Judgment;Summary — ECLI:EU:C:2024:604
Date: 2024-07-11
Language of the case: Polish
Court formation: Eighth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Translation C-182/23 – 1 
Case C-182/23 
Request for a preliminary ruling 
Date lodged: 
22 March 2023 
Referring court: 
Naczelny Sąd Administracyjny (Poland) 
Date of the decision to refer: 
18 January 2023 
Applicant: 
Director of the Krajowa Informacja Skarbowa 
Defendant: 
J.S. 
  
… 
DECISION 
of 18 January 2023 
The Naczelny Sąd Administracyjny (Supreme Administrative Court, 
Poland) … [composed of] 
upon consideration on 18 January 2023 
at a closed session in the Izba Finansowa (Finance Chamber) 
concerning an appeal on a point of law brought by the Director of the Krajowa 
Informacja Skarbowa (National Tax Information Centre) 
against the decision of the Wojewódzki Sąd Administracyjny w Warszawie 
(Regional Administrative Court, Warsaw) 
of 15 October 2018 … 
in the case of the proceedings brought by J.S. 
EN 
REQUEST FOR A PRELIMINARY RULING OF 18. 1. 2023 – CASE C-182/23 
 
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in respect of the individual interpretation of the Director of the National Tax 
Information Centre 
of 31 October 2017 … 
concerning value added tax 
decides: 
1. pursuant to Article 267 … [TFEU], to refer the following question to the 
Court of Justice for a preliminary ruling: 
‘Do the provisions of Article 9(1) of Directive 2006/112/EC of 
28 November 2006 on the common system of value added tax (OJ 2006 
L 347, p. 1, as amended), in conjunction with Article 14(2)(a) thereof, allow 
a farmer who is liable to pay VAT under general rules and who transfers the 
ownership of a plot of land to the State Treasury under an expropriation 
procedure in exchange for compensation related to the change of its intended 
use for non-agricultural purposes to be regarded as a taxpayer obliged to pay 
VAT on that compensation due solely to the fact that the plot was earlier 
used for agricultural activities subject to VAT?’ 
2. … [stay of proceedings] 
GROUNDS 
I. Legal framework 
1. EU law: 
The provisions of Directive 2006/112/EC of 28 November 2006 on the common 
system of value added tax (OJ 2006 L 347, p. 1, as amended) (‘Directive 
2006/112/EC’): 
Article 9(1): ‘Taxable person’ shall mean any person who, independently, carries 
out in any place any economic activity, whatever the purpose or results of that 
activity. 
Any activity of producers, traders or persons supplying services, including mining 
and agricultural activities and activities of the professions, shall be regarded as 
‘economic activity’. The exploitation of tangible or intangible property for the 
purposes of obtaining income therefrom on a continuing basis shall in particular 
be regarded as an economic activity. 
Article 14(1): ‘Supply of goods’ shall mean the transfer of the right to dispose of 
tangible property as owner. 
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Article 14(2): In addition to the transaction referred to in paragraph 1, each of the 
following shall be regarded as a supply of goods: 
(a) the transfer, by order made by or in the name of a public authority or in 
pursuance of the law, of the ownership of property against payment of 
compensation; … 
2. National law: 
Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług (Law of 11 March 
2004 on value added tax) (consolidated text, Dz. U. (Polish Journal of Laws) of 
2022, item 931, as amended), (‘the Law on VAT’): 
Article 7(1): Delivery of the goods referred to in Article 5(1)(1) means the transfer 
of the right to dispose of goods as the owner, including the following: 
(1) transfer by order of a public authority or entity acting on behalf of such an 
authority, or transfer, by operation of law, of ownership of the goods in exchange 
for compensation; 
Article 15(1): Legal persons, organisational units without legal personality and 
natural persons performing independent economic activity as referred to in 
paragraph 2, are, irrespective of the purpose or result of such activity, to be 
regarded as taxpayers. 
Article 15(2): The term ‘economic activity’ covers all activities of producers, 
traders or persons supplying services, including entities acquiring natural 
resources, and farmers, as well as the activities of persons engaged in liberal 
occupations. The term ‘economic activity’ shall cover, in particular, activities 
consisting of the use of goods or intangible assets on a continuing basis for 
commercial purposes. 
II. Facts 
1. Procedure before the tax authorities. 
1.1. J.S. (‘the applicant’ or ‘the complainant’) requested the Director of the 
National Tax Information Centre (‘the DIKS’, ‘the interpretative body’) to issue 
an individual interpretation of provisions of tax law concerning value added tax. 
In the application for the issuance of an individual interpretation, he presented the 
following position in the case. 
Since 8 December 2001, the applicant has been running a farm with an area of 
approximately […] hectares. Since October 2015, he has been running the farm 
together with his wife. The object of the farming activity is the production of milk 
and the breeding of dairy cattle. The applicant has been registered as an active 
VAT taxpayer since January 2013. Plots No. […], […] were purchased by the 
REQUEST FOR A PRELIMINARY RULING OF 18. 1. 2023 – CASE C-182/23 
 
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applicant on 17 June 2003, while plots No. […], […] and […] were also 
purchased by the applicant on 11 May 2015. Both the purchase of 17 June 2003 
and the purchase of 11 May 2015 were made with a view to expanding 
agricultural activities. There was no value added tax on the purchase of the plots, 
with the result that no VAT deduction was made. The purchased land was used 
exclusively for agriculture as part of agricultural economic activity. The applicant 
and his wife do not carry out any economic activity other than farming. 
As a result of the final decision of the Wojewoda (Regional Governor) to carry out 
a road construction project, pursuant to Article 12(4)(1) of ustawa z dnia 10 
kwietnia 2003 r. o szczególnych zasadach przygotowania i realizacji inwestycji w 
zakresie dróg publicznych (Law of 10 April 2003 on special rules for the 
preparation and implementation of projects in the field of public roads (Dz. U. 
2015, item 2031 (‘the Law on Roads’)), the properties taken over for the project, 
by operation of law, were surveyed and parcelled out, and transferred to the State 
Treasury. In the light of the above, in the course of the proceedings by Regional 
Governor M. to issue permission to carry out a road construction project, road 
plots No. […] and […] were parcelled out from plots No. […] and […], and road 
plots No. […], […] and […] were parcelled out from plots No. […], […] and […], 
and which, on the date when the decision of Regional Governor M. No. […] of 
6 March 2017 became final, became the property of the State Treasury, intended 
for road construction. 
In the light of the above, the Regional Governor initiated proceedings to 
determine the compensation due the applicant for the plots compulsorily 
purchased by the State Treasury, and issued corresponding decisions granting 
compensation. However, the compensation has not yet been paid. 
Until the plots were taken over by the State Treasury, they were used for 
agricultural purposes as grazing and pasture land; however, in connection with the 
administrative proceedings initiated by Regional Governor M. regarding 
permission to carry out a road construction project and the related survey and 
parcelling out of the plots and their planned purchase by the State Treasury for 
road construction, the applicant did not prepare those plots for harvesting grass for 
the following year. 
Prior to the initiation of the abovementioned proceedings by the Regional 
Governor, these plots had not been divided into smaller plots, developed with 
utilities or improved in any other way. They have never been rented, leased or lent 
to third parties. The applicant did not apply for the conversion of those plots for 
non-agricultural purposes, in particular, for road purposes, and did not apply for a 
change in the spatial development plan for these plots, did not seek to determine 
the route of a road through these plots, and has never been involved in real-estate 
activities. 
Furthermore, the applicant and his wife did not purchase any building plots. The 
plots compulsorily purchased by the State Treasury were covered by direct 
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subsidies, but as their intended use was for the construction of a road, they were 
withdrawn from the subsidies. The applicant and his wife are registered in KRUS 
(the Kasa Rolniczego Ubezpiecenia Społeczenia (Social Insurance Fund for 
Farmers)) and pay agricultural tax. 
In addition, the applicant did not divide up the land. The parcelling-out took place 
by operation of law and irrespective of the owner’s will as a result of an 
administrative body issuing a decision to carry out a road construction project 
under the Law on Roads. In the same manner, irrespective of the owner’s 
intention, there was a loss of ownership. 
The local development plan has not changed in any way, whether as a result of 
parcelling out the land intended for the road or as a result of the road’s 
construction. The acquisition of land for the construction of a road in accordance 
with the law described above takes place irrespective of the intended use specified 
in the local spatial development plan. 
According to the local spatial development plan, plots … (before division) were 
located in the village of G., district G. […], commune G. and had the following 
designation: 
- from the regional road … for the widening of the road, the remaining areas are 
areas of single-family housing development and commercial services marked on 
the plan with the symbol […]. 
The applicant also indicated that plots … (before division) were marked in the 
land register as agricultural land and ditches, and that the district authority office 
had made no changes to the allocation of plots in the land register until the date of 
the application. 
In the light of these facts, the Applicant posed the following questions in the 
application for interpretation: 
(1) Is the applicant, as a result of the State Treasury’s compulsory purchase of the 
land of plots No. … for road construction under Article 12(4)(1) of the Law on 
Roads of 10 April 2003 in exchange for compensation, regarded as a person liable 
to pay VAT? 
(2) Will the compensation for the above be subject to value added tax? 
At the same time, in the application for an individual interpretation, the applicant 
presented his own position on the matter, claiming that he should not be deemed 
liable to pay VAT in the case of the State Treasury’s compulsory purchase order 
for land of plots No. … for the construction of a road pursuant to Article 12(4)(1) 
of the Law on Roads of 10 April 2003 in return for compensation, and thus, any 
compensation paid to him should not be subject to value added tax. 
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1.2. In the individual interpretation of 31 October 2017, the DKIS considered the 
applicant’s position to be incorrect. It found that the transfer of the ownership of 
the plots of land specified in application … to the State Treasury under an 
expropriation procedure, in connection with their intended use for a public road 
construction project, should be regarded as a supply made by the applicant as an 
entity conducting business activity within the meaning of Article 15(2) of the Law 
on Roads, namely as a VAT taxpayer. In the opinion of the authority, the 
applicant’s supply does not, in this case, constitute an exercise of the right to 
dispose of private property. The DKIS submitted that, as shown in the application, 
plots of land … were used by the applicant, who was a registered active VAT 
taxpayer, in his business activity. It found that the transfer of ownership of the 
agricultural land referred to in the application in return for compensation 
constituted – contrary to what the applicant claimed – a paid delivery of goods, 
which is subject to the provisions of the Law on VAT based on the cited 
Article 7(1)(1) of that Law, that is to say, it is subject to taxation. Thus, the DKIS 
found the position of the applicant to be incorrect. 
III. Proceedings before the administrative courts 
1. By way of judgment of 15 October 2018, case reference No III SA/Wa 
23/18, the Regional Administrative Court in Warsaw overturned the contested 
individual interpretation. 
The court held that the authority did not take into account the argument presented 
by the complainant that, before the transfer of ownership of the property, the 
complainant did not use his property as grazing land for economic activity, 
because he had transferred that land to his private property, was not preparing it 
for harvesting grass for the following year, and had excluded it from direct 
subsidies. 
The court of first instance found that even if the party had not transferred the 
agricultural properties specified in the application to private property before the 
expropriation under the Law on Roads, the taxpayer still could not be assigned the 
status of a VAT taxpayer in regard to the compensation received under 
Article 15(2) of the Law on VAT. 
In the grounds of the contested judgment, the court highlighted that the 
complainant had not taken any actions aimed at selling the plots, and that there 
had in fact been actions independent of his will (expropriation). The court 
accordingly found that the expropriation of the land on which the complainant ran 
his farm was unrelated to his agricultural activity, and that the complainant was 
not a VAT taxpayer and was not engaged in real-estate activities. 
2. In the appeal on a point of law, the DIKS has requested that the contested 
judgment be overturned in its entirety and that the merits of the case be ruled on, 
or alternatively, that the contested judgment be overturned in its entirety and the 
case be referred back for reconsideration by the court that had issued it. In 
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addition, the authority formulated, inter alia, allegations of a breach of the 
provisions of substantive law, namely Article 15(1)(2) of the Law on VAT, 
through the erroneous interpretation consisting of the assumption that the 
complainant, conducting agricultural economic activity in relation to the purchase 
of real estate on 17 April 2003 and 11 May 2015, and its subsequent sale in 
connection with an expropriation in exchange for compensation, could not be 
assigned the status of a VAT taxpayer, whereas these were, in fact, activities 
related to the applicant’s professional agricultural business activity consisting of 
the commercial use of land (goods) in agricultural activity, and that these 
activities should be regarded as a paid delivery of goods for commercial purposes, 
and thus the correct interpretation of the provision in relation to the described 
event should have led the court to the conclusion that the complainant, acting as a 
VAT taxpayer, was subject to a tax liability in respect of the compensation 
received. 
IV. Reasons for the National Court (NSA) requesting a preliminary ruling 
1. In submitting the request, the Supreme Administrative Court wishes to 
obtain an answer from the Court of Justice as to whether the position of the 
interpretative body is correct, namely that the transfer of ownership of real estate 
expropriated to the State Treasury, in connection with its intended use for a public 
road construction project, should be regarded as a delivery of goods made by the 
complainant as an entity conducting business activity due to the fact that the 
complainant, being a registered active VAT taxpayer, used the real estate in his 
agricultural activities. 
2. At the outset, the Supreme Administrative Court notes that the description of 
the presented facts did not indicate any activity related to the use of the real estate 
as personal, private property. Therefore, the referring court omitted the 
circumstance of the earlier transfer of plots for private purposes, as argued by the 
court of first instance. 
What is crucial, however, is to decide whether the use of plots for agricultural 
activities taxed under general rules entailed that the handing over of real estate in 
connection with its expropriation took place as part of agricultural activities liable 
to VAT. The interpretative body found that the conduct of taxable agricultural 
activity was of key importance for recognising that the sale of real estate used for 
this agricultural activity under expropriation was subject to taxation. The court of 
first instance was of the opposite opinion, and decided that only active economic 
activities in the field of real estate could result in taxation of the contested sale of 
real estate under expropriation. 
3. There can be no doubt that taxation will arise where the party concerned 
takes active steps to market property that would allow him to be regarded as a 
professional (see judgment of the Court of Justice of the European Union of 
15 September 2011, delivered in Joined Cases C-180/10 and C-181/10, Słaby and 
REQUEST FOR A PRELIMINARY RULING OF 18. 1. 2023 – CASE C-182/23 
 
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Others, EU:C:2011:589). In the case in question, it is undisputed that the 
complainant had not taken any actions aimed at selling the plots, and that there 
had in fact been actions independent of his will (expropriation). Therefore, the 
court of first instance found that the expropriation of the land on which the 
complainant ran his farm was unrelated to his agricultural activity, and that the 
complainant is not a VAT taxpayer and does not run a real-estate business. The 
facts resulting from the request for interpretation also do not indicate that the 
complainant undertook such activity in relation to other properties that are not the 
subject of the expropriation. 
National case-law emphasises that a prerequisite for VAT on a given transaction is 
not the mere fact of an entity being a VAT taxpayer, but the act of being a VAT 
taxpayer in relation to the specific transaction coming within the scope of the 
economic activity of the given entity (see judgment of the Supreme 
Administrative Court of 29 October 2007, case reference number I FPS 3/07, 
according to which ‘neither the formal status of a given entity as a registered 
taxpayer, nor the fact that a given activity was performed repeatedly, or once but 
with the intention of being frequent, can determine the taxation of this activity 
without each time determining that in relation to this specific activity, this entity 
acted as a taxpayer of value added tax’). 
The position that the expropriation of the disputed plots took place outside the 
course of business activity is supported by the fact that there was no value added 
tax incurred when the plots were purchased by the applicant and, therefore, no tax 
deduction was made. 
On the other hand, the interpretative body introduced an important argument, 
namely that the court of first instance did not take into account the specific nature 
of the expropriation as a forced act, often carried out against the will and 
intentions of the entities whose property is purchased under expropriation. In this 
regard, the complainant’s activity in relation to the disputed plots is not relevant. 
However, it is worth noting that the applicant did not undertake activity in real 
estate trade not only in relation to the disputed plots, but also in relation to other 
real estate and, furthermore, did not conduct any economic activity other than the 
agricultural activity subject to VAT. 
4. For those reasons, the national court, pursuant to Article 267 TFEU, has 
decided as per subparagraph 1 of the operative part of this order. 
… [stay of proceedings] 
… [signatures]