Opinion of the Advocate General — ECLI:EU:C:2011:428
Date: 2011-06-28
Language of the case: German
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Supply of services — Determination of the place of reference for tax purposes — Supply of staff — Definition (Council Directive 77/388, Art. 9(2)(e), sixth indent) 2. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Deduction of input tax (Council Directive 77/388) 3. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Deduction of input tax (Council Directive 77/388, Arts 17(1), (2)(a), (3)(a), and 18(1)(a)) 1. On a proper construction of the sixth indent of Article 9(2)(e) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, the ‘supply of staff’ referred to in that provision also includes the supply of self-employed persons not employed by the trader providing the service. In so far as that interpretation confines the place where the services concerned are deemed to have been supplied to a single place, it makes it possible precisely to prevent double taxation of the supply of services or the latter’s escaping all charging of value added tax. Likewise, this interpretation is of such a kind as to make it easier to give effect to that conflict-of-laws rule, by making it possible simply to operate, at the place where the services are supplied, the rules governing the collection of taxes and the prevention of tax avoidance, since the recipient of the services has no need to enquire as to the legal nature of the relations between the supplier and the ‘staff’ being supplied. Furthermore, that interpretation is consistent with the principle of legal certainty for, by making more predictable the determination of the place where the service is deemed to be supplied, it simplifies the application of the provisions of the Sixth Directive and contributes to ensuring accurate and reliable collection of value added tax. (see paras 29-32, operative part 1) 2. For want of any Union legislation, it is for the domestic legal system of every Member State, in particular, to designate the competent authorities and to lay down detailed procedural rules for safeguarding the rights that individuals derive from Union law, provided that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and that they do not render impossible in practice or excessively difficult the exercise of rights conferred by the Union legal order (principle of effectiveness). As regards the principle of effectiveness, there being no specific rules in national procedural law, the right of the service provider and that of the recipient of the service, consisting in being treated identically with regard to taxability and liability to value added tax in respect of one and the same service, would in practice be rendered totally ineffective. (see paras 35, 37) 3. Articles 17(1), 17(2)(a), 17(3)(a) and 18(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as not requiring the Member States to amend their domestic procedural rules in such a way as to ensure that the taxability and liability to value added tax of a service are assessed consistently in relation to the provider and in relation to the recipient of that service, even though they fall within the jurisdiction of different tax authorities. However, those provisions do require the Member States to adopt the measures necessary to ensure that value added tax is collected accurately and that the principle of fiscal neutrality is observed. Even though Articles 17(1), 17(2)(a), 17(3)(a) and 18(1)(a) of the Sixth Directive do not specify in concrete terms the content of the procedural or other measures that must be taken in order to ensure that value added tax is collected accurately and that the principle of fiscal neutrality is observed, the fact none the less remains that those provisions bind the Member States as regards the objective to be achieved, while leaving them with some discretion when determining whether it is necessary to adopt such measures. In that regard, were it to be found that, even if there were no questions of interpretation or validity or if the competent courts or tribunals were to refuse to refer to the Court of Justice, for a preliminary ruling, questions on the interpretation or validity of European Union law, various administrative authorities and/or courts of a Member State were continuing systematically to adopt divergent positions so far as concerns the place where one and the same service is deemed to be supplied with regard to the provider, on the one hand, and the recipient, on the other, so as to jeopardise the principle of fiscal neutrality, the obligations imposed on that Member State under the Sixth Directive could be considered to have been breached. (see paras 43-45, operative part 2)