Opinion of the Advocate General — ECLI:EU:C:2001:49
Date: 2001-01-23
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment 
1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Exemptions provided for by the Sixth Directive — Exemption for ­
tbe letting of immovable property — Meaning — Payment of a sum of money by the 
landlord to the future tenant — Excluded 
(Council Directive 77/388, Art. 13B(b)) 
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SUMMARY — CASE C-409/98 
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 of immovable property — Meaning — Option agreement in relation to 
leases of immovable property in return for a sum of money paid by the landlord —· 
Excluded 
(Council Directive 77/388, Art. 13B(b)) 
1. The letting of immovable property for 
the purposes of Article 13B(b) of the 
Sixth Directive 77/388 on the harmo­
nisation of the laws of the Member 
States relating to turnover taxes essen­
tially involves the landlord of property 
assigning to the tenant, in return for 
rent and for an agreed period, the right 
to occupy his property and to exclude 
other persons from it. It is thus the 
landlord who makes a taxable supply 
of services and the tenant who, in 
return for the supply, pays considera­
tion. Therefore, a person who does not 
initially have any interest in the immo­
vable property and who enters into an 
agreement for lease of that immovable 
property with a landlord and/or 
accepts the grant of a lease of the 
property in return for a sum of money 
paid by the landlord does not make a 
supply of services falling within Arti­
cle 13B(b) cited above. 
(see paras 31-32, 36 
and operative part 1) 
2. A person who does not initially have 
any interest in the immovable property 
and who enters into an option agree­
ment in relation to leases of that 
immovable property in return for a 
sum of money paid by the landlord, on 
terms that the money will remain in a 
special account as security for its 
obligations under the option agree­
ment, and who subsequently exercises 
the options under the option agreement 
and accepts the grant of leases of the 
immovable property in return for the 
release of the money in its special 
account, at no time makes a supply of 
services falling within Article 13B(b) of 
the Sixth Directive 77/388 on the 
harmonisation of the laws of the 
Member States relating to turnover 
taxes. 
(see para. 39 
and operative part 2) 
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