that property does not include the value of the land-registration operations.

36In that regard, the Court points out that Article 28 of the VAT Directive provides that where a taxable person acting in his or her own name but on behalf of another person takes part in a supply of services, he or she is to be deemed to have received and supplied those services himself or herself.

Accordingly, that provision creates the legal fiction of two identical supplies of services provided consecutively, with the operator, who takes part in the supply of services and who constitutes the commission agent, being considered to have, first, received the services in question from specialist providers before providing, secondly, those services to the operator on behalf of whom it acts (judgment of 4 May 2017, Commission v Luxembourg, C‑274/15, EU:C:2017:333, paragraph 86).

In the light of the foregoing, and since Article 28 of Directive 2006/112 comes under Title IV of that directive, entitled ‘Taxable transactions’, it must be found that if the supply of services in which an operator takes part is subject to VAT, the legal relationship between that operator and the operator on behalf of whom it acts must also be subject to VAT (see, to that effect, judgment of 4 May 2017, Commission v Luxembourg, C‑274/15, EU:C:2017:333, paragraph 87).

39First, in the case in the main proceedings, it is not in dispute that, when it concluded a contract with third parties, who are taxable persons, with a view to carrying out the necessary steps for the first registration of the immovable property concerned in the Land Register, Amărăşti Land Investment acted in its own name.

40As regards, secondly, whether, in that context, Amărăşti Land Investment acted on behalf of the vendor of that property, it must be borne in mind that, as is apparent from paragraph 31 above, the obligation to effect the first registration of property in the Land Register reflects a statutory obligation incumbent upon the vendor, who must also be entered in that register as the proprietor of that property.

41It follows that, if, under a contract concluded with the vendor of the property, the purchaser carries out, at his or her own expense, the necessary steps for the first registration of that property in the Land Register and the entry of the proprietor therein, in order to comply with a statutory obligation of that proprietor, those steps must be deemed to have been carried out on behalf of another person, within the meaning of Article 28 of the VAT Directive.

42In the third place, given that the wording of Article 28 of the VAT Directive does not lay down any condition concerning whether the participation in the supply of services should be for consideration, the fact that the costs linked to the first registration of the property concerned in the Land Register were not re-invoiced to the vendor by the purchaser, so that the value of the land-registration operations was not included in the sale price of that property, is irrelevant for the purposes of applying Article 28 of that directive.

In the light of the foregoing considerations, the answer to the first and third questions is that the VAT Directive, and in particular Article 28 thereof, must be interpreted as meaning that, in the context of a bilateral promise for the sale of immovable property not registered in the Land Register, the purchaser — a taxable person — who, as he or she contractually undertook to do with regard to the vendor in that promise, carries out the necessary steps for the first registration of the property concerned in that register by having recourse to the services provided by third parties who are taxable persons, is deemed to have supplied the services in question himself or herself to the vendor, within the meaning of Article 28, even though the parties to the contract agreed that the sale price of that property does not include the value of the land-registration operations.

The second question

44By its second question, the referring court asks, in essence, whether the VAT Directive, and in particular Articles 167 and 168(a) thereof, must be understood as meaning that the costs incurred by an undertaking established in order to carry out agricultural activities, which avails itself of the services of third parties who are taxable persons, for the purposes of the first registration in the Land Registry of the land which it purchases, are capable of being characterised as investment costs for the purposes of the economic activity which it intends to begin carrying out.

45As may be seen from the request for a preliminary ruling and from the actual wording of the first question, it is apparent that the second question has been referred should the purchaser, who is a taxable person, not be deemed to have supplied the services in question himself or herself to the vendor, within the meaning of Article 28 of the VAT Directive.

46Since the Court has held, in its answer to the first and third questions, that a purchaser such as the applicant in the main proceedings is deemed to have supplied the services in question itself to the vendor, within the meaning of Article 28 of the VAT Directive, there is no need to answer the second question.

47Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Eighth Chamber) hereby rules:

1.Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as not precluding the parties to a transaction, the aim of which is to transfer the ownership of immovable property, from agreeing a clause according to which the future purchaser will incur some or all of the costs of the administrative formalities relating to that transaction, in particular those connected with the first registration of that property in the national land register. However, the mere presence of such a clause in a bilateral promise for the sale of immovable property is not determinative in order to ascertain whether the future purchaser is entitled to deduct the value added tax relating to the payment of the costs arising from the first registration of the property concerned in the national land register.

2.Directive 2006/112, and in particular Article 28 thereof, must be interpreted as meaning that, in the context of a bilateral promise for the sale of immovable property not registered in the national land register, the future purchaser — a taxable person — who, as he or she contractually undertook to do with regard to the future vendor in that promise, carries out the necessary steps for the first registration of the property concerned in that register by having recourse to the services provided by third parties who are taxable persons, is deemed to have supplied the services in question himself or herself to the future vendor, within the meaning of Article 28, even though the parties to the contract agreed that the sale price of that property does not include the value of the land-registration operations.

[Signatures]

*1 Language of the case: Romanian.