Judgment — ECLI:EU:C:2006:124
Date: 2006-02-21
Language of the case: English
Court formation: Grand Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Concepts: Economic activity;Supply of services;Supply of goods
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Supplies of goods – Supplies of services (Council Directive 77/388, Arts 2(1), 4(1) and (2), 5(1), and 6(1)) Transactions constitute supplies of goods or services and an economic activity within the meaning of Article 2(1), Article 4(1) and (2), Article 5(1) and Article 6(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, provided that they satisfy the objective criteria on which those concepts are based, even if they are carried out with the sole aim of obtaining a tax advantage, without any other economic objective. The terms ‘taxpayer’ and ‘economic activities’ and the terms ‘supply of goods’ and ‘supply of services’ show that those terms, which define taxable transactions under the Sixth Directive, are all objective in nature and apply without regard to the purpose or results of the transactions concerned. In that regard, an obligation on the tax authorities to carry out inquiries to determine the intention of the taxable person would be contrary to the objectives of the common system of value added tax of ensuring legal certainty and facilitating application of value added tax by having regard, save in exceptional cases, to the objective character of the transaction in question. Whilst it is true that the objective criteria referred to above are not satisfied where tax is evaded, for example by means of untruthful tax returns or the issue of improper invoices, the fact nevertheless remains that the question whether the transaction concerned is carried out for the sole purpose of obtaining a tax advantage is entirely irrelevant in determining whether it constitutes a supply of goods or services and an economic activity. (see paras 47-49, 51, 53, operative part)