22.11.2008

Official Journal of the European Union

C 301/9

(Case C-288/07) (1)

(Sixth VAT Directive - Article 4(5) - Activities engaged in by bodies governed by public law - Provision of off-street car-parking facilities for which a charge is made - Distortions of competition - Meaning of ‘would lead to’ and ‘significant’)

(2008/C 301/16)

Language of the case: English

Referring court

Parties to the main proceedings

Appellants: The Commissioners of Her Majesty's Revenue and Customs

Respondents: Isle of Wight Council, Mid-Suffolk District Council, South Tyneside Metropolitan Borough Council, West Berkshire District Council

Re:

Reference for a preliminary ruling — High Court of Justice of England and Wales (Chancery Division) — Interpretation of Article 4(5) 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) — Activities or transactions engaged in by a body governed by public law in its capacity as a public authority — Off-street parking facilities for which a charge is made — Non-application of VAT leading to distortions of competition — Concept of ‘distortion of competition’ — Criteria for determination

Operative part of the judgment

1.Article 4(5) 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 significant distortions of competition, to which the treatment as non-taxable persons of bodies governed by private law acting as public authorities would lead, must be evaluated by reference to the activity in question, as such, without such evaluation relating to any local market in particular.

2.The expression ‘would lead to’ is, for the purposes of the second subparagraph of Article 4(5) of Sixth Council Directive 77/388/EEC, to be interpreted as encompassing not only actual competition, but also potential competition, provided that the possibility of a private operator entering the relevant market is real, and not purely hypothetical.

3.The word ‘significant’ is, for the purposes of the second subparagraph of Article 4(5) of Sixth Council Directive 77/388/EEC, to be understood as meaning that the actual or potential distortions of competition must be more than negligible.

(1) OJ C 199, 25.8.2007.