CELEX: 62005CJ0166
Sixth VAT Directive
Place of supply for tax purposes
Article 9
Supply of services connected with immovable property
Transmission of the fishing rights over a particular part of a stretch of water

This reference for a preliminary ruling concerns the interpretation of Article 9(2)(a) 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 for  assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’).
The reference was made in the course of proceedings between Heger Rudi GmbH (‘Heger’) and the Finanzamt Graz-Stadt, successor
to the Finanzlandesdirektion für die Steiermark, concerning a request for a refund of the value added tax (‘VAT’) paid in
connection with transfers of fishing permits.

Legal context

Community law
Pursuant to Article 5(1) of the Sixth Directive, ‘supply of goods’ is to mean ‘the transfer of the right to dispose of tangible
property as owner’. According to Article 5(3)(a) and (b) Member States may consider the following to be ‘tangible property’:
‘certain interests in immovable property’ and ‘rights
in rem
giving the holder thereof a right of user over immovable property’.
Article 6(1) of the Sixth Directive defines the supply of services as ‘any transaction which does not constitute a supply
of goods within the meaning of Article 5’. Such transactions may include inter alia ‘assignments of intangible property whether
or not it is the subject of a document establishing title’ or ‘obligations to refrain from an act or to tolerate an act or
situation’.
Article 9(1) of the directive establishes the following general rule:
‘The place where a service is supplied shall be deemed to be the place where the supplier has established his business or
has a fixed establishment from which the service is supplied or, in the absence of such a place of business or fixed establishment,
the place where he has his permanent address or usually resides.’
Article 9(2) of the Sixth Directive sets out a number of exceptions. Thus, Article 9(2)(a) states:
‘The place of the supply of services connected with immovable property, including the services of estate agents and experts,
and of services for preparing and coordinating construction works, such as the services of architects and of firms providing
on-site supervision, shall be the place where the property is situated.’
The arrangements for the refund of VAT in respect of cross‑border supplies are governed by Eighth Council Directive 79/1072/EEC
of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes
– Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ 1979
L 331, p 11; ‘the Eighth Directive’). In essence, the effect of that directive is that the right to refund of input VAT arises
when the taxable person is established in another Member State and has not carried out any onward taxable transaction in the
territory of the country in which the input VAT has been charged. By contrast, when the taxable person has effected onward
taxable transactions in that territory, he no longer has the right to a refund of that VAT under the Eighth Directive, since
the general rule of deduction set out in Article 17 and seq. of the Sixth Directive is applicable.

National legislation
Paragraph 3a(6) of the 1994 Austrian Law on turnover tax (Umsatzsteuergesetz 1994, BGBl. 663/1994) in essence repeats the
provisions of Article 9(2)(a) of the Sixth Directive.

The main proceedings and the question referred
Heger is a company established in Germany, which has no business premises in Austria. In 1997 and 1998, Heger bought fishing
quotas for the Gmundner Traun, a river in Upper Austria, from a company established in Austria, Flyfishing Adventure GmbH
(‘Flyfishing’). Those permits authorised their holders to fish on certain stretches of that river at certain times of year.
Heger sold on those permits to a large number of customers residing in different Member States.
In addition to the sale price of the permits in question, Flyfishing invoiced Heger Austrian VAT at a rate of 20%, totalling
ATS 252 000 (that is, about EUR 18 300).
In December 1999, Heger applied to the competent Austrian authority for refund of the VAT paid in relation to the acquisition
of fishing permits in 1997 and 1998, relying on the provisions transposing the Eighth Directive into Austrian law.
It appears from the order for reference that that application was rejected on the ground that the onward sale of the fishing
permits by Heger to its customers constituted a supply of services connected with immovable property situated in Austria,
so that a refund of the input VAT paid could not be given.
Heger contested that decision before the Verwaltungsgerichtshof, which has decided to stay proceedings and refer to the Court
the following question for a preliminary ruling:
‘Does the transmission of the right to fish by means of a transfer of fishing permits for valuable consideration constitute
a “supply of services connected with immovable property” within the meaning of Article 9(2)(a) of [the Sixth Directive]?’

On the question for a preliminary ruling
The referring court is essentially asking whether Article 9(2)(a) of the Sixth Directive must be interpreted as meaning that
the transfer, for valuable consideration, of fishing permits for a river constitutes a supply of services connected with immovable
property within the meaning of that provision.
In that regard, it should be noted that Article 9(1) of the Sixth Directive contains a general rule for determining the place
of supply for tax purposes whilst Article 9(2) gives a number of specific instances of such places.
In respect of the relationship between the first two paragraphs of Article 9 of the Sixth Directive, the Court has already
held that Article 9(1) in no way takes precedence over Article 9(2). In each situation, the question which must be asked is
whether it corresponds to one of the instances mentioned in Article 9(2) of that directive. If not, that situation falls within
the scope of Article 9(1) (see, to that effect, Case C‑327/94
Dudda
[1996] ECR I‑4595, paragraph 21, and Case C‑41/04
Levob Verzekeringen and OV Bank
[2005] ECR I‑9433, paragraph 33).
It follows that Article 9(2)(a) of the Sixth Directive must not be regarded as an exception to a general rule, which must
be narrowly construed (see, to that effect, Case C‑108/00
SPI
[2001]  ECR I‑2361, point 17).
It is therefore necessary to examine whether a transaction such as that in question in the main proceedings can fall within
the ambit of Article 9(2) of the Sixth Directive. In order that the onward sale of the fishing permits in question may be
regarded as a supply of services connected with immovable property within the meaning of Article 9(2)(a) of the Sixth Directive,
it is necessary first of all that the transmission of those rights constitute a ‘supply of services’ and that the stretches
of river to which the permits relate can be classified as ‘immovable property’.
As the Advocate General pointed out in points 28 and 29 of her Opinion, since it does not appear that the Republic of Austria
made use of the option granted to Member States by Article 5(3) of the Sixth Directive to treat certain interests in immovable
property and/or certain rights
in rem
giving the holder thereof a right of user over such goods, as ‘tangible property’, the transmission for valuable consideration
of the fishing rights in question in the main proceedings cannot be classified as a supply of goods within the meaning of
Article 5(1) of the Sixth Directive. That transmission therefore constitutes a supply of services within the meaning of Article
6(1) of that directive.
As far as the concept of ‘immovable property’ is concerned, one of the essential characteristics of such property is that
it is attached to a specific part of the earth’s surface. In that respect, the Court has previously held that a piece of land
which is permanently delimited, even if it is underwater, can be classified as immovable property (see, to that effect, Case
C-428/02
Fonden Marselisborg Lystbådehavn
[2005] ECR I‑1527, paragraph 34).
Fishing rights such as those acquired and sold on by Heger allow the exercise of such a right over certain very specific parts
of the stretch of water concerned. Those rights, which relate not to the quantities of water which flow in the river and are
constantly replaced, but to certain geographical areas, where those rights may be exercised, are thus connected with a surface
covered in water, which is permanently delimited.
Consequently, the stretches of river to which the fishing permits relate must be regarded as immovable property within the
meaning of Article 9(2)(a) of the Sixth Directive.
In those circumstances it must still be assessed whether the connection between the service in question and that immovable
property is sufficient. It would be contrary to the general scheme of Article 9(2)(a) of the Sixth Directive to place within
the scope of that special rule every supply of services provided that it has a connection, even a very tenuous one, with immovable
property, since a large number of services are connected in one way or another with immovable property.
Thus, only supplies of services which have a sufficiently direct connection with immovable property come under Article 9(2)(a)
of the Sixth Directive. Such a connection is moreover characteristic of all the supplies of services listed in that provision.
The fishing rights at the centre of the dispute in the main proceedings can be exercised only in relation to the river in
question and on the stretches of that river mentioned in the permits. The stretch of water itself, therefore, makes up a constituent
element of the fishing permits and, accordingly, of the transmission of the fishing rights. Since a supply of services such
as that in question in the main proceedings consists in the transmission of an actual right of use of the property, in this
case the river, that immovable property constitutes a central and essential element of that supply. Furthermore, the place
where the immovable property is situated is the place of final consumption of the service.
It follows from all those factors that there exists a sufficiently direct connection between the transmission of fishing permits
and the stretches of water to which they relate. Consequently, a service such as that provided by Heger is connected with
immovable property within the meaning of Article 9(2)(a) of the Sixth Directive.
The answer to the question referred for a preliminary ruling must therefore be that the transmission of the right to fish
by means of a transfer of fishing permits for valuable consideration constitutes a supply of services connected with immovable
property within the meaning of Article 9(2)(a) of the Sixth Directive.

Costs
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 these grounds, the Court (Third Chamber) hereby rules:
The transmission of the right to fish by means of a transfer of fishing permits for valuable consideration constitutes a supply
of services connected with immovable property within the meaning of Article 9(2)(a) 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 for assessment.
[Signatures]
*
Language of the case: German.