Judgment — ECLI:EU:C:2010:171
Date: 2010-03-25
Language of the case: Dutch
Court formation: Second Chamber
Subject matter: Taxation;Value added tax
Procedure: Action for failure to fulfil obligations - unfounded
Origin: Netherlands

summary of the pleas in law on which the application is based, and that that statement must be sufficiently clear and precise to enable the defendant to prepare his or her defence and the Court to rule on the application. It is therefore necessary for the essential points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court does not rule ultra petita or indeed fail to rule on an objection (see judgments of 26 April 2007, Commission v Finland, C‑195/04, EU:C:2007:248, paragraph 22 and the case-law cited, and of 21 February 2008, Commission v Italy, C‑412/04, EU:C:2008:102, paragraph 103). 44 It should also be noted in relation to Article 132(1)(n) of Directive 2006/112, which the Commission likewise invokes in support of the first complaint, that in its defence the Kingdom of the Netherlands stated that the sociocultural sector to which the 2007 decree refers must be understood as referring only to ‘welfare and social security work’ within the meaning of Article 132(1)(g) of that directive, rather than to ‘the supply of certain cultural services’ within the meaning of Article 132(1)(n), and that the Commission has not contradicted it on that point. 45 Under those circumstances, in order to assess the merits of the first complaint, it is appropriate only to examine whether, in its action, the Commission has established that the supply of staff envisaged by the 2007 decree in the sociocultural, health and education sectors does not fall within the definition of a ‘closely related’ or ‘closely linked’ activity within the meaning of Article 132(1)(b), (g) and (i) of Directive 2006/112. 46 Under Directive 2006/112, the scope of application of VAT is very broad, encompassing all the economic activities of producers, traders and persons supplying services. Nevertheless, Article 132 of that directive exempts certain activities from VAT (see, to that effect, judgments of 16 October 2008, Canterbury Hockey Club and Canterbury Ladies Hockey Club, C‑253/07, EU:C:2008:571, paragraph 15, and of 28 January 2010, Eulitz, C‑473/08, EU:C:2010:47, paragraph 24). 47 It should be recalled that according to the case-law on Article 13A(1) of the Sixth Directive, whose provisions correspond to those of Article 132(1) of Directive 2006/112, the purpose of Article 13A is to exempt certain activities in the public interest from VAT. However, that exemption does not cover every activity performed in the public interest, but only those which are listed in that provision and described in great detail (see the judgment in Horizon College, paragraph 14 and the case-law cited, and judgment of 28 January 2010, Eulitz, C‑473/08, EU:C:2010:47, paragraph 26). 48 It can be seen from the same case-law that the exemptions under Article 132 of Directive 2006/112 constitute independent concepts of EU law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see, to that effect, the judgment in Horizon College, paragraph 15 and the case-law cited, and judgment of 28 January 2010, Eulitz, C‑473/08, EU:C:2010:47, paragraph 25). 49 The terms used to specify those exemptions must be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person. Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT. Thus, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 132 of Directive 2006/112 should be construed in such a way as to deprive the exemptions of their intended effect (see, to that effect, the judgment in Horizon College, paragraph 16 and the case-law cited; and judgments of 19 November 2009, Don Bosco Onroerend Goed, C‑461/08, EU:C:2009:722, paragraph 25; and of 28 January 2010, Eulitz, C‑473/08, EU:C:2010:47, paragraph 27). 50 Article 132(1)(b), (g) and (i) of Directive 2006/112 contains no definition of the ‘closely related’ and ‘closely linked’ activities and services to which it refers. However, it is evident from the wording itself of the relevant provisions of Article 132 that they do not cover supplies of services with no link to ‘hospital and medical care’, ‘welfare and social security work’ or ‘the provision of children’s or young people’s education, school or university education, vocational training or retraining’ respectively. Accordingly, supplies of services can be considered to be ‘closely related’ to the latter services only where they are actually supplied as services ancillary to those services, which constitute the principal services (see, to that effect, the judgment in Horizon College, paragraphs 27 and 28 and the case-law cited). 51 It follows from the case-law that a service may be regarded as ancillary to a principal service if it does not constitute an end in itself, but a means of better enjoying the principal service (see, to that effect, judgments of 22 October 1998, Madgett and Baldwin, C‑308/96 and C‑94/97, EU:C:1998:496, paragraph 24; of 25 February 1999, CPP, C‑349/96, EU:C:1999:93, paragraph 30; and of 6 November 2003, Dornier, C‑45/01, EU:C:2003:595, paragraph 34; and also the judgment in Horizon College, paragraph 29). 52 In relation to the supply of staff in the education sector, the Court accordingly held, in paragraph 30 of the judgment in Horizon College, that, as the Commission had argued in that case, the supply of a teacher by one educational establishment to another in order for the teacher temporarily to carry out teaching duties under the responsibility of the latter establishment is an activity which can, in principle, be described as a ‘supply of services closely related to education’ within the meaning of Article 13A(1)(i) of the Sixth Directive because, where there is a temporary shortage of teachers in some educational establishments, making qualified teachers attached to other establishments available to those experiencing the shortage will enable students better to enjoy the education provided by the host establishments. 53 In the present action, the Commission is arguing nevertheless that the supply of staff referred to in the 2007 decree in the education sector cannot be regarded as a service ‘closely related’ to the education provided by the host bodies since, in contrast to the situation in the judgment in Horizon College, that supply is required to be structural rather than temporary, according to the conditions laid down in Paragraph 3(1)(b) of that decree. In such a situation, according to the Commission, the supply of staff cannot be found to be an ‘ancillary service’ within the meaning of the relevant provisions of Article 132(1) of Directive 2006/112, but is, on the contrary, an end in itself and, therefore, is in itself the principal service. Furthermore, in the Commission’s view, since Paragraphs 4(1) and 5(1) of the 2007 decree contain the same requirement, that the supply must be structural, in relation to the supply of staff in the sociocultural and health sectors, the same analysis applies mutatis mutandis where staff are made available in those sectors. 54 It should be noted in that respect that, although the judgment in Horizon College did indeed concern a temporary supply of staff, the fact that a supply of staff is temporary or structural cannot of itself determine whether the supply can be found to be a ‘closely related’ or ‘closely linked’ activity or service within the meaning of Article 132(1)(b), (g) and (i) of Directive 2006/112. According to the case-law summarised in paragraph 51 of this judgment, and as the Court held explicitly in paragraphs 29 and 30 of the judgment in Horizon College, all that is relevant for that purpose is in fact to ascertain whether the supply does not constitute an end in itself, but a means of better enjoying the principal service. 55 In support of its line of argument that the making available of staff envisaged by the 2007 decree in the sociocultural, health and education sectors is not a ‘closely related’ or ‘closely linked’ activity or service, the Commission merely emphasises that the supply is required to be structural, which, in its view, necessarily means that such a supply cannot under any circumstances be regarded as a service ancillary to a principal service. 56 However, the Commission has not provided any specific information to show in what respect the structural supply of staff as governed by the 2007 decree in the sectors at issue constitutes an end in itself instead of a means of better enjoying the principal service. In its application, the Commission confined itself to stating that it ‘appears’ that the supply of staff in the education sector constitutes an end in itself. According to the case-law summarised in paragraph 26 of this judgment, it is for the Commission to prove the alleged failure to fulfil obligations and in so doing may not rely on any presumptions. 57 Conversely, in its submissions the Kingdom of the Netherlands has set out in detail why, in its view, the structural supply to which the 2007 decree relates in the sociocultural, health and education sectors ensures the better provision of the principal service. Specifically, as can be seen from paragraphs 32 and 36 of this judgment, the Kingdom of the Netherlands has emphasised that the supply in question enables establishments active in those sectors to help each other in relation to staffing requirements and is a satisfactory means of attracting and retaining high-quality staff, thereby ensuring continuity and, accordingly, the quality of welfare and social security, health and educational services as the case may be. The Commission neither denied nor attempted to deny those assertions in its reply. 58 Admittedly, the Commission stated in its application that the supply of teaching staff in the context of the promotion of occupational mobility, which is covered by specific rules in the 2007 decree, is in essence a personnel management tool rather than a means of ensuring the best possible education, and that the supply must therefore be considered to be the main objective. 59 It should be noted however that, in support of that statement, the Commission merely asserts that this objective ‘is apparent’ from that decree but does not in any way substantiate the statement, and in particular does not explain in what respect such a supply, between educational establishments, cannot enable the better provision of teaching, even though the Kingdom of the Netherlands emphasises that the making available of staff in the education sector contributes to ensuring the quality of education, and even though Article 132(1)(i) of Directive 2006/112 explicitly refers to services closely related to ‘vocational training’ and ‘retraining’. 60 It follows that the Commission has not proved that the making available of staff envisaged by the 2007 decree in the sectors at issue constitutes an end in itself instead of a means of better enjoying the principal service. 61 Admittedly, in paragraphs 34 to 43 and 46 of the judgment in Horizon College, the Court specified that the exemption for the supply of staff as an activity ‘closely related’, in that case, to education, is, in any event, subject to three conditions, reflected in part in Articles 132 and 134 of Directive 2006/112, that is to say, in essence, first, that both that principal activity and the supply closely related to it are performed by organisations referred to in Article 132(1)(i) of that directive; second, that the supply in question is of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishment and, consequently, the education from which its students benefit, would have an equivalent value; and, third, that the basic purpose of such a placement is not to obtain additional income by carrying out a transaction which is in direct competition with commercial enterprises liable for VAT. 62 Nevertheless, here too the Commission has not sought to demonstrate that those three conditions are not satisfied in respect of the supply of staff envisaged by the 2007 decree in the education sector. Furthermore, even though the Commission takes the view that those conditions apply mutatis mutandis to the supply of staff in the sociocultural and health sectors, it has likewise not sought to demonstrate that they are similarly not satisfied in those situations. 63 It is true that the second condition that the Court set out in the judgment in Horizon College does not feature explicitly in the text of the 2007 decree. Nevertheless, in the light of the explanations provided by the Kingdom of the Netherlands referred to in paragraph 57 of this judgment, that fact, alone, is not sufficient to demonstrate that the supply of staff envisaged by that legislation in the sectors at issue is not of a nature and quality such that, without recourse to such a service, there could be no assurance that the services provided by the host establishment would have an equivalent value. 64 It follows from the foregoing that the first complaint must be rejected as unfounded. The second complaint, alleging infringement of Article 13 of Directive 2006/112, in relation to the fact that the supply of staff by bodies governed by public law to Euroregions and in connection with the promotion of occupational mobility is treated as not subject to VAT Arguments of the parties 65 The Commission submits that bodies governed by public law that supply staff in the context of promoting occupational mobility and to Euroregions should be regarded as taxable persons and therefore are not covered by Article 13 of Directive 2006/112. 66 Relying on the judgment of 12 September 2000, Commission v France (C‑276/97, EU:C:2000:424, paragraph 40), among others, the Commission notes that according to the Court’s case-law the treatment of bodies governed by public law as non-taxable persons depends primarily on how their activities are pursued, and that activities in which they engage as public authorities are those engaged in by those bodies under the special legal regime applicable to them and do not include activities pursued by them under the same legal conditions as those that apply to private traders and that, according to the judgment of 14 December 2000, Fazenda Pública (C‑446/98, EU:C:2000:691, paragraph 21), it is necessary in that regard to analyse the conditions laid down by national law for the pursuit of the activity at issue. 67 According to the Commission, it concluded as a result of such an analysis of the Netherlands legislation that the treatment of public bodies as non-taxable persons in the situations where staff are made available at issue here is not consistent with Article 13 of Directive 2006/112. Since the treatment as non-taxable persons depends on how the activities are pursued, the fact that the relationship between the official made available and the municipalities concerned is governed by the rules of public law does not in its view automatically mean that the official was made available by those municipalities in their capacity as public authorities. The large number of placement agencies in Europe clearly shows that the supply of staff is also subject to the rules of private law. 68 The Commission also states that it is not ‘totally convinced’ that the conditions that a supply of staff to a Euroregion must satisfy in order not to be subject to tax according to the 2007 decree prevent any distortion of competition. In its view, the fact that VAT does not apply to one segment of the staff supply market is likely to distort competition since the rest of the market cannot enjoy that treatment. Furthermore, according to the judgment of 16 September 2008, Isle of Wight Council and Others (C‑288/07, EU:C:2008:505, paragraphs 63 and 64), a potential effect on competition is also relevant. 69 The Kingdom of the Netherlands submits, in respect, first, of the supply of staff in the context of promoting occupational mobility, that the Commission has not clarified why that supply is not covered by Article 13 of Directive 2006/112. The conditions that must be satisfied for that supply not to be subject to tax are different from those applicable to the Euroregions. The action should therefore be dismissed on the grounds that the Commission has failed in its obligation to state reasons or, at the very least, this part of the action should be dismissed. 70 In any event, the Kingdom of the Netherlands asserts that the supply of staff at issue is carried out by a body acting as a public authority because in the context of that supply the official made available engages in acts of a public authority and because under the 2007 decree those supplies are subject to specific conditions that do not apply to individuals and whose objective is to ensure that only supplies whose actual purpose is to enable an official to acquire knowledge and experience at a different public body can enjoy that treatment. 71 Moreover, the Kingdom of the Netherlands is of the view that the Commission has not claimed, and even less demonstrated, that the fact that the supply at issue is not subject to tax is likely to distort competition. The staff in question are not made available in order to meet a demand for staff that private economic operators, such as placement agencies, might be able to satisfy, because the raison d’être of those supplies is to ensure that the staff of a body governed by public law acquire knowledge and experience at another body which they can then put to use at their own institutions. 72 In respect, second, of the supply of staff from bodies governed by public law to Euroregions, the Kingdom of the Netherlands asserts that the Commission has shown neither that the activities at issue are not activities in which those bodies engage as public authorities nor that the treatment of those bodies as non-taxable persons distorts competition. The action should therefore be dismissed on that ground. 73 In any event, the Kingdom of the Netherlands contends that the activities consisting of supplying staff to Euroregions are engaged in by bodies acting as public authorities. Indeed, in accordance with the Additional Protocol to the European Outline Convention on Transfrontier Co-operation between Territorial Communities or Authorities, for the purpose of cooperation, national officials are made available by their national public authorities to a transfrontier cooperation body in order to perform the responsibilities of a public authority assigned to that body by the national authorities. The making available of officials in that way is therefore not intended to meet a staffing requirement, but is an important means whereby the relevant territorial communities or authorities can cooperate within Euroregions and contribute to pursuing the public duties entrusted to those Euroregions. Moreover, according to the Kingdom of the Netherlands, the non-taxable supplies are subject to legal conditions that do not apply to private economic operators. 74 Furthermore, in respect of the condition that there must be no distortion of competition, the Kingdom of the Netherlands notes that the 2007 decree contains strict conditions to prevent distortion and that the staff supply activities at issue do not compete with those of private operators, such as placement agencies, because they concern the situation where a municipality makes specific staff available to Euroregions in order to participate actively in cooperation within Euroregions. Recruiting new staff via placement agencies is not an option that would meet that need. In respect of the likelihood of potential distortion of competition, according to the Kingdom of the Netherlands, the Commission has not submitted any element of fact or law showing that the exempt activities are carried on, either actually or potentially – in the sense of there being a real possibility – in competition with private economic operators. Findings of the Court 75 By this complaint, the Commission asserts that the supply of staff by bodies governed by public law to Euroregions and in the context of promoting occupational mobility, as envisaged by the 2007 decree, does not fall within the provisions of Article 13(1) of Directive 2006/112 whereby it is not subject to tax, because that placement activity is not engaged in by bodies governed by public law ‘as public authorities’ within the meaning of the first subparagraph of Article 13(1) and because, in any event, their treatment as non-taxable persons ‘would lead to significant distortions of competition’ within the meaning of the second paragraph of Article 13(1). The bodies subject to public law that make those officials available should therefore be regarded as ‘taxable persons’ within the meaning of Article 9 of that directive and, therefore, those supplies should be subject to VAT under Article 2(1)(c) and Article 24(1) of that directive. 76 As a preliminary point, it should be noted that, as can be seen from the scheme and purpose of Directive 2006/112, as well as from the place of Article 13 of that directive in the common system of VAT established by the Sixth Directive, any activity of an economic nature is, in principle, to be taxable. As a general rule and in accordance with Article 2(1) of Directive 2006/112, the supply of services for consideration, including those supplied by bodies governed by public law, is to be subject to VAT. Articles 9 and 13 of Directive 2006/112 thus give a very wide scope to VAT (see, to that effect, judgments of 16 September 2008, Isle of Wight Council and Others, C‑288/07, EU:C:2008:505, paragraphs 25 to 28 and 38, and of 16 July 2009, Commission v Ireland, C‑554/07, not published, EU:C:2009:464, paragraph 39). 77 However, by derogation from that general rule, a number of activities of an economic nature are not subject to VAT. One such derogation is established in the first subparagraph of Article 13(1) of Directive 2006/112, according to which activities engaged in by bodies governed by public law acting as public authorities are not subject to that tax. However, even where those bodies carry out such activities as public authorities, they must be considered taxable persons, in accordance in particular with the second subparagraph of Article 13(1) of Directive 2006/112, where their treatment as non-taxable persons would lead to significant distortions of competition (see, to that effect, judgments of 16 September 2008, Isle of Wight Council and Others, C‑288/07, EU:C:2008:505, paragraphs 30 and 31, and of 4 June 2009, SALIX Grundstücks-Vermietungsgesellschaft, C‑102/08, EU:C:2009:345, paragraphs 62 and 63). 78 In the present case, it is therefore necessary to examine initially whether the Commission has established that the supply of staff envisaged by the 2007 decree to Euroregions and in the context of promoting occupational mobility is not engaged in by ‘bodies governed by public law … as public authorities’ within the meaning of the first subparagraph of Article 13(1) of Directive 2006/112. If it is found that it has not done so it will be necessary to ascertain thereafter whether the Commission has established that the fact that those bodies are treated as non-taxable persons ‘would lead to significant distortions of competition’ within the meaning of the second subparagraph of Article 13(1). 79 In relation, first, to the first subparagraph of Article 13(1) of Directive 2006/112, the Court has held on numerous occasions that two conditions must be cumulatively fulfilled in order for that provision to apply: the activities must be carried out by a body governed by public law and they must be carried out by that body acting as a public authority (see, to that effect, judgments of 16 September 2008, Isle of Wight Council and Others, C‑288/07, EU:C:2008:505, paragraph 19 and the case-law cited, and of 16 July 2009, Commission v Ireland, C‑554/07, EU:C:2009:464, paragraph 41). 80 It should be noted that, in its action, the Commission has not disputed that the supply of staff envisaged by the 2007 decree to Euroregions and in the context of promoting occupational mobility is engaged in by ‘bodies governed by public law’ within the meaning of the first subparagraph of Article 13(1) of Directive 2006/112. 81 In those circumstances, it is necessary to examine whether the Commission has established that those bodies governed by public law do not engage in that supply ‘as public authorities’ within the meaning of the same provision. 82 According to the case-law on the first subparagraph of Article 4(5) of the Sixth Directive, whose content correspond to that of the first subparagraph of Article 13(1) of Directive 2006/112, those provisions envisage the situation in which bodies governed by public law engage, as entities subject to public law, under the special regime applicable to them, in activities or transactions which may also be engaged in, in competition with them, by private individuals under a regime governed by private law or on the basis of administrative concessions. On the other hand, when those bodies governed by public law act under the same legal conditions as those that apply to private traders, they cannot be regarded as engaging in those activities or transactions ‘as public authorities’ (see, inter alia, judgments of 17 October 1989, Comune di Carpaneto Piacentino and Others, 231/87 and 129/88, EU:C:1989:381, paragraph 16, and of 8 June 2006, Feuerbestattungsverein Halle, C‑430/04, EU:C:2006:374, paragraph 24). 83 It should be noted that, in support of its line of argument on that point, in its action the Commission merely summarises the foregoing case-law of the Court but does not in any way apply it to the Netherlands legislation at issue, by establishing or even seeking to establish that the bodies governed by public law that make staff available to Euroregions or in the context of promoting occupational mobility under the 2007 decree act under the same legal conditions as a private trader within the meaning of the Court’s case-law (see, by analogy, judgment of 12 September 2000, Commission v Netherlands, C‑408/97, EU:C:2000:427, paragraph 37). 84 The fact, briefly alluded to by the Commission, that there are a large number of private operators in Europe, such as placement agencies, which supply staff under private law rules, is irrelevant in that respect. Indeed, that fact does not in the slightest demonstrate that the supply of staff to Euroregions or in the context of promoting occupational mobility referred to by the 2007 decree is engaged in by the bodies governed by public law at issue under the same legal conditions as those that apply to private traders rather than under the special legal regime applicable to them, and at the very most confirms that the activities engaged in by those bodies ‘as public authorities’ may be engaged in in competition with private individuals operating under a regime governed by private law. 85 It should be noted, moreover, that, as can be seen from paragraphs 70 and 73 of this judgment, in its written submissions the Kingdom of the Netherlands has given a detailed and reasoned explanation of how the supply of staff to Euroregions and in the context of promoting occupational mobility is engaged in by the bodies governed by public law at issue in their capacity as public authorities. 86 In particular, that Member State emphasised that under the 2007 decree, as its wording shows, those supplies of staff are subject to specific conditions that do not apply to individuals and are intended, as regards the promotion of occupational mobility, to ensure that only supplies whose purpose is to enable an official to acquire knowledge and experience at a different public body can benefit from not being subject to VAT. 87 The Kingdom of the Netherlands has also explained that the supply of staff to Euroregions was not intended to meet a staffing requirement, but was purely an important means whereby the participating municipalities and provinces could cooperate within Euroregions and contribute to performing the public duties entrusted to those Euroregions. 88 The Commission neither denied nor attempted to deny those explanations which in part are even apparent from the text of the 2007 decree itself. 89 It must therefore be found that the Commission has failed to place before the Court the information needed to enable it to establish the alleged failure to fulfil obligations in relation to the condition that the relevant bodies must engage in an activity as ‘public authorities’ within the meaning of the first subparagraph of Article 13(1) of Directive 2006/112. 90 In relation, second, to the second subparagraph of Article 13(1) of Directive 2006/112, it should be recalled that, according to that provision, a body governed by public law acting as a public authority must be regarded as a ‘taxable person’ where its treatment as a non-taxable person is likely to lead to significant distortions of competition. What is envisaged here is therefore the situation in which bodies governed by public law engage in activities which may also be engaged in, in competition with them, by private economic operators. The aim is to ensure that those private operators are not placed at a disadvantage because they are taxed while those bodies are not (see, to that effect, judgment of 17 October 1989, Comune di Carpaneto Piacentino and Others, 231/87 and 129/88, EU:C:1989:381, paragraph 22). 91 The Court has stated, inter alia, that the significant distortions of competition, to which the treatment as non-taxable persons of bodies governed by public law acting as public authorities would lead, must be evaluated by reference to the activity in question, as such, without such evaluation relating to any market in particular, and by reference not only to actual competition, but also to potential competition, provided that the possibility of a private operator entering the relevant market is real and not purely hypothetical (see, to that effect, judgment of 16 September 2008, Isle of Wight Council and Others, C‑288/07, EU:C:2008:505, paragraphs 53 and 65). 92 It should be noted in that respect that, in its action, the Commission confined itself to stating that it is not ‘totally convinced’ that the conditions laid down by the Netherlands legislation for a body to be not subject to VAT prevent any distortion of competition. However, the Commission has not provided any information in support of that statement, in particular to demonstrate that the alleged possibility that competition with the activities engaged in by private operators such as placement agencies would be distorted is real and not purely hypothetical (see, by analogy, judgment of 8 March 2001, Commission v Portugal, C‑276/98, EU:C:2001:133, paragraph 28). 93 Conversely, as can be seen from paragraphs 71 and 74 of this judgment, in its written submissions the Kingdom of the Netherlands has given a detailed and reasoned explanation of how the supply of staff to Euroregions and in the context of promoting occupational mobility, governed by the 2007 decree, cannot be regarded as being pursued in competition with the placement activities engaged in by private operators. Specifically, that Member State asserted that, in essence, given the specific nature of the requirements which the supply in question is to meet, using private agencies to recruit staff is not a viable option. The Commission neither denied nor attempted to deny those explanations. 94 It should therefore be found that the Commission has failed to place before the Court the information needed to enable it to establish the alleged failure to fulfil obligations in relation to the condition that there must be a ‘significant distortion of competition’ within the meaning of the second subparagraph of Article 13(1) of Directive 2006/112. 95 Accordingly, the second complaint must be rejected as unfounded. 96 In the light of the foregoing, the action should be dismissed in its entirety. Costs 97 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. As the Kingdom of the Netherlands has applied for an order for costs against the Commission and the latter has been unsuccessful, the Commission must be ordered to bear the costs. On those grounds, the Court (Second Chamber) hereby: 1. Dismisses the action; 2. Orders the European Commission to pay the costs. [Signatures] * Language of the case: Dutch.