Opinion of the Advocate General — ECLI:EU:C:2021:532
Date: 2021-07-01
Language of the case: German
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Translation C-324/20 — 1 
Case C-324/20 
Request for a preliminary ruling 
Date lodged: 
22 July 2020 
Referring court: 
Bundesfinanzhof (Germany) 
Date of the decision to refer: 
7 May 2020 
Defendant and appellant in the appeal on a point of law: 
Finanzamt (Tax Office) B 
Applicant and respondent in the appeal on a point of law: 
X-Beteiligungsgesellschaft mbH 
  
 
 
BUNDESFINANZHOF (FEDERAL FINANCE COURT) 
ORDER 
In the case of 
Tax Office B 
Defendant and appellant in the appeal on a point of law 
v 
X-Beteiligungsgesellschaft mbH 
EN 
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Applicant and respondent in the appeal on a point of law 
[…] 
concerning turnover tax in 2012, 
the Fifth Chamber [Or. 2] 
made the following order on 7 May 2020: 
O p e r a t i v e P a r t 
I. The following questions are referred to the Court of Justice of the European 
Union for a preliminary ruling: 
1. Does a service provided on a single occasion and therefore not in relation to a 
certain period of time give rise to successive statements of account or successive 
payments within the meaning of Article 64(1) of the VAT Directive merely on the 
basis of an agreement to pay in instalments? 
2. Alternatively, if the first question is answered in the negative: Is non-payment 
within the meaning of Article 90(1) of the VAT Directive to be assumed if the 
taxable person, when providing his service, agrees that the service is to be paid for 
in five annual instalments and the national law relating to cases of subsequent 
payment provides for an adjustment by which the previous reduction in the 
taxable amount is cancelled again in accordance with that article? 
II. […] 
G r o u n d s 
I. 
1 The applicant and respondent in the appeal on a point of law (applicant) pays tax 
on its turnover on the basis of the remuneration agreed according to 
Paragraph 13(1)(1)(a) of the Umsatzsteuergesetz (Law on turnover tax, ‘the 
UStG’). In the contested year of 2012, it provided a taxable mediation service for 
T-GmbH (GmbH) on the basis of a fee agreement of 7 November 2012. 
According to the latter, the GmbH (principal) commissioned the applicant (agent) 
to act as an intermediary in a contract for the purchase of a property in 
M. According to the preamble to the agreement, the contract for the purchase of 
the property had already been certified and it had been established that the agent 
had met all of its obligations resulting from this commission. In return, it was 
agreed that the agent should receive a fee of EUR 1 000 000 plus VAT from the 
principal. The agreed fee was to be paid in five instalments of EUR 200 000 plus 
turnover tax. The instalments were due at yearly intervals and the first instalment 
was payable on 30 June 2013. The principal was required to provide the agent 
with security for the meeting of fee payments. In subsequent years, the applicant 
FINANZAMT B 
 
3 
issued invoices with tax statements relating to those respective instalments on the 
respective due dates which had been received and on which tax had been paid 
corresponding to the sum received. [Or. 3]  
2 Following a special turnover tax audit, the defendant and appellant in the appeal 
on a point of law (the Tax Office) took the view that the applicant was required to 
pay tax on the entire mediation fee on the basis of the mediation service already 
provided in the contested year. The Tax Office did not accept the applicant’s 
objection that it still had to provide further marketing services from 2013 to 2018 
and that an annual payment of EUR 200 000 was owed on condition that 
appropriate progress was made on the project, nor did it accept a supplementary 
agreement of 15 March 2016 according to which what was referred to as a lead 
estate agent marketing order with a contingency fee was created, to the effect that 
the agent procured the property to which the contract related for the principal and 
supported the overall project devised by the principal for that purpose through 
active involvement in further marketing. The Tax Office therefore amended the 
2012 turnover tax assessment by decision of 22 December 2016. The objection 
was unsuccessful. 
3 In contrast, the Finanzgericht (Finance Court, Germany) largely accepted the 
action […]. The applicant had already provided its mediation service in the 
contested year as stated in the fee agreement. Contrary to the view expressed by 
the applicant, a different interpretation according to the supplementary agreement 
could not be considered. That did not mean that the agreements reached therein 
already existed at the time of the original fee agreement. However, given the case-
law of the Court of Justice of the European Union (Court of Justice) relating to 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax (VAT Directive) and the case-law of the Bundesfinanzhof 
(Federal Finance Court), with the exception of the first sum received in the 
following year of 2013, unrecoverability according to Paragraph 17(2)(1) and the 
first sentence of Paragraph 17(1) of the UStG was to be applied. The Tax Office 
opposes this by way of its appeal on a point of law. 
II. 
4 1. Legal context 
5 (a) EU law 
Article 63 of the VAT Directive provides as follows: 
‘The chargeable event shall occur and VAT shall become chargeable when the 
goods or the services are supplied.’ [Or. 4] 
6 Article 64(1) of this Directive states as follows: 
‘Where it gives rise to successive statements of account or successive payments, 
the supply of goods, other than that consisting in the hire of goods for a certain 
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period or the sale of goods on deferred terms, as referred to in point (b) of 
Article 14(2), or the supply of services shall be regarded as being completed on 
expiry of the periods to which such statements of account or payments relate.’ 
7 Article 66(1) of the Directive reads as follows: 
‘By way of derogation from Articles 63, 64 and 65, Member States may provide 
that VAT is to become chargeable, in respect of certain transactions or certain 
categories of taxable person at one of the following times: 
(a) no later than the time the invoice is issued; 
(b) no later than the time the payment is received; 
(c) where an invoice is not issued, or is issued late, within a specified period from 
the date of the chargeable event.’ 
8 Article 90 of this Directive states as follows: 
‘(1) In the case of cancellation, refusal or total or partial non-payment, or where 
the price is reduced after the supply takes place, the taxable amount shall be 
reduced accordingly under conditions which shall be determined by the Member 
States.’ 
(2) In the case of total or partial non-payment, Member States may derogate from 
paragraph 1.’ 
9 (b) National law 
Paragraph 13(1)(1) of the UStG provides as follows: 
‘Tax shall become chargeable 
1. on supplies of goods and other services 
10 (a) in cases where tax is calculated on the basis of the remuneration agreed 
(Paragraph 16(1), first sentence), upon expiry of the prepayment period in which 
the supplies of goods or services were made. This shall also apply to part supplies. 
Supplies are part supplies where it is agreed that certain parts of an economically 
divisible supply are to be paid for separately. Where the remuneration or part 
remuneration is received before the supply or part supply has been made, tax shall 
become chargeable thereon upon expiry of the prepayment period in which the 
remuneration or part remuneration was received, [Or. 5] 
(b) in cases where tax is calculated on the basis of the remuneration collected 
(Paragraph 20), upon expiry of the tax period in which the remuneration was 
received.’ 
11 Paragraph 17 of the UStG provides as follows: 
FINANZAMT B 
 
5 
‘(1) When the basis of assessment of a taxable transaction for the purposes of 
Paragraph 1(1)(1) has changed, the trader who made the supply shall adjust the 
amount of tax payable accordingly. (…) 
(2) Subparagraph 1 shall apply mutatis mutandis where 
12 1. the remuneration agreed for a taxable supply of goods or other services or 
a taxable intra-Community acquisition has become unrecoverable. If the 
remuneration is received retrospectively, the amount of the tax and the deduction 
of tax shall be readjusted.’ 
13 The first sentence of Paragraph 20 of the UStG in the version applicable in the 
contested year read as follows: 
‘On application, the Tax Office may allow a trader, 
14 1. whose total turnover (Paragraph 19(3)) in the preceding calendar year did 
not exceed EUR 500 000 [from 1 January 2020: EUR 600 000], or 
2. who is exempt from the obligation to keep accounts and to draw up annual 
stock inventories under Paragraph 148 of the Abgabenordnung (Tax Code), or 
3. whose turnover derives from an activity as a member of a liberal profession 
within the meaning of Paragraph 18(1)(1) of the Einkommensteuergesetz (Law on 
income tax), 
15 to calculate turnover tax on the basis of the remuneration received rather than on 
the basis of the remuneration agreed (first sentence of Paragraph 16(1)).’ 
16 2. First question referred 
17 a) Preliminary remarks 
The Court of Justice held, in its judgment of 29 November 2018, baumgarten 
sports & more (C-548/17, EU:C:2018:970[…]), that Article 63 of the VAT 
Directive, read in conjunction with Article 64(1) thereof, precluded the chargeable 
event and chargeability of a tax on the supply of agency services for professional 
football players by an agent, such as that at issue in the main proceedings, paid in 
[Or. 6] conditional instalments over several years further to the placement, from 
being regarded as occurring or taking effect when the player is placed. 
18 In support of that interpretation, the Court of Justice referred to the fact that it 
appears to be the case in such a service, which entails negotiating the placement of 
a player for a certain number of seasons with a club, and is remunerated by means 
of conditional payments in instalments over several years, further to the 
placement, that services within the meaning of Article 64(1) of the VAT Directive 
give rise to successive statements of account or successive payments (judgment of 
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the Court of Justice, baumgarten sports & more, EU:C:2018:970, paragraphs 29 
and 30[…]). 
19 The Chamber hearing the application accepted this in its following judgment and 
decided that traders providing mediation services remunerated in instalments 
could invoke a direct application of Article 64(1) of the VAT Directive ([…]) and, 
for the case in suit in that instance, based this decision on the grounds that it was 
irrelevant whether, for example in the case of a transfer of use, it was a service 
provided in relation to a certain period of time. It was instead sufficient that a 
mediation service was remunerated according to the permanence of the outcome 
achieved (here: the player staying with the receiving club for the agreed duration 
of the contract) […]. 
20 (b) The question of law at issue 
21 (aa) According to a literal interpretation of Article 64(1) of the VAT Directive, the 
answer to the first legal question may be in the affirmative even if the present case 
only relates to an exception to Article 63 of the VAT Directive. This is because, in 
the present case of a time limit on payment claims, as in the case of an agreement 
over payment in instalments, according to the wording of this provision, the 
service gives rise to successive statements of account or successive payments. 
22 (bb) Nevertheless, the Chamber has doubts over the interpretation of Article 64(1) 
of the VAT Directive. These doubts result from the fact that this provision 
excludes from its scope any agreement over payment in instalments, as also exists 
in the present case, in the event of supply through the sale of goods on deferred 
terms. Article 64(1) of the VAT Directive does not contain a comparable 
exclusion for services as in the present case. 
23 This may possibly be due to the fact that, through Article 64(1) of the VAT 
Directive, the EU legislature merely adopted, without making any changes to it, a 
rule which already existed in the second sentence of Article 10(2)(1) [Or. 7] of 
the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of 
the laws of the Member States relating to turnover taxes (Directive 77/388/EEC) 
when that directive entered into force. There may therefore be reason to assume 
that, when Directive 77/388/EEC entered into force, the legislature did not 
consider the case — of which it may not have been aware at the time — of 
payment in instalments for services, but would have excluded this case from the 
scope of Article 64(1) of the VAT Directive, as with the sale of goods on deferred 
terms, if it had known about this possible scenario. 
24 This has meant that supplies of goods and services are treated the same. 
25 Furthermore, a literal application of Article 64(1) of the VAT Directive could 
result in an excessive restriction of Article 63 of the VAT Directive. This is 
because, as far as services are concerned, a literal application of Article 64(1) of 
the VAT Directive would ultimately result in the chargeable event arising not 
when the service is provided, as provided for in Article 63 of the VAT Directive, 
FINANZAMT B 
 
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but instead only on respective receipt of payment in accordance with the 
authorisation in Article 66(1)(c) of the VAT Directive. 
26 (cc) It should also be pointed out that the present case may possibly differ in 
legally relevant terms from the scenario in the ‘baumgarten sports & more’ case 
(EU:2018:970[…]). For example, the ‘baumgarten sports & more’ case 
(EU:2018:970[…]) related to payment claims which depended on a condition 
being met, in that case the existence of the contract of employment with the 
placed player at certain points in time. It was not certain whether this condition 
was being met at the stipulated point in time when the placement service was 
being provided. 
27 In contrast, in the present case, there is only a time limit, not a condition that is not 
known to have been met. As in the case of a sale of goods on deferred terms, the 
existence of the payment claim was therefore certain at the stipulated point in 
time. Based on the findings of the Finance Court which are binding on the 
Chamber […], this was not a scenario in which the mediation service was paid for 
according to the permanence — or equally the sustainability — of the outcome 
achieved […]. As a result, contrary to the view presented by the applicant, no 
condition has been met as in that case either. 
28 (dd) Finally, it is questionable what significance should be attributed to the 
reference in the judgment of the Court of Justice, baumgarten sports & more 
(EU:C:2018:970[…]) to the judgment of the Court of Justice [Or. 8] of 
3 September 2015, Asparuhovo Lake Investment Company, (C-463/14, 
EU:C:2015:542, paragraphs 49 and 50[…]). This is because that case related to a 
consultancy service continually provided over a longer period of time, whilst the 
mediation service is not provided in relation to a certain period of time, but as a 
one-off service relating to a single point in time. The Court of Justice affirmed 
that ‘[giving] rise’ [to successive payments] within the meaning of Article 64(1) 
of the VAT Directive applies to consultancy services made available to a client 
continually and paid for through recurring fixed amounts — irrespective of 
whether the agent had provided its client with actual consultancy services during 
that period of time. This may support the view that successive statements of 
account or successive payments are dependent on the fact that the services to 
which the statements of account relate have, in the broadest sense, some 
‘relationship to the future’ or a ‘ripple effect’. 
29 This corresponds to the national concept of part supply in the second and third 
sentences of Paragraph 13(1)(1)(a) of the UStG which depends on an economic 
divisibility of the service such as in the case of hire based on a monthly hire 
charge agreement. On this basis and contrary to the aforementioned case-law (see 
II.2.a above), the Court of Justice should refuse a priori the application of 
Article 64(1) of the VAT Directive to mediation services. 
30 c) Relevance to the ruling 
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The national law contains no rule corresponding to Article 64(1) of the VAT 
Directive. As a result, it must be assumed that a tax arises precisely when the 
service is provided in the contested year. This provision would run counter to the 
latter if it interpreted such that it applies to services that are also based on 
agreements over payment in instalments. 
31 3. Second question referred 
32 a) Preliminary remarks 
According to Article 90(1) of the VAT Directive, in particular in the event of total 
or partial non-payment after the supply takes place, the taxable amount shall be 
reduced accordingly under conditions which shall be determined by the Member 
States. 
33 It is unclear, when interpreting this provision, what significance should be 
attributed to the case-law of the Court of Justice that ‘in the field of VAT, [Or. 9] 
taxable persons act as tax collectors for the State’ (judgment of the Court of 
Justice of 20 October 1993, Balocchi, C-10/92, EU:C:1993:846, 
paragraph 25[…]). The Court of Justice explained this function of ‘tax collectors 
for the State and on behalf of the treasury’ on the basis that taxable persons ‘[owe] 
VAT even though this, as a tax on consumption, is ultimately borne by the final 
consumer’ (judgment of the Court of Justice of 21 February 2008, Netto 
Supermarkt, C-271/06, EU:C:2008:105[…]). 
34 b) The question of law at issue 
In the opinion of the Chamber, the tax collector function of a taxable person 
within the meaning of the aforementioned Court of Justice case-law includes the 
possibility of preventing, through the application of Article 90(1) of the VAT 
Directive, the taxable person from having to pre-finance the tax already owed by 
him for the period of provision of the service over a period of a number of years 
(see, in relation hereto, also the third question of the Chamber’s order for 
reference of 21 June 2017[…] which the Court of Justice did not have to answer 
in its baumgarten sports & more judgment, EU:C:2018:970[…]). 
35 It is therefore important, as far as the present case is concerned, whether it is 
consistent with the function of a tax collector, in relation to a service already 
provided on 7 November 2012, to assume that tax had arisen for that year (in 
answering the first question in the negative) without any reduction of the taxable 
amount even though this service was supposed to be paid for, according to the 
agreement reached at that point in time, through five annual payments with the 
first due date on 30 June 2013. This would then constitute pre-financing of the tax 
by the applicant in the contested year even though receipt of the payment occurred 
only later over a period of five years. 
36 The Chamber is careful to point out here that the national law, through the second 
sentence of Paragraph 17(2)(1) of the UStG, contains a provision according to 
FINANZAMT B 
 
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which, following a reduction within the meaning of Article 90(1) of the VAT 
Directive, the taxable amount is to be increased again if payment is subsequently 
made (see, in relation hereto, the judgment of the Court of Justice of 23 November 
2017, Di Maura, C-246/16, EU:C:2017:887[…]). 
37 c) Relevance to the ruling 
The second question is also relevant to the ruling since the action also has to be 
allowed if the reduction according to Article 90 of the VAT Directive is affirmed. 
[Or. 10] 
38 4. Legal basis of the reference 
The request for a preliminary ruling is made to the Court of Justice on the basis of 
Article 267 of the Treaty on the Functioning of the European Union. 
39 5. The stay of proceedings 
[…].