Opinion of the Advocate General — ECLI:EU:C:2008:590
Date: 2008-10-23
Language of the case: Danish
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Denmark

Summary of the Judgment 1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Deduction of input tax (Council Directive 77/388, Art. 17(6), second para.) 2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable transactions (Council Directive 77/388, Art. 6(2)) 1. The second subparagraph of Article 17(6) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as precluding a Member State from applying, after the entry into force of that directive, an exclusion from the right to deduct input value added tax on expenditure in respect of meals provided by company canteens free of charge to business contacts and staff in the course of work meetings, where, at the moment when the directive entered into force, that exclusion was not actually applied to that expenditure because of an administrative practice of taxing services provided by company canteens at cost price, that is to say, the price of the raw materials plus the cost of wages for preparation and sale of the food and drinks and the administration of the canteens, in return for the right to deduct input value added tax in full. (see para. 44, operative part 1) 2. Article 6(2) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, which, for the purposes of levying value added tax, treats certain transactions for which no consideration is actually received by the taxable person as supplies of goods and provisions of services effected for consideration, must be interpreted in such a way that, on the one hand, it does not cover the provision, free of charge, of meals in company canteens to business contacts in the course of meetings held on the company premises where objective evidence indicates – this being a matter for the referring court to determine – that those meals are provided for strictly business-related purposes. On the other hand, Article 6(2) applies in principle to the provision, free of charge, of meals by a company to its staff on its premises, unless – this likewise being a matter for the referring court to determine – the needs of the company, such as the need to ensure that work meetings are run smoothly and without interruptions, require the employer to ensure that meals are provided. Although the provision of meals to staff is generally for private use and falls within the scope of the personal choice of each member of staff, with which the employer does not interfere, in certain particular circumstances, the provision of meals to employees by the employer is not for the private use of the employees and is not for purposes other than those of the business. The personal advantage which employees derive from such provision appears to be merely accessory to the requirements of the business. (see para. 57, 62, 65, operative part 2)