(Reference for a preliminary ruling from the Hoge Raad der Nederlanden)

(Sixth VAT Directive – Exemptions – Article 13A(1)(i) and (2) – Teaching staff employed by one educational establishment made available, for consideration, to another)

Opinion of Advocate General Sharpston delivered on 8 March 2007

Judgment of the Court (Third Chamber), 14 June 2007

Summary of the Judgment

(Council Directive 77/388, Art. 13A(1)(i))

(Council Directive 77/388, Art. 13A(1)(i) and (2))

1.Article 13A(1)(i) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is to be interpreted as meaning that the expression ‘children’s or young people’s education, school or university education, vocational training or retraining’ does not cover the making available, for consideration, of a teacher to an educational establishment, within the meaning of that provision, in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, even if the body which makes the teacher available is itself a body governed by public law that has an educational aim, or another organisation defined by the Member State concerned as having similar objects.

It is true that the transfer of knowledge and skills between a teacher and students is a particularly important element of educational activity. However, the fact that such a transfer is taking place is not, by itself, sufficient for the mere supply of a teacher to an educational establishment, for the purpose of carrying out teaching duties under the responsibility of that establishment, to be described as educational activity. The educational activity referred to in Article 13A(1)(i) of the Sixth Directive consists of a combination of elements which include, along with those relating to the teacher/student relationship, also those which make up the organisational framework of the establishment concerned.

(see paras 18-20, 24, operative part 1)

2.Article 13A(1)(i) of the Sixth Directive, read in conjunction with Article 13A(2) of that directive, is to be interpreted as meaning that the making available, for consideration, of a teacher to an educational establishment in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, may constitute a transaction that is exempt from VAT on the basis that it is a supply of services ‘closely related’ to education, within the meaning of Article 13A(1)(i), if such a teacher placement is a means of better enjoying the education deemed to be the principal service, provided, however, – which it is for the national court to verify:

– both that principal service and the placement which is closely related to it are provided by bodies referred to in Article 13A(1)(i), taking into account, where appropriate, any conditions which may have been introduced by the Member State concerned pursuant to Article 13A(2)(a);

– that placement is of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishment and, consequently, the education from which its students benefit, would have an equivalent value; and

– the basic purpose of such a placement is not to obtain additional income by carrying out a transaction which is in direct competition with commercial enterprises liable for VAT.

(see para. 46, operative part 2)

14 June 2007 (*)

(Sixth VAT Directive – Exemptions – Article 13A(1)(i) and 13A(2) – Teaching staff employed by one educational establishment made available, for consideration, to another)

In Case C‑434/05,

REFERENCE for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decision of 2 December 2005, received at the Court on the same date, in the proceedings

Staatssecretaris van Financiën,

THE COURT (Third Chamber),

composed of A. Rosas, President of the Chamber, J. Klučka, J.N. Cunha Rodrigues, A. Ó Caoimh (Rapporteur) and P. Lindh, Judges,

Advocate General: E. Sharpston,

Registrar: R. Grass,

having regard to the written procedure and further to the hearing on 14 December 2006,

after considering the observations submitted on behalf of:

– Stichting Regionaal Opleidingen Centrum Noord-Kennemerland/West-Friesland (Horizon College), by G.C. Bulk, advocaat, and A. van Dongen, adviser,

– the Netherlands Government, by H.G. Sevenster and P. van Ginneken, acting as Agents,

– the Greek Government, by E. Mamouna, O. Patsopoulou and S. Trekli, and by K. Georgiadis and S. Spyropoulos, acting as Agents,

– the Commission of the European Communities, by D. Triantafyllou and A. Weimar, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 8 March 2007,

gives the following

1 This reference for a preliminary ruling concerns the interpretation of Article 13A(1)(i) 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; ‘the Sixth Directive’).

2 The reference was made in the course of proceedings between Stichting Regionaal Opleidingen Centrum Noord-Kennemerland/West-Friesland (Horizon College), established in Alkmaar (Netherlands) (‘Horizon College’), and Staatssecretaris van Financiën (State Secretary for Finance) following an additional assessment for value added tax (‘VAT’) issued to Horizon College by the State Secretary.

3 Article 13 of the Sixth Directive provides:

…

(i) children’s or young people’s education, school or university education, vocational training or retraining, including the supply of services and of goods closely related thereto, provided by bodies governed by public law having such as their aim or by other organisations defined by the Member State concerned as having similar objects;

…

– they shall not systematically aim to make a profit, but any profits nevertheless arising shall not be distributed, but shall be assigned to the continuance or improvement of the services supplied,

– they shall be managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest, either themselves or through intermediaries, in the results of the activities concerned,

– they shall charge prices approved by the public authorities or which do not exceed such approved prices or, in respect of those services not subject to approval, prices lower than those charged for similar services by commercial enterprises subject to value added tax,

– exemption of the services concerned shall not be likely to create distortions of competition such as to place at a disadvantage commercial enterprises liable to value added tax.

(b) The supply of services or goods shall not be granted exemption as provided for in (1)(b), (g), (h), (i), (l), (m) and (n) above if:

– it is not essential to the transactions exempted,

– its basic purpose is to obtain additional income for the organisation by carrying out transactions which are in direct competition with those of commercial enterprises liable for value added tax.’

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.

(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.

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

(3) Are the answers to the above questions affected by the fact that the body which makes the teacher available is itself also an educational institution?

Questions referred for a preliminary ruling

First question

12By its first question, read together with the third, the referring court asks, in essence, whether Article 13A(1)(i) of the Sixth Directive is to be interpreted as meaning that the words ‘children’s or young people’s education, school or university education, vocational training or retraining’ in that provision cover the situation in which an educational establishment – within the meaning of Article 13A(1)(i) – makes available, for consideration, a teacher to a host establishment in which that teacher temporarily carries out teaching duties under the responsibility of the host establishment.

13Horizon College takes the view that that question should be answered in the affirmative, since the effective transfer of knowledge and skills which occurs directly between a teacher and students or pupils, irrespective of the legal framework in which such a transfer takes place, is the very essence of education. The Greek and Netherlands Governments and the Commission of the European Communities contend that the first question calls for a negative response.

14As a preliminary point, it should be noted that Article 13A of the Sixth Directive relates to the exemption from VAT of certain activities in the public interest. However, that exemption does not cover every activity performed in the public interest, but only those which are listed in that provision and described in great detail (see Case C‑149/97 Institute of the Motor Industry [1998] ECR I‑7053, paragraph 18; Joined Cases C‑394/04 and C‑395/04 Ygeia [2005] ECR I‑10373, paragraph 16; and Case C‑401/05 VDP Dental Laboratory [2006] ECR I‑0000, paragraph 24).

15According to the case-law of the Court, the exemptions provided for in Article 13 of the Sixth Directive constitute independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see Case C‑349/96 CPP [1999] ECR I‑973, paragraph 15; Case C‑240/99 Skandia [2001] ECR I‑1951, paragraph 23; and Ygeia, paragraph 15).

16The terms used to specify those exemptions are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see Case C‑287/00 Commission v Germany [2002] ECR I‑5811, paragraph 43, and Case C‑8/01 Taksatorringen [2003] ECR I‑13711, paragraph 36). Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT (see Case C‑45/01 Dornier [2003] ECR I‑12911, paragraph 42; Case C‑498/03 Kingscrest Associates and Montecello [2005] ECR I‑4427, paragraph 29; and Case C‑106/05 L.u.P. [2006] ECR I‑5123, paragraph 24). Thus, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 13 should be construed in such a way as to deprive the exemptions of their intended effect (see, to that effect, Case C‑284/03 Temco Europe [2004] ECR I‑11237, paragraph 17, and also, in relation to university education, Commission v Germany, paragraph 47).

17There is no definition in Article 13A(1)(i) of the Sixth Directive of the various forms of education covered by that provision.

18Admittedly, as Horizon College essentially submits, the transfer of knowledge and skills between a teacher and students is a particularly important element of educational activity.

19However, in view of the requirements of the case-law referred to in paragraphs 14 to 16 of this judgment, the fact that such a transfer is taking place is not, by itself, sufficient for the mere supply of a teacher to an educational establishment, for the purpose of carrying out teaching duties under the responsibility of that establishment, to be described as educational activity.

20Indeed, as the Commission submitted, in essence, at the hearing, the educational activity referred to in Article 13A(1)(i) of the Sixth Directive consists of a combination of elements which include, along with those relating to the teacher/student relationship, also those which make up the organisational framework of the establishment concerned.

21However, as stated in paragraph 7 of this judgment, according to the terms of the placement contracts at issue in the main proceedings, it was for the host establishment to define the duties of the teacher concerned, having regard to the duration of the placement and the role assigned to that teacher at Horizon College. In addition, the host establishment was required to insure the teacher for the period of his or her placement.

22Accordingly, the making available of a teacher to the host establishment in such circumstances cannot be regarded, of itself, as an activity capable of being covered by the term ‘education’, within the meaning of Article 13A(1)(i) of the Sixth Directive. As the Greek and Netherlands Governments and the Commission essentially contend, the contract concluded between Horizon College, the host establishment and the teacher concerned aims, at most, simply to facilitate the provision of education by the host establishment.

23That interpretation is not affected by the circumstance – with which the third question put by the referring court is concerned – that the body which makes the teacher available is itself, in common with the host establishment, an educational establishment for the purposes of Article 13A(1)(i) of the Sixth Directive. Where a particular activity is not in itself covered by the term ‘education’, the fact that it is provided by a body governed by public law that has an educational aim, or by another organisation defined by the Member State concerned as having similar objects, cannot alter that analysis.

24The answer to the first question, read together with the third question, must therefore be that Article 13A(1)(i) of the Sixth Directive is to be interpreted as meaning that the expression ‘children’s or young people’s education, school or university education, vocational training or retraining’ does not cover the making available, for consideration, of a teacher to an educational establishment, within the meaning of that provision, in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, even if the body which makes the teacher available is itself a body governed by public law that has an educational aim, or another organisation defined by the Member State concerned as having similar objects.

Second question

25By its second question, read together with the third, the referring court asks, in essence, whether Article 13A(1)(i) of the Sixth Directive is to be interpreted as meaning that the making available by an educational establishment, within the meaning of that provision, for consideration, of a teacher to a host establishment in which that teacher temporarily carries out teaching duties under the responsibility of the host establishment may be exempt from VAT on the basis that it is a supply of services ‘closely related’ to education, within the meaning of Article 13A(1)(i).

26It is apparent from the order for reference that that question arises in the context of a situation in which a teacher is made available in exchange for a payment by the host establishment to the establishment making that teacher available, and where the amount of that payment is equivalent to the salary paid to the teacher in question by the establishment making that teacher available.

27There is no definition in Article 13A(1)(i) of the Sixth Directive of the supply of services ‘closely related’ to education (see, as regards university education, Commission v Germany, paragraph 46). Nevertheless, it is clear from the actual wording of the provision that it does not cover the supply of goods or services which are unrelated to ‘children’s or young people’s education, school or university education, vocational training or retraining’.

28The supply of goods or services can be regarded as ‘closely related’ to education, and thus subject to the same tax treatment under Article 13A(1)(i) of the Sixth Directive, only where they are actually supplied as services ancillary to the education which constitutes the principal service (see, by analogy, Case C‑76/99 Commission v France [2001] ECR I‑249, paragraphs 27 to 30; Dornier, paragraphs 34 and 35; and also Ygeia, paragraphs 17 and 18).

29It follows from the case-law of the Court that a service may be regarded as ancillary to a principal service if it does not constitute an end in itself, but a means of better enjoying the principal service (see, to that effect, in particular, Joined Cases C‑308/96 and C‑94/97 Madgett and Baldwin [1998] ECR I‑6229, paragraph 24; CPP, paragraph 30; Dornier, paragraph 34; and Ygeia, paragraph 19).

30As Horizon College and the Commission essentially submit, the supply of a teacher by one educational establishment to another in order for the teacher temporarily to carry out teaching duties under the responsibility of the latter establishment is an activity which can, in principle, be described as a supply of services closely related to education. Indeed, where there is a temporary shortage of teachers in some educational establishments, making qualified teachers attached to other establishments available to those experiencing the shortage will enable students better to enjoy the education provided by the host establishments.

31That conclusion is not altered by the fact, emphasised by the Greek and Netherlands Governments, that the host establishments benefit from the supply of those teachers, without there being a direct relationship between Horizon College and the students of the host establishments. Similarly, the fact, noted by the Netherlands Government, that the supply of teachers is an activity that is separate from the teaching provided by Horizon College on its own account has no bearing on that conclusion.

32In fact, in order for students of the host establishments better to enjoy the education provided by those establishments, it is not necessary for services closely related to that education to be supplied directly to those students. Furthermore, any lack of a close connection between the principal activity of the establishment making teachers available and its secondary activity – the supply of services closely related to education – is, in principle, irrelevant.

33However, the benefit of the exemption provided for under Article 13A(1)(i) of the Sixth Directive is subject to certain conditions which stem from that article.

34First, both the principal activity of education and the supply of goods or services which are closely related to that activity must be provided by one of the bodies referred to in Article 13A(1)(i) of the Sixth Directive.

35Indeed, as may be seen from the wording of Article 13A(1)(i), in order for the making available of teachers for the benefit of the host establishments to be exempted under that provision, it is necessary for the activity to be provided by a body governed by public law that has an educational aim, or by another organisation defined by the Member State concerned as having similar objects. As is apparent from the order for reference and, in particular, from the third question raised, that condition is likely to be satisfied in the main proceedings.

36Moreover, it is clear from the first indent of Article 13A(2)(b) of the Sixth Directive that, in order for a supply of services or goods not to be precluded from being granted exemption as provided for, inter alia, in Article 13A(1)(i), the main transaction, to which that supply is closely linked, must itself also be an exempted transaction (see Case C‑415/04 Stichting Kinderopvang Enschede [2006] ECR I‑1385, paragraph 22).

37In that regard, it should be noted that, according to the order for reference, the host establishments are themselves ‘educational organisations within the meaning of Article 13A(1)(i) of the Sixth Directive’.

38Second, as is also clear from the first indent of Article 13A(2)(b) of the Sixth Directive, the supply of services or goods which are closely related to the main transactions referred to, inter alia, in Article 13A(1)(i) may be granted exemption only if they are essential to the transactions exempted (see also, to that effect, Commission v Germany, paragraph 48; Ygeia, paragraph 26; and Stichting Kinderopvang Enschede, paragraph 25).

39In order to be described in those terms, the temporary supply of teachers, such as that at issue in the main proceedings, should be of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishments and, consequently, the education from which their students benefit, would have an equivalent value (see, by analogy, Stichting Kinderopvang Enschede, paragraphs 27, 28 and 30).

40In that regard, it should be observed, as the Netherlands Government has done, that there may well be commercial placement agencies whose services are not exempt and whose activities include the supply of teaching staff to schools or universities. In the main proceedings, for the supply of teachers by Horizon College to be regarded as essential to the education provided by the host establishments, it would have to be of a nature such that – owing, for example, to the qualifications of the staff in question or the flexibility of the terms of their supply – the same level and quality of teaching could not be assured simply by turning to such placement agencies.

41It falls to the referring court, taking into account all of the specific facts of the dispute before it, to determine the essential character of the services supplied by Horizon College.

42Third, according to the second indent of Article 13A(2)(b) of the Sixth Directive, the supply of services or goods is not to be granted exemption as provided for in Article 13A(1)(i) if its basic purpose is to obtain additional income for the organisation by carrying out transactions which are in direct competition with those of commercial enterprises liable for VAT.

43That exclusion is a specific expression of the principle of fiscal neutrality, which precludes, in particular, treating similar supplies of services, which are thus in competition with each other, differently for VAT purposes (see Case C‑109/02 Commission v Germany).

[2003] ECR I‑12691, paragraph 20, and Ygeia, paragraph 32).

44In the main proceedings, it therefore falls to the referring court to determine whether, by making some of its teachers available to other educational establishments, Horizon College intended, essentially, to obtain additional income by carrying out a transaction which was in direct competition with commercial enterprises liable for VAT, such as commercial placement agencies. In that regard, the fact that an establishment engaged in such a placement activity receives payment equal to the salary which it pays to the teachers thus supplied is not, in itself, sufficient to establish that the transaction is not intended to obtain additional income.

45Finally, it should be noted that Article 13A(2)(a) of the Sixth Directive gives Member States the power to make the granting to bodies other than those governed by public law of the exemption provided for in, inter alia, Article 13A(1)(i) subject to one or more of the conditions set out in Article 13A(2)(a). It is for the referring court to verify whether such a power has been implemented in the Netherlands and, if so, whether such conditions are applicable in the main proceedings.

46Therefore, the answer to the second and third questions, read together, must be that Article 13A(1)(i) of the Sixth Directive, read in conjunction with Article 13A(2) of that directive, is to be interpreted as meaning that the making available, for consideration, of a teacher to an educational establishment in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, may constitute a transaction that is exempt from VAT on the basis that it is a supply of services ‘closely related’ to education, within the meaning of Article 13A(1)(i), if such a teacher placement is a means of better enjoying the education deemed to be the principal service, provided, however, – which it is for the national court to verify – that:

– both that principal service and the placement which is closely related to it are provided by bodies referred to in Article 13A(1)(i), taking into account, where appropriate, any conditions which may have been introduced by the Member State concerned pursuant to Article 13A(2)(a);

– that placement is of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishment and, consequently, the education from which its students benefit, would have an equivalent value; and

– the basic purpose of such a placement is not to obtain additional income by carrying out a transaction which is in direct competition with commercial enterprises liable for VAT.

Third question

47As is apparent from paragraphs 12, 23 to 25, 34 and 35 of this judgment, the answer to the third question is integral to the examination of the first two questions and to the answers which have been given to those questions. Therefore, there is no need to answer the third question separately.

Costs

48Since 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.

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

1.Article 13A(1)(i) 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, is to be interpreted as meaning that the expression ‘children’s or young people’s education, school or university education, vocational training or retraining’ does not cover the making available, for consideration, of a teacher to an educational establishment, within the meaning of that provision, in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, even if the body which makes the teacher available is itself a body governed by public law that has an educational aim, or another organisation defined by the Member State concerned as having similar objects.

2.Article 13A(1)(i) of Sixth Directive 77/388, read in conjunction with Article 13A(2) of that directive, is to be interpreted as meaning that the making available, for consideration, of a teacher to an educational establishment in which that teacher temporarily carries out teaching duties under the responsibility of that establishment, may constitute a transaction that is exempt from value added tax on the basis that it is a supply of services ‘closely related’ to education, within the meaning of Article 13A(1)(i), if such a teacher placement is a means of better enjoying the education deemed to be the principal service, provided, however, – which it is for the national court to verify – that:

– both that principal service and the placement which is closely related to it are provided by bodies referred to in Article 13A(1)(i), taking into account, where appropriate, any conditions which may have been introduced by the Member State concerned pursuant to Article 13A(2)(a);

– that placement is of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishment and, consequently, the education from which its students benefit, would have an equivalent value; and

– the basic purpose of such a placement is not to obtain additional income by carrying out a transaction which is in direct competition with commercial enterprises liable for value added tax.

[Signatures]

*

Language of the case: Dutch.