Opinion of the Advocate General — ECLI:EU:C:2007:201
Date: 2007-03-29
Language of the case: Spanish
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary of the Judgment 1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive (Council Directive 77/388, Art. 15(5)) 2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive (Council Directive 77/388, Art. 15(5) and (13)) 1. Article 15(5) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 92/111, which exempts the chartering of vessels used for navigation on the high seas, must be interpreted as covering both full chartering and partial chartering of such vessels. Therefore, that provision precludes national legislation which grants the benefit of the exemption from value added tax only in the case of full chartering of such vessels. In the context of international business, the exemption from VAT under Article 15 of the Sixth Directive of transactions for export outside of the Community, equivalent transactions and international carriage seeks to respect the principle that the relevant goods or services should be taxed at their place of destination. Every export and equivalent transaction should thus be exempt from VAT in order to ensure that the relevant transaction is taxed only in the place where the relevant products are consumed. National legislation with limits VAT exemption to full chartering alone makes the benefit of that exemption subject to the size of the vessel used for the chartering, as the same volume of freight may be subject to VAT or exempt depending on whether the volume of freight fills all or only part of the vessel’s capacity. Such a condition deprives the exemption of chartering set out in Article 15(5) of the Sixth Directive of its effectiveness. In those circumstances, while it is the case that the words used to describe the exemption set out in Article 15(5) of the Sixth Directive must be strictly interpreted, to maintain a particularly strict interpretation of the concept of chartering would lead to misconstruing both the wording and the objective of that provision. (see paras 29, 31-33, operative part 1) 2. A chartering contract within the meaning of Article 15(5) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 92/111, differs from a contract for the carriage of goods in that it requires one party, the ship-owner, to make available to the other party, the charterer, all or part of the vessel, whereas, in the case of a contract for the carriage of goods, within the meaning of Article 15(13) of the Sixth Directive, the undertaking which the carrier assumes towards the customer relates only to the transport of those goods. It is for the national court to take into account the relevant circumstances in which a chartering transaction took place, to seek its characteristic elements in order to be able to decide if that transaction should be considered as chartering or as a provision of services for the carriage of goods. In particular, that court must take account of the terms of the contract concluded between the parties and the specific nature and content of the service provided in order to determine whether that contract satisfies the conditions of a chartering contract within the meaning of Article 15(5) of the Sixth Directive. Such an assessment of the legal nature of the contract at issue proves necessary, moreover, in order to ensure the correct and straightforward application of the exemptions provided for by the Sixth Directive and to prevent any possible evasion, avoidance or abuse in the implementation of that directive. (see paras 37-40, operative part 2)