# C_2008209EN.01002901.xml

| 15.8.2008 | EN | Official Journal of the European Union | C 209/29 |
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15.8.2008

EN

Official Journal of the European Union

C 209/29

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Action brought on 3 June 2008 — Commission of the European Communities v Republic of Finland

(Case C-246/08)

(2008/C 209/43)

Language of the case: Finnish

Parties

Applicant: Commission of the European Communities (represented by P. Aalto and D. Triantafyllou, acting as Agents)

Applicant:

Defendant: Republic of Finland

Defendant:

Form of order sought

| — | declare that, by failing to charge value added tax on legal advice services provided in return for part payment in accordance with the legal aid provisions by State legal aid offices (by public legal advisers acting as their employees), while the corresponding services provided by private advisers are subject to value added tax, the Republic of Finland has failed to fulfil its obligations under Articles 2(1) and 4(1), (2) and (5) of the Sixth VAT Directive 77/388/EEC (1); |
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declare that, by failing to charge value added tax on legal advice services provided in return for part payment in accordance with the legal aid provisions by State legal aid offices (by public legal advisers acting as their employees), while the corresponding services provided by private advisers are subject to value added tax, the Republic of Finland has failed to fulfil its obligations under Articles 2(1) and 4(1), (2) and (5) of the Sixth VAT Directive 77/388/EEC (1);

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| — | order the Republic of Finland to pay the costs. |
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order the Republic of Finland to pay the costs.

Pleas in law and main arguments

In Finland a recipient of legal aid may choose a public legal adviser or a private adviser to represent him in legal proceedings. In that situation the services provided by a public legal adviser in return for part payment are not subject to value added tax, whereas value added tax is charged on the services provided by a private adviser in return for part payment. The Commission considers that this is a case of different value added tax treatment of the same services, with effects on the Community's own resources.

The Commission argues that the services provided by State legal aid offices in legal proceedings do not fall within the scope of the first subparagraph of Article 4(5) of the Sixth VAT Directive. Those services are clearly free from value added tax where they are provided without charge. If, on the other hand, the recipient of legal aid pays a fee for the service, services provided by a State legal aid office cannot be regarded as free from value added tax.

The second subparagraph of Article 4(5) of the VAT Directive provides that bodies governed by public law are to be regarded as taxable persons in respect of the activities in which they engage as public authorities if treating them differently would lead to significant distortions of competition. Even if the State legal aid offices were regarded as acting as public authorities in this respect, the Commission considers that excluding them from liability to tax in the above cases would lead to significant distortions of competition. For that reason they should be regarded as taxable persons with respect to value added tax.

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(1)  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).

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