CELEX: 61991CJ0162
Farmer practising farming as his main occupation
National fiscal provisions applicable to transfers of real property

Grounds
1 By order of 18 April 1991, received at the Court Registry on 19 June 1991, the Commissione Tributaria di Primo Grado (Tax Court of First Instance), Voghera (Italy), referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of the concept of "farmer practising farming as his main occupation" within the meaning of Article 2(5) of Council Regulation (EEC) No 797/85 of 12 March 1985 on improving the efficiency of agricultural structures (OJ 1985 L 93, p. 1), in order to determine, in proceedings between Tenuta il Bosco and the Italian Finance Ministry, whether the Italian legislation on registration duty on transfers of agricultural land to farmers was compatible with that regulation.
2 Decree No 131 of the President of the Italian Republic of 26 April 1986, approving the single text containing the provisions on registration duty, imposes a registration duty of 8% on transfers of real property for consideration.
3 The duty is 15% if the transfer relates to agricultural land and the purchaser is a person chargeable other than a farmer practising farming as his main occupation or an association or cooperative society, as defined in Articles 12 and 13 respectively of Law No 153 of 9 May 1975 on the implementation inter alia of Council Directive 72/159/EEC of 17 April 1972 on the modernization of farms (OJ, English Special Edition 1972 (II), p. 324).
4 That law includes in the definition of farmer practising farming as his main occupation, apart from the natural persons referred to in Article 12, only agricultural cooperatives and associations of farmers as defined in Article 13, and thereby excludes capital companies.
5 Tenuta il Bosco received notices of assessment from the Stradella Land Registry raising the registration duty payable on its purchases of agricultural land from 8% to 15%, on the grounds that as a capital company it did not come within the definition of a farmer within the meaning of the abovementioned Law No 153.
6 The company appealed to the Commissione Tributaria di Primo Grado, Voghera, against the notices of assessment. It claimed that they were contrary to Article 2(5) of the regulation, which states that:
"Member States shall, for the purposes of this regulation, define what is meant by the expression 'farmer practising farming as his main occupation' .
This definition shall, in the case of a natural person, include at least the condition that the proportion of income derived from the agricultural holding must be 50% or more of the farmer' s total income and that the working time devoted to work unconnected with the holding must be less than half of the farmer' s total working time.
On the basis of the criteria referred to in the foregoing subparagraph, the Member States shall define what is meant by this same expression in the case of persons other than natural persons."
7 Tenuta il Bosco considers that the above definition of a farmer should be given the same interpretation as the substantially identical definition in Article 3(1) of Directive 72/159, cited above, which, by virtue of Article 33(2) of Regulation No 797/85, was replaced by that regulation.
8 The Court of Justice held in its judgment in Case 312/85 Villa Banfi v Regione Toscana [1986] ECR 4039, paragraph 11, that Article 3(1) of Directive 72/159 does not permit Member States, when laying down the criteria to be fulfilled by a legal person in order to be regarded as a farmer practising farming as his main occupation, to exclude certain types of legal person from the scope of the directive solely by reason of their legal form.
9 Faced with the question whether the Italian legislation was compatible with the regulation in so far as the only legal persons it allowed to benefit from the reduced rate of registration duty were agricultural cooperatives and associations of farmers, the Commissione Tributaria di Primo Grado di Voghera considered it necessary
"for the purpose of giving judgment in the present proceedings to obtain an interpretation of Article 2(5) of Community Regulation No 797/85 in order to establish whether, in so far as it makes the Member States responsible for defining what is meant by the expression 'farmer practising farming as his main occupation' , that article permits the exclusion of capital companies solely by reason of their legal form",
and accordingly stayed the proceedings pending a preliminary ruling by the Court on that point of interpretation.
10 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the relevant legislation, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.
11 In determining the scope of a provision of Community law, its wording, context and objectives must all be taken into account.
12 The aim of the regulation is to improve the efficiency of Community agricultural structures in accordance with Community concepts and criteria, and for that purpose it introduces a common measure in Article 1 and provides that the European Agricultural Guidance and Guarantee Fund is to make a contribution to the measures concerning investments in agricultural holdings, without specifying the legal form of those holdings.
13 Article 2 of the regulation gives an exhaustive definition of the criteria with which agricultural holdings must comply in order to benefit from the system of aid for investments in agricultural holdings established by Title 1 of the regulation; it makes Member States responsible for defining, for the purposes of the regulation, what is meant by the expression "farmer practising farming as his main occupation" and requires in paragraph 5 (second subparagraph) compliance with certain minimum conditions, whether with respect to natural persons or persons other than natural persons (third subparagraph).
14 By establishing the Community content of the definition of the expression "farmer practising farming as his main occupation", Article 2 leaves Member States no scope for withholding the benefits of the system of aid introduced by the regulation from agricultural holdings which fulfil the requisite conditions.
15 Like the abovementioned Directive 72/159, not only does the regulation not exclude legal persons, it expressly includes them within its scope provided that they fulfil the conditions laid down in Article 2. Since those conditions are unrelated to the legal form in which a legal person is constituted, Member States are not permitted to deny legal persons the benefit of the system established under the regulation solely because they have assumed a particular legal form.
16 As the Court has held (paragraph 10 of the judgment in Villa Banfi, cited above), such differential treatment would in any event conflict with the principle of non-discrimination enshrined in Article 40(3) of the EEC Treaty which Member States must observe when giving effect to the common agricultural policy.
17 Consequently, the answer to be given to the national court is that, in so far as it assigns to the Member States the task of defining what is meant by the expression "farmer practising farming as his main occupation", Article 2(5) of Regulation No 797/85 does not permit them to exclude capital companies from that definition solely by reason of their legal form.
18 However, in order to assist the national court, it should be made clear that it is only for the purposes of the regulation that Member States are called upon, in accordance with the wording of the first subparagraph of Article 2(5), to define what is meant by the expression "farmer practising farming as his main occupation".
19 Furthermore, it is not possible to derive from the provisions of the Treaty or the rules of secondary Community law any general uniform Community definition of "agricultural holding" universally applicable in all the provisions laid down by law and regulation relating to agricultural production, and that it is for the Community institutions to work out, where appropriate, for the purposes of the rules deriving from the Treaty, such a definition of agricultural holding (judgment in Case 85/77 Santa Anna Azienda Avicola v INPS [1978] ECR 527, paragraphs 8 and 14).
20 Consequently, in the present state of Community law, it is necessary to define the precise scope of the term "farmer practising farming as his main occupation" within the meaning of Article 2(5) of the aforesaid regulation with respect to a national measure of aid for the purchase of land, namely a reduction, such as that in issue in the main proceedings, in the rate of registration duty on purchases of agricultural land by farmers.
21 It is apparent that measures taken by Member States as part of the system of investment aid laid down in Articles 3 to 7 of the aforesaid regulation, which enjoys financial support from the Community under Article 26 of that regulation, can relate only to strictly defined measures.
22 As can be seen from Article 4(1) of the regulation, the system of aids for investments partly financed by the Community cannot relate to expenditure incurred in purchasing land.
23 However, that system of aid does not exclude the possibility of Member States implementing national investment aid measures with no Community contribution, subject to certain prohibitions and limitations specified in Article 8(1) to (4) of the regulation.
24 Article 8(5) of the regulation specifically provides that those prohibitions and limitations are not to apply to national measures of aid for land purchase, provided that these conform with Articles 92 to 94 of the Treaty.
25 It follows that national aids for land purchase such as reduced rates of registration duty on acquisitions of agricultural land by farmers do not fall within the scope ratione materiae of the regulation but come under national law, it being for that law to define the system of such aids in a manner which complies with Articles 92 to 94 of the Treaty.
26 Consequently, it should be specified in the answer to be given to the national court that a national measure of aid for the purchase of land which consists in a reduced rate of registration duty on acquisitions of agricultural land by farmers, such as that in issue in the main proceedings, does not fall within the scope of the aforementioned Regulation No 797/85 and is thus governed by national law alone.
Decision on costs
Costs
27 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
Operative part
On those grounds,
THE COURT (Second Chamber),
in answer to the question referred to it by the Commissione Tributaria di Primo Grado, Voghera, by order of 18 April 1991, hereby rules:
Article 2(5) of Council Regulation (EEC) No 797/85 of 12 March 1985 on improving the efficiency of agricultural structures, in so far as it assigns to the Member States the task of defining what is meant by the expression "farmer practising farming as his main occupation", does not permit them to exclude capital companies from that definition solely by reason of their legal form. However, a national measure of aid for the purchase of land which consists in a reduced rate of registration duty payable on acquisitions of agricultural land by farmers, such as that in issue in the main proceedings, does not fall within the scope of the regulation and is thus governed solely by national law.