(Reference for a preliminary ruling from the Regeringsrätten)

(VAT – Place of taxable transactions – Place of supply for tax purposes – Supplier of services established in a Member State other than that in which the customer is established – Status of taxable person – Services supplied to a national foundation carrying out both economic and non-economic activities)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover – Common system of value added tax – Supply of services – Determination of the point of reference for tax purposes

(Council Directives 77/388, Art. 9(2)(e) and 2006/112, Art. 56(1)(c))

Article 9(2)(e) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 1999/59, and Article 56(1)(c) of Directive 2006/112 on the common system of value added tax, which determine the place where services are deemed to be supplied for value added tax purposes for services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, must be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

That article does not specify whether it applies only if the taxable person receiving the supply of services uses those services for the purposes of his economic activity. Thus, unlike other provisions of the Sixth Directive, such as Articles 2(1) and 17(2), Article 9(2)(e) does not indicate that such a condition must be satisfied in order for it to apply.

In the absence of any express provision in Article 9(2)(e) of the Sixth Directive that the services supplied must be used for the purposes of the customer’s economic activity, it must be concluded that the fact that the customer uses those services for activities which fall outside the scope of the Sixth Directive does not preclude the application of that provision.

(see paras 28-33, operative part)

6 November 2008 (*)

(VAT – Place of taxable transactions – Place of supply for tax purposes – Service supplier established in a Member State other than that in which the customer is established – Status of taxable person – Services supplied to a national foundation carrying out both economic and non-economic activities)

In Case C‑291/07,

REFERENCE for a preliminary ruling under Article 234 EC from the Regeringsrätten (Sweden), by decision of 30 May 2007, received by the Court on 15 June 2007, in the proceedings

Skatteverket,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, M. Ilešič, A. Tizzano, A. Borg Barthet (Rapporteur) and E. Levits, Judges,

Advocate General: J. Mazák,

Registrar: R. Grass,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the Skatteverket, by M. Loeb, acting as Agent,

– the German Government, by M. Lumma and C. Blaschke, Agents,

– the Greek Government, by S. Spyropoulos and I. Bakopoulos, and by I. Pouli, Agents,

– the Italian Government, by I. M. Braguglia, Agent, and by G. de Bellis, avvocato dello Stato,

– the Polish Government, by T. Nowakowski, Agent,

– the Commission of the European Communities, by D. Triantafyllou and P. Dejmek, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 17 June 2008,

gives the following

This reference for a preliminary ruling concerns the interpretation of Article 9(2) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation 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), as amended by Council Directive 1999/59/EC of 17 June 1999 (OJ 1999 L 162, p. 63; ‘the Sixth Directive’), and of Article 56(1)(c) 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 reference has been made in proceedings between Kollektivavtalsstiftelsen TRR Trygghetsrådet (Restart – Council for redundancy support and advice; ‘TRR’), a Swedish foundation which carries out both economic and other activities, and the Skatteverket (Swedish local tax board), concerning the tax consequences of the supply of certain consultancy services which TRR wishes to obtain and whether TRR must be regarded as a trader within the meaning of Chapter 5, Paragraph 7, of Law 1994:200 on value added tax (mervärdesskattelagen (1994:200); ‘the ML’). The dispute relates to a period during which the Sixth Directive and Directive 2006/112 were successively applicable.

Legal context

Community legislation

Directive 2011/92

Recitals 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.

(9) 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.’

Article 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.’

Under 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)];

…’

Article 4 of Directive 2011/92 provides:

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

(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:

‘1. 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.

3. 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. 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

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) 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)]

…

(29) 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

Article 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.’

Article 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

By decision of 3 March 2006, the Skatterättsnämnden ruled that TRR’s activities under the omställningsavtalet do not constitute a supply of services in the course of a business activity, but that TRR is to be regarded as a trader for the purposes of Chapter 5, Paragraph 7, of the ML.

18TRR has appealed against the decision of the Skatterättsnämnden, claiming that the Regeringsrätten should declare that TRR is not a trader for the purposes of Chapter 5, Paragraph 7, of the ML. The Skatteverket contends that the Regeringsrätten should confirm the contested decision.

19In support of its action, TRR submits, inter alia, that registration as a taxable person for VAT purposes does not of itself mean that the registered party is always to be regarded as a trader for the purposes of Chapter 5, Paragraph 7, of the ML. When making purchases for activities which fall outside the scope of the Sixth Directive, it is not a trader for the purposes of that provision. TRR adds that the corresponding provision in the Sixth Directive – Article 9(2)(e) – does not refer to a trader but to a taxable person.

20The Regeringsrätten considers it necessary, for the purposes of applying certain provisions of the Sixth Directive and of Directive 2006/112 in the dispute before it, for the terms ‘taxable person’ and ‘person liable for payment of the tax’ to be interpreted in the light of Community law. The Regeringsrätten notes that the Court has interpreted the term ‘taxable person’, as used in the Sixth Directive, in many judgments, but that it has not yet given a ruling as to how that term is to be understood for the purposes of applying Article 9(2)(e) of the Sixth Directive in a specific situation, such as the circumstances of the case before the referring court.

21On the view that the relevant provisions of the Sixth Directive and of Directive 2006/112 are unclear and that the issue does not yet appear to have been referred to the Court, the Regeringsrätten has decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Are Article 9(2)(e) and [point (1)(b) of Article 21] of the Sixth … Directive and Articles 56(1)(c) and 196 of [Directive 2006/112] to be interpreted as meaning that a person who acquires consultancy services from a person liable to tax in another [Member State], [in cases where the former] carries out both an economic activity and also an activity which falls outside the scope of the directives, is to be regarded as a taxable person … where those articles are applied, even though the acquisition was made solely in respect of the latter activity?’

The question referred

22By its question, the referring court is essentially asking whether Article 9(2)(e) of the Sixth Directive and Article 56(1)(c) of Directive 2006/112 are to be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

23It should be borne in mind that the wording of Article 9(2)(e) of the Sixth Directive is, essentially, identical to that of Article 56(1)(c) of Directive 2006/112. It follows that those two provisions must be interpreted in the same way.

24It should also be borne in mind that Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for VAT purposes. Whereas Article 9(1) lays down a general rule in that regard, Article 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied. The object of those provisions is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non-taxation (see Case 168/84 Berkholz [1985] ECR 2251, paragraph 14; Case C‑327/94 Dudda [1996] ECR I‑4595, paragraph 20; Case C‑167/95 Linthorst, Pouwels en Scheres [1997] ECR I‑1195, paragraph 10; Case C‑452/03 RAL (Channel Islands) and Others [2005] ECR I‑3947, paragraph 23; and Case C‑114/05 Gillan Beach [2006] ECR I‑2427, paragraph 14).

25It is appropriate also to note that, as regards the relationship between paragraphs 1 and 2 of Article 9 of the Sixth Directive, the Court has held that Article 9(1) in no way takes precedence over Article 9(2). In every situation, the question which arises is whether that situation is covered by one of the instances mentioned in Article 9(2) of that directive. If not, it falls within the scope of Article 9(1) (Dudda, paragraph 21; Linthorst, Pouwels en Scheres, paragraph 11; RAL (Channel Islands) and Others, paragraph 24; and Gillan Beach, paragraph 15).

26Article 9(2)(e) of the Sixth Directive provides that the place where services of consultants and other similar services are supplied for taxable persons who are established in the Community, but not in the same country as the supplier, is the place where the customer has established his business.

27Although it is true that in the case before the referring court, the customer for the consultancy services is established within the Community but outside the country of the service supplier, the referring court asks nevertheless whether that customer must also be regarded as a taxable person for the purposes of Article 9 of the Sixth Directive where the services concerned are used only for activities which fall outside the scope of the Sixth Directive and that of Directive 2006/112.

28It should be noted at the outset that Article 9(2)(e) of the Sixth Directive does not specify whether it applies only if the taxable person receiving the supply of services uses those services for the purposes of his economic activity. Thus, unlike other provisions of the Sixth Directive, such as Articles 2(1) and 17(2), Article 9(2)(e) does not indicate that such a condition must be satisfied in order for it to apply.

29In other words, in the absence of any express provision in Article 9(2)(e) of the Sixth Directive that the services supplied must be used for the purposes of the customer’s economic activity, it must be concluded that the fact that the customer uses those services for activities which fall outside the scope of the Sixth Directive does not preclude the application of that provision.

30Such an interpretation is consistent with the objective pursued by Article 9 of the Sixth Directive, which – as was pointed out in paragraph 24 of the present judgment – is to lay down a conflict of laws rule to avoid the risk of double taxation or non-taxation.

31As the Advocate General observed in point 41 of his Opinion, that interpretation facilitates the implementation of that conflict of laws rule, in that it serves the interests of simplicity of administration – of the rules on the place of supply of services – as regards the rules governing the collection of taxes and the prevention of tax avoidance. The supplier of services need merely establish that the customer is a taxable person in order to ascertain whether the place of supply of services is in the Member State in which he, the supplier, is established or in the Member State in which the customer’s activities are based.

32Furthermore, that interpretation is in line with the objectives and operating rules of the Community VAT system since it ensures, in a situation such as that at issue in the main proceedings, that the ultimate consumer of the supply of services bears the final cost of the VAT payable.

33As the Advocate General observed in points 43 and 44 of his Opinion, such an interpretation is also consistent with the principle of legal certainty; furthermore, it enables the burden on traders operating across the internal market to be reduced and facilitates the free movement of services.

34Finally, it should be noted that point (1)(b) of Article 21 of the Sixth Directive (essentially reproduced in Article 196 of Directive 2006/112) provides that VAT is payable by persons to whom services covered by Article 9(2)(e) of the Sixth Directive (essentially reproduced in Article 56(1)(c) of Directive 2006/112) are supplied. Accordingly, if the conditions for the application of Article 9(2)(e) of the Sixth Directive are met, the purchaser is liable for VAT on the supply of services which he receives, whether or not they have been supplied for the purposes of activities which fall outside the scope of those directives.

35In the light of the foregoing considerations, the answer to the question referred by the Regeringsrätten must be that Article 9(2)(e) of the Sixth Directive and Article 56(1)(c) of Directive 2006/112 must be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

Costs

36Since 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 (First Chamber) hereby rules:

Article 9(2)(e) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 1999/59/EC of 17 June 1999, and Article 56(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

[Signatures]

*

Language of the case: Swedish.