Opinion of the Advocate General — ECLI:EU:C:2001:115
Date: 2001-02-22
Language of the case: Dutch
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the Judgment 
1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Supply of goods — Transfer of the power to dispose of tangible 
property — Open to Member States to treat certain rights in rem in immovable 
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SUMMARY — CASE C-326/99 
property as tangible property — Exercise of that option subject to the condition that 
the price of the right in rem is at least equal to the economic value of the property 
concerned — Whether permissible 
(Council Directive 77/388, Art. 5(3)(b)) 
2. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Exemptions provided for by the Sixth Directive — Exemption for 
the letting and leasing of immovable property — Grant of usufructuary right, for a 
limited period and for consideration, treated as leasing and letting of immovable 
property — Whether permissible 
(Council Directive 77/388, Art. 13B(b) and C(a)) 
1. On a proper construction of Arti­
cle 5(3)(b) of the Sixth Directive 
77/388 on the harmonisation of the 
laws of the Member States relating to 
turnover tax, it does not preclude 
adoption of a national provision, 
whereby classification as a 'supply of 
goods' of the grant, transfer, modifica­
tion, waiver or termination of rights in 
rem in immovable property is made 
subject to the condition that the total 
consideration, plus turnover tax, must 
amount to at least the economic value 
of the immovable property to which 
those rights in rem relate. Such a 
condition is consonant with the aim 
of the Sixth Directive to ensure that 
VAT is actually collected and in the 
proper way, notwithstanding the fact 
that this condition will rarely be ful­
filled in practice. Consequently, such a 
condition is not contrary to the provi­
sions of Article 5(3) of the Sixth Direc­
tive. 
(see paras 35-36, 38, and operative part 1) 
2. On a proper construction of Arti­
cle 13B(b) and C(a) of the Sixth Direc­
tive 77/388 on the harmonisation of 
the laws of the Member States relating 
to turnover tax, it does not preclude 
adoption of a national provision 
which, for the purposes of the applica­
tion of the exemption from value added 
tax, allows the grant, for an agreed 
period and for payment, of a right in 
rem entitling the holder to use immo­
vable property, such as a usufructuary 
right, to be treated as the leasing or 
letting of immovable property. 
Observance of the principle of the 
neutrality of VAT and the requirement 
for a consistent application of the 
provisions of the Sixth Directive, in 
particular the proper, simple and uni­
form application of the exemptions 
provided for, entail treating the grant 
of such a right like leasing and letting, 
for the purposes of the application of 
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'GOED WONEN' 
Article 13B(b) and C(a). Treating such 
a form of use of immovable property as 
letting prevents any abusive creation of 
a right to deduct input tax on immo­
vable property, which is an aim 
expressly provided for by Article 13 
of the Sixth Directive. 
That interpretation is not affected by 
the fact that in the civil law of many 
Member States usufruct has character­
istics which distinguish it from leasing 
or letting. The particularities in ques­
tion, arising from the fact that these 
legal institutions belong to distinct 
legal categories, are secondary in rela­
tion to the fact that, economically, a 
right such as the usufructuary right 
under consideration and leasing and 
letting present an essential common 
characteristic, which lies in conferring 
on the person concerned, for an agreed 
period and for payment, the right to 
occupy property as if that person were 
the owner and to exclude any other 
person from enjoyment of such a right. 
(see paras 54-59 and operative part 2) 
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