Opinion of the Advocate General — ECLI:EU:C:2008:769
Date: 2008-12-22
Language of the case: Dutch
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Netherlands

summary of the facts by the Hoge Raad der Nederlanden that VNLTO carries out not only taxable activities, but also non‑taxable activities, namely, promotion of the general interests of its members. That court also pointed out that the acquisition of goods and services by VNLTO was entered in the accounts as general costs of VNLTO, without those transactions being exclusively allocated to output taxable activities carried out by VNLTO. 31 In view of that factual situation, and in the light of the application by VNLTO for deduction of amounts of VAT paid on the acquisition of the goods and services both for taxable activities and for activities not linked to taxable activities, namely activities consisting in the promotion of the general interests of its members, the national court is uncertain whether those latter activities could be regarded as having been performed ‘for purposes other’ (within the meaning of Article 6(2)(a) of the directive) than those carried out by the association in the economic field. 32 In its observations, the national court referred to, inter alia, Case C‑434/03 Charles and Charles‑Tijmens [2005] ECR I‑7037, particularly paragraphs 23 to 25 of that judgment, in which the Court referred to the case‑law on the system of VAT applicable to capital goods in mixed use, that is to say, in use for both business and private purposes. It follows that the taxable person has the choice, for VAT purposes, of (i) allocating goods wholly to the assets of his business, (ii) retaining them wholly within his private assets, thereby excluding them entirely from the system of VAT, or (iii) integrating them into his business only to the extent to which they are actually used for business purposes. Should the taxable person choose to treat capital goods used for both business and private purposes as business goods, the input VAT due on the acquisition of those goods is, in principle, immediately deductible in full. In those circumstances, when the input VAT paid on goods forming part of the assets of a business is wholly or partly deductible, their use for the private purposes of the taxable person or of his staff or for purposes other than those of his business is treated as a supply of services for consideration pursuant to Article 6(2)(a) of the directive. 33 The Hoge Raad der Nederlanden is of the view that those principles are capable of being applied equally to ‘a legal person engaged in, inter alia, certain activities as a taxable person which are not subject to VAT’, with the result that Article 6(2)(a) of the directive may be applicable to that person. 34 It is common ground that activities such as those by which an association promotes the general interests of its members are not activities ‘subject to [VAT]’ under the terms of Article 2(1) of the directive, since they do not consist of the supply of goods or services effected for consideration (see, to that effect, Joined Cases C‑354/03, C‑355/03 and C‑484/03 Optigen and Others [2006] ECR I‑483, paragraph 42 and the case‑law cited). 35 With regard to the question whether such activities may be considered to be carried out for ‘purposes other than’ those of the business within the meaning of Article 6(2)(a) of the directive, it should be noted that in Case C‑437/06 Securenta [2008] ECR I‑1597, judgment in which was delivered after the present order for reference had been lodged, inter alia, a question was referred to the Court as to how to determine the right to a deduction of the input VAT paid in the case of a taxable person simultaneously carrying out economic activities and non‑economic activities. 36 In that regard, the Court stated, at paragraph 26 of that judgment, that non‑economic activities do not fall within the scope of the directive, specifying, at paragraph 28 thereof, that the deductions scheme laid down by the directive relates to all economic activities of a taxable person, whatever their purpose or results, provided that they are, in principle, themselves subject to VAT. 37 The Court accordingly held, at paragraphs 30 and 31 of the judgment in Securenta, that the input VAT relating to expenditure incurred by a taxable person cannot give rise to a right to deduct in so far as it relates to activities which, in view of their non‑economic nature, do not come within the scope of the directive and that, where a taxable person simultaneously carries out economic activities, whether taxed or exempt, and non‑economic activities outside the scope of the directive, deduction of the input VAT relating to expenditure is allowed only to the extent to which that expenditure may be attributed as an output to the economic activity of the taxable person. 38 It follows from these considerations that, as the Advocate General has noted in point 38 of his Opinion, Article 6(2)(a) of the directive is not intended to establish a rule that transactions outside the scope of the system of VAT may be considered to be carried out for ‘purposes other than’ those of the business within the meaning of that provision. Such an interpretation would have the effect of rendering Article 2(1) of the directive meaningless. 39 It is also appropriate to state that, unlike Charles and Charles-Tijmens, which concerned immoveable property allocated to the assets of the business before being attributed, in part, to private use, by definition completely different from the business of the taxable person, the situation in the main proceedings in the present case relates to transactions other than VNLTO’s taxable transactions, consisting in safeguarding the general interests of its members, and not capable of being considered, in this case, to be non-business transactions, given that they constitute the main corporate purpose of that association. 40 Consequently, the answer to the first question is that Articles 6(2)(a) and 17(2) of the directive must be interpreted as not being applicable to the use of goods and services allocated to the business for the purpose of transactions other than the taxable transactions of the taxable person, as the VAT due in respect of the acquisition of those goods and services, and relating to such transactions, is not deductible. The second question 41 In the light of the answer given to the first question referred for a preliminary ruling, it is not necessary to answer the second question. Costs 42 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Fourth Chamber) hereby rules: Articles 6(2)(a) and 17(2) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, must be interpreted as not being applicable to the use of goods and services allocated to the business for the purpose of transactions other than the taxable transactions of the taxable person, as the value added tax due in respect of the acquisition of those goods and services, and relating to such transactions, is not deductible. [Signatures] * Language of the case: Dutch.