Opinion of the Advocate General — ECLI:EU:C:1998:309
Date: 1998-06-18
Language of the case: Swedish
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Sweden

summary, it can be said that the Skatterättsnämnden adopts decisions in formssimilar to courts of law in matters which concern inter alios taxable persons,relations to the public at large regarding their liability to tax. 11. In its written observations the Commission first recalls that the notion of'court or tribunal for the purposes of Article 177 of the Treaty must be given anautonomous Community-law construction. A fundamental distinction must, in itsopinion, be made between bodies which exercise a judicial role and those whichmerely carry out administrative functions. Relying, in particular, on the Court'sjudgments in Almelo (10) and Job Centre, (11) the Commission concludes that theSkatterättsnämnden falls into the latter category; its preliminary opinions do notdiffer in substance from decisions made by the tax administration in respect of theimposition of tax. 12. Sweden, in its written observations, says that the Skatterättsnämnden playsa vital role in the Swedish fiscal system and that its decisions have an importantinfluence on commercial activities. Furthermore, Sweden contends that it is veryimportant for its fiscal system that the Skatterättsnämnden be permitted to referquestions to the Court. 13. In its written answers to a number of questions put to it by the Courtconcerning, in particular, the structure and organisation of the Skatterättsnämnden,as well as the independence of its members and the extent to which requests forits preliminary decision must concern concrete disputes between the taxadministration and taxpayers, Sweden first emphasises that, under Article 2 of the1951 Law, the Skatterättsnämnden is a permanent body comprising 18 full and 18deputy members, all of whom are nominated by the Swedish Government forfour-year mandates. Of the 18 full members, the Government nominates two aspresidents (one for each division of the Skatterättsnämnden) and three asvice-presidents, as well as deciding to which division the other members shall beallocated. Only the two presidents are engaged full-time with theSkatterättsnämnden; all of the other members (and deputy members) have otherfull-time positions as judges, civil servants or in the private sector. The twopresidents and the members who act as rapporteurs for the Skatterättsnämndenmust be (or have the qualifications required of) judges. The quorum for hearinga request for a preliminary decision is fixed at six members, which must include apresident and a vice-president. 14. It also refers to Article 9 of Chapter 1 of the Regeringformen (SwedishConstitution) under which the procedure followed by the Skatterättsnämnden mustbe both objective and impartial, a requirement secured by the Brottbalken (SwedishCriminal Code), which contains provisions on active and passive corruption. Moreover, the Forvaltninglagen (Law applicable to the administration) (12) providesrules concerning the right to object to a specific Skatterättsnämnden member sittingin a particular case. (13) 15. Thirdly, the procedure before the Skatterättsnämnden, which is adversarial,is initiated by a written request. (14) If it is not immediately rejected under Article 6of the 1951 Law, the Riksskatteverket, or, where appropriate, a commune or aregion, is required to submit observations. The opinion sought must concern thefiscal situation of the requesting taxpayer, namely a particular transaction or anumber of transactions. Typically, Sweden points out, it will concern the fiscaltreatment of a proposed transaction which the taxpayer intends to enter into butin respect of which he is in dispute with the tax administration. However, itappears that the taxpayer may decide not to proceed with the transaction, particularly if the ruling of the Skatterättsnämnden is unfavourable. Sweden assertsthat the preliminary-decision procedure before the Skatterättsnämnden is effectivelythe counterpart in administrative law of a declaratory judgment in Swedish civil law. 16. Finally, under Article 11 of the 1951 Law a preliminary decision is bindingon the tax administration. The ordinary administrative courts are bound by thedecision in any subsequent litigation. This, Sweden contends, demonstrates thatSkatterättsnämnden decisions are more binding in nature than certain otherdecisions on which the Court has ruled. (15) The fact that an appeal may be broughtto the Regeringsrätten against its decisions underscores the judicial nature of suchopinions. Moreover, Sweden questions whether, if the Skatterättsnämnden wereunable to refer questions to the Court, the Regeringsrätten would be entitled to doso on appeal. 17. At the oral hearing, the Commission maintained its view that theSkatterättsnämnden could not be regarded as a 'court or tribunal for the purposesof Article 177 of the Treaty. It contended that the non-judicial nature of theSkatterättsnämnden was confirmed by the fact that, under the 1951 Law, there wasno requirement for the existence of a real dispute between the taxpayer and thetax administration before a request for a decision could be made. Even if therewould often be a difference of understanding as to the scope or application of therelevant fiscal provisions, such differences of opinion would essentially be of anunofficial nature. The Commission also submitted that the Court's recentjudgments in Dorsch Consult (16) and Garofalo and Others (17) did not affect its viewthat a body such as Skatterättsnämnden could not be regarded as competent torefer questions to the Court. 18. It also emerged clearly at the hearing that the Skatterättsnämnden is notbound to provide any ruling and that there is no appeal against a decision not todo so. B  Analysis 19. It should initially be emphasised that the question whether a referring bodyis a 'court or tribunal for the purposes of Article 177 of the Treaty is a matter ofCommunity law rather than national law. (18) Thus, in Vaassen v BeambtenfondsMijnbedrijf, (19) the Court held that the Scheidsgerecht (Arbitration Tribunal), (20)which had jurisdiction to hear appeals against decisions concerning themanagement of a pension fund for the mining industry concerning the rights ofmembers and former members or their survivors, but which was actually set upunder Dutch private law by all the organisations representing employers andwage-earners in the mining industry, was to be considered a 'court or tribunalwithin the meaning of Article 177 of the Treaty. On the other hand, in Corbiau vAdministration des Contributions (21) the Court decided, notwithstanding twodecisions of the Luxembourg Conseil d'État (Council of State) recognising thejudicial character of decisions of the Directeur des Contributions Directes et desAccises (Director of Taxation and Excise Duties) of Luxembourg, that the Directorhad an organisational link with the body that made the disputed tax assessment andwas not, therefore, 'an authority acting as a third party in relation to that body. (22) 20. The Court has generally adopted a broad approach when determining theambit of the notion of a 'court or tribunal. (23) It is hardly surprising, given thewide variety of national bodies which may seek to refer questions to the Court, thatthe development of a general definition of a 'court or tribunal has been eschewed. The Court has, nevertheless, enumerated a number of criteria whose applicationlargely determines whether a referring body will be regarded as competent to makea reference. In its recent judgment in Dorsch Consult the Court listed the followingfactors by way of example: '... whether the body is established by law, whether it is permanent, whether itsjurisdiction is compulsory, whether its procedure is inter partes, whether it appliesrules of law and whether it is independent. That this list is not exhaustive and that each factor is not always relevant emergesclearly from the case-law. Thus, in Job Centre the Court declared inadmissiblecertain questions referred to it by the Tribunale Civile e Penale di Milano (Civiland Criminal District Court, Milan, hereinafter 'the Tribunale) in what weredescribed as non-contentious proceedings ('giurisdizione voluntaria) concerning anapplication for the confirmation of the articles of association of a company. (24) TheCourt held that, although the preliminary-reference procedure under Article 177of the Treaty does not require that the proceedings before the national court'... during which the national court frames a question ... [be] inter partes, it is nonethe less apparent ... that a national court may refer a question to the Court only ifthere is a case pending before it and if it is called upon to give judgment inproceedings intended to lead to a decision of a judicial nature. (25) 21. In the present case, I am satisfied, on the basis of the information providedin the order for reference, as supplemented by Sweden's written reply to thequestions put to it by the Court, that the Skatterättsnämnden is an independentbody established by law, which exercises its functions on a permanent basis, whoseprocedures are adversarial, and which gives its decisions based on the applicationof the relevant rules of both national and Community law. Furthermore, it hascompulsory jurisdiction in the sense that there is no other body in Sweden fromwhich a taxpayer can obtain a binding preliminary decision of the sort at issue inthis case. The doubts expressed by the Commission regarding the admissibility ofreferences from the Skatterättsnämnden stem, however, from its opinion thatpreliminary decisions of the type at issue may not, at least for the purposes of theapplication of Article 177 of the Treaty, be viewed as being of a judicial nature. 22. In my opinion, there are two factors regarding the functions of theSkatterättsnämnden, at least in so far as its jurisdiction in respect of preliminarydecisions is concerned, which, at first sight, might be deemed to support theadmissibility objection raised by the Commission. 23. In the first place, the Skatterättsnämnden is not obliged to respond toapplications for a preliminary opinion. The first paragraph of Article 7 of the 1951Law provides that, in effect, where the Skatterättsnämnden, having regard to thecontent of the request, considers that it is not appropriate to give a preliminarydecision, it shall refuse the request. No reasons need be given and such decisionsare not appealable. From the information provided by Sweden, it seems clear thatthe power conferred on the Skatterättsnämnden by the 1951 Law is used to weedout spurious requests, though it appears from an answer given at the hearing thatthere is no established practice. Moreover, Sweden has pointed out that therequest must concern the actual fiscal situation of the requesting taxpayer; in otherwords, the application must concern one or several specific transactions and theresponse given must have a concrete rather than a hypothetical impact on him. Finally, there is nothing to suggest that, in exercising its discretion to reject requestsunder Article 7, the Skatterättsnämnden acts other than on the basis of judicialcriteria. Consequently, I am satisfied that its broad powers to refuse requests forpreliminary decisions do not affect its status as a 'court or tribunal within themeaning of Article 177 of the Treaty. 24. It is somewhat unusual that it is not possible, under the 1951 Law, to appealto the Regeringsrätten decisions refusing to accept an application for a preliminarydecision. Nevertheless, I do not think that factor alone serves to deprive theSkatterättsnämnden of its status as 'court or tribunal for the purposes ofArticle 177 of the Treaty. 25. Secondly, the binding effect of preliminary decisions is contingent upon theapplicant taxpayer actually carrying out the transactions covered by the request. However, I am not persuaded that the possibly contingent nature ofSkatterättsnämnden preliminary rulings deprives them of the status of judicialdecisions for the purposes of Community law. In the present case, there seems tome to be very little that could genuinely be described as contingent, let alonehypothetical, about the effects of the Skatterättsnämnden's ultimate decision for theapplicant. There is nothing in the present case that suggests that the Court'scase-law concerning 'hypothetical references is applicable. In Foglio v Novello theCourt confirmed that its duty under Article 177 'is not that of delivering advisoryopinions on general or hypothetical questions but that of assisting in theadministration of justice in the Member States. (26) This doctrine has been appliedin subsequent cases where the questions referred raised a problem which was 'ahypothetical one in the sense that the problem did not or could not arise forconsideration, even before the national court, at least in so far as it appeared fromthe nature of the dispute as set out in the order for reference, (27) or, alternatively,if it was obvious that the interpretation of Community law sought by the national court bore no relation to the facts of the main action or its purpose. (28) The Courthas, however, never applied this principle generally in respect of an entire form ofproceeding before a referring body, even if that procedure allows potentiallyhypothetical matters to be raised. Furthermore, there is nothing to suggest that thequestions referred in the present case are, in so far as the dispute between theRiksskatteverket and the applicant is concerned, hypothetical. I would suggest ananalogy with the many cases on customs classification where the Court givespreliminary rulings without imposing any precondition of a particular import orexport transaction being in issue. 26. It would appear that, at the moment of its application on 6 March 1996, theapplicant had already assigned the rights in question. Even if this were not thecase, it would almost certainly have taken various other preparatory steps, such aspurchasing the right to adapt the books upon which the films were to be based andperhaps even engaging actors, artists and other personnel that would later berequired, such that its request could not be described as of purely hypotheticalinterest to it. In such circumstances there is little doubt that, in March 1996, thesubject-matter of the application was of considerable actual and practicalimportance for the applicant. To my mind, this is what underlies Sweden'sobservation that the Skatterättsnämnden only deals with concrete cases. (29) Itfollows, in my opinion, that the mere fact that applicants for preliminary decisionsfrom the Skatterättsnämnden need not necessarily have undertaken, or undertake,the transactions that were the subject-matter of the request at the time it waslodged does not render non-judicial the ultimate decision made by theSkatterättsnämnden for the purposes of Article 177 of the Treaty. 27. I am fortified in this conclusion by the case-law of the Court where it hasaddressed the possibility that the body which had made the preliminary referencebefore it might not have been one which gives 'judgment in proceedings intendedto lead to decisions of a judicial nature. (30) 28. In Job Centre the Court held that a reference made by the Tribunale which was manifestly, in form, 'a court or tribunal under Article 177 of the Treaty in an inter partes procedure (31) brought for the confirmation of the articles ofassociation of a company was inadmissible, since the proceedings would not 'leadto a decision of a judicial nature. (32) Such applications involve the performanceof 'a non-judicial function which, in other Member States, is entrusted toadministrative authorities. (33) Thus, the Court found that the Tribunale was'exercising administrative authority without being at the same time called upon tosettle any dispute. (34) That is not the case here. The Skatterättsnämnden is notan administrative decision-maker; it is entirely separate from the Riksskatteverket. Thus, if its decisions are to be classified as non-judicial for the purposes ofArticle 177 of the Treaty, I agree with Sweden that it would be difficult to envisagehow the role of the Regeringsrätten, in so far as it reviews on appeal preliminarydecisions of the Skatterättsnämnden, could be classified differently; in reality bothassess the correctness of the Riksskatteverket's proposed tax treatment of certaintransactions in cases where that treatment is disputed by the taxpayer. 29. Finally, I should say that, unlike the Commission, I find the Court's recentdecisions in Dorsch Consult and Garofalo to be of assistance in recommending thatthe reference in the present case be admitted. (35) In the former, one of theobjections raised by the Commission to the admissibility of the reference from theVergabeüberwachgausschuß des Bundes (Federal Public Procurement AwardsSupervisory Board) was that its decisions were not enforceable. This was dismissedby the Court, which found that 'when the supervisory board finds thatdeterminations made by a review body are unlawful, it directs that body to makea fresh determination, in conformity with the supervisory board's findings on pointsof law, and, thus, that the 'determinations of the supervisory board arebinding. (36) 30. In Garofalo the Court had to consider the role of the Italian Consiglio diStato (Council of State) in respect of the 'opinions it is required to give in thecontext of extraordinary petitions to the President of the Italian Republic. Sincethe procedure, in effect, provides persons seeking the annulment of an Italianadministrative act with an alternative to instituting an appeal in the TribunaleAmministrativo Regionale (Regional Administrative Court), and since the applicants were actually seeking the annulment of a decision of the Minister forHealth, there was little doubt as to the existence of a dispute. The perceiveddifficulty lay in the fact that the opinion of the Consiglio di Stato was not, as amatter of law, binding on the President. The Court, however, relied upon the factthat a decision not to follow the opinion of the Consiglio di Stato may 'be adoptedonly after deliberation within the Council of Ministers and must be fullyreasoned. (37) In those circumstances, and having regard to the nature and statusof the Consiglio di Stato, the Court held that, 'when it issues opinion in the contextof an extraordinary petition, the Consiglio di Stato constitutes a court or tribunalfor the purposes of Article 177 of the Treaty. (38) 31. Although the difficulties in Dorsch Consult and Garofalo concerning theadmissibility of the references are only partially comparable to those at issue in thepresent case, the Court's decisions to answer the questions referred demonstratethat, apart from cases where the subject-matter of the proceedings before thereferring body is clearly administrative in nature, the Court will not readily classifya national proceeding, where the criteria discussed in paragraph 20 above aresatisfied, as one which will not 'lead to a decision of a judicial nature. 32. In the light of the above considerations, I recommend that the Court answerthe questions referred in the present case. IV  Substance 33. The substantive issues raised by the questions referred in this case arerelatively straightforward in comparison with the thorny question of admissibility. The Skatterättsnämnden essentially wishes to know whether Article 28(3)(b) andpoint 2 of Annex F of the Sixth Directive permit a Member State to continue toexempt royalties received from the grant or assignment of exclusive film-exhibitionrights from liability to VAT and, if not, whether the taxable person may rely on theright to deduction provided by the directive notwithstanding the fact that no outputtax has been paid. A  Question 1 (i) The Act of Accession 34. Assuming that the assignments of rights at issue can be considered to havebeen 'services supplied by authors, artists and performers, it seems beyond doubtthat they are covered by both point 2 of Annex F and the provisions of the Act ofAccession quoted at paragraph 2 above. The Act of Accession prescribes, as aprecondition for Sweden's right to rely upon Article 28(3)(b) and point 2 ofAnnex F, the continued application, prior to its accession, of 'the sameexemptions in any of the then 12 Member States. It seems clear that thisrequirement was satisfied. In the first place, neither the order for reference norany of the observations submitted to the Court query Sweden's entitlement, on thebasis of the Act of Accession, to invoke the transitional exemption set out inpoint 2 of Annex F. Secondly, the Commission's report of 2 July 1992 to theCouncil on the transitional provisions resulting from Article 28(3) of the SixthDirective and Article 1(1) of the Eighteenth Council Directive of 18 July1989 states, in respect of point 2 of Annex F, that 'six Member States are currentlyapplying the F2 derogation (Belgium, Denmark, Spain, Greece, Ireland and theNetherlands). (39) (ii) The application of Annex B to the Second Directive 35. The services listed in point 2 of Annex F may only fall within the scope ofthe transitional exemption granted by Article 28(3)(b) 'in so far as these are notservices specified in Annex B to the second Council Directive of 11 April 1967. It is, thus, necessary to consider the effect of this reference. 36. In the first place, is its ostensible purpose affected by the fact that Article 37of the Sixth Directive repealed the Second Directive? I am satisfied from thewording of Article 37, which speaks of the cessation of 'effect of the SecondDirective, that it is only the continued application of the provisions of the SecondDirective that was repealed. The reference made to the Second Directive inpoint 2 of Annex F to the Sixth Directive serves to define the material scope of theexemption therein described. It excludes 'services specified in Annex B ...,although the cessation of effect of the Second Directive was contemporaneouslyprovided for. 37. Furthermore, the intention underlying the reference to the Second Directiveemerges from the legislative history of point 2 of Annex F. In its proposed amendments of 11 October 1974 (40) to its initial 1973 proposal, (41) the Commissionhad proposed the following addition to Article 14 B of the main text of the 1973draft: '(n) supplies of services by authors, writers, composers, lecturers, journalists,actors, musicians, where they are not themselves involved in the publishing orreproduction of their works. This amendment was not adopted by the Council,which, instead, chose merely to permit, in Article 28(3)(b) and point 2 of Annex F(the text of these latter provisions not having been contained in either of theCommission's proposals), the transitional continuance of certain existingexemptions. However, the services covered by Annex B to the Second Directivehad been compulsorily subject to VAT under Article 6(2) of that directive. Failureto give effect to the Annex B exclusion from the scope of point 2 of Annex Fwould, thus, lead to a result where the Sixth Directive would exempt servicespreviously subject to VAT. Moreover, there is no reason why the principle of strictconstruction of exemptions should not apply in respect of Annex F. (42) Thus, in sofar as Annex B limits the scope of an exemption, it should, at the very least, not begiven a narrower interpretation than its words require. (43) 38. Accordingly, I am satisfied that the 'services specified in Annex B must beexcluded from the scope of the transitional exemption permitted by point 2 ofAnnex F to the Sixth Directive. It remains to consider what services are coveredby the Annex B exclusion. (iii) The scope of Annex B to the Second Directive 39. The notion of 'assignments of patents, trade marks and other similar rights,as well as the granting of licences in respect of such rights, is, to my mind,sufficiently broad to encompass the assignment of copyright. Such a provision isparticularly suited for the application of the ejusdem generis principle ofconstruction. (44) The application of that principle presupposes that a genus can beidentified from the matters enumerated in the text under scrutiny which precedesthe general words; in other words, whether a common element emerges fromperusal of a number of specific words which may be used in construing the generalwords. In this case I am satisfied that such an element exists. The specificreferences to 'patents and 'trade marks call to mind two of the principal typesof intellectual property provided in the laws of the Member States and recognisedin the case-law of the Court. Without further words, the provision would, ofcourse, refer only to those two. However, the general words 'and other similarrights must be given a meaning by reference to the elements suggested by theprior specific words. I do not consider that these words should be interpreted asapplying only to rights similar either to patents or to trade marks. In my opinion,they should be construed as alluding to other intellectual property rights, one of themost important of which is, of course, copyright. It follows, in my opinion, that theassignment of the rights to exhibit motion pictures by a film-production company,such as the applicant, must be regarded as excluded from the ambit of point 2 ofAnnex F to the Sixth Directive. 40. Such assignments are clearly taxable supplies for the purposes ofArticle 2(1) of the Sixth Directive, which subjects to VAT 'the supply of goods orservices effected for consideration ... by a taxable person acting as such. Since theassignment of such cinematographic rights consists of the assignment of intangibleproperty, it is covered by the first indent of Article 6(1), and should be treated asa supply of services which is taxable under Article 9(1), in principle, in the MemberState where the supplier has established his business or has a fixed establishmentfrom which the service is supplied. Consequently, I recommend that the Courtanswer the first question referred to the effect that national-law provisions whichseek to exempt such supplies from VAT are incompatible with the Sixth Directive. (iv) Alternative view 41. In the event of the Court not regarding assignments of copyright as coveredby point 1 of Annex B to the Second Directive, I would offer, ex abundante cautela,the following comment on the alternative view that could be taken of the scope ofpoint 2 of Annex F to the Sixth Directive. I should say straightaway that I do notthink that such assignments may be regarded as falling within the notion of'services supplied by ... members of the liberal professions, as Sweden hassubmitted. In the absence of a specific indication by the Community legislaturethat it intended to adopt a very broad notion of what would traditionally be viewedas 'the liberal professions, I do not think that the services of authors, artists,performers are included. I draw support for this view from the statement of theCourt in Linthorst, where, referring to that part of the third indent ofArticle 9(2)(e) which covers 'services of consultants, engineers, consultancybureaux, lawyers, accountants and other similar services, the Court declared that'the only common feature of the disparate activities mentioned in that provisionis that they all come under the heading of liberal professions. (45) However, Iagree with the observations of Finland and Sweden that it would be inappropriateto construe the exemption provided in point 2 of Annex F as limited to servicesprovided by natural persons. Finland has referred to the principle of fiscalneutrality, enunciated by the Court on numerous occasions in relation to theCommunity VAT system. (46) Since VAT applies to the supply for consideration ofgoods or services, it is reasonable to assume that the Community legislature had inmind the exemption of the commercial exploitation of creative or artistic workswhen it included the 'services of authors, artists, performers in point 2 ofAnnex F. I see no reason in principle or logic for limiting that exemption tosupplies made by natural persons. If authors, artists or performers wish to formlegal persons for the purposes of the commercial exploitation of their works, theprinciple of fiscal neutrality, as well as the need to avoid distortions of competition,requires that they be treated no differently for VAT purposes from those whochoose not to adopt such a form. Moreover, given the generally high costs of filmproduction, it is likely that most films will be produced by corporate bodies. Tolimit the scope of the exemption to natural persons would, thus, effectively excludefilm production, a very important modern outlet for the collective provision ofservices by authors, artists, and performers, from the scope of the exemption. B  Questions 2 and 3 42. As regards the second and third questions, it is sufficient to observe that theCourt has consistently held that the provisions of the Sixth Directive are capableof having direct effect. (47) To my mind, this applies a fortiori with regard to bothArticle 6, which defines the notion of 'supplies of services for the purposes ofgiving effect to the distinction made by Article 2(1) between the taxable supply ofgoods and services, and Article 17 concerning the right of deduction. Thecornerstone of the VAT system is that a taxable person pays VAT only on thedifference between the tax included in the supplies of goods and services which hehas purchased from his suppliers and that due on his own supplies. The wordingof both provisions is mandatory and, as the Court has already held in respect of theprovisions of Article 17(1) and (2), '[t]hey do not leave the Member States anydiscretion as regards their implementation. (48) 43. The Skatterättsnämnden has sought specific guidance as to whether anyspecial considerations apply where a taxable person invokes the directly effectiveprovisions of the Sixth Directive in order to assert its liability to pay VAT. Although a taxpayer would not normally voluntarily seek to pay tax, the nature ofthe VAT system is such that, occasionally, liability to VAT will be beneficial to ataxable person. As Advocate General Darmon pointed out in his Opinion inLubbock Fine v Commissioners of Customs & Excise, 'where a taxable personcarries out an exempt transaction, he is not obliged to pay tax on the transaction,but he is also unable to deduct the tax which has been invoiced to him by hissuppliers or to pass on any charge whatsoever to the person following him in thechain of supply. (49) Consequently, since '[a]n exemption from VAT may thereforelead to an increase in his tax burden, he may 'have an interest in being subjectto VAT. (50) There is therefore nothing untoward in seeking to register for VAT. 44. By its third question, the Skatterättsnämnden wishes to know whether theright to deduct may be affected by the fact that a taxable person did not includeoutput tax on the supplies which he made. As I have already noted, thefundamental basis of the right of deduction recognised in Article 17 of the SixthDirective is that VAT inputs 'may be deducted only in so far as the goods andservices in respect of which those inputs have arisen constitute price components of a taxable transaction. (51) Accordingly, the Court has held that, in general,'where a taxable person supplies services to another taxable person who uses themfor an exempt transaction, the latter person is not entitled to deduct the input VATpaid. (52) Sweden refers to the fact that, since the assignment of the rights at issuewas exempt in Swedish law, no VAT was charged by the applicant, and contendsthat, if the applicant were now to be permitted to register for VAT and seek todeduct its VAT inputs, the ex post facto recovery of the VAT which should havebeen charged on the assignments would probably be very difficult. In consequence,Sweden asserts that it would be contrary to Article 17(2) of the Sixth Directive toallow the right of deduction in such circumstances. I do not agree. 45. For the reasons I have already discussed in paragraphs 35 to 40 above, theassignment of rights in cinematographic works has never been exempt from VAT. Thus, transactions such as those at issue in the main proceedings have always beencompulsorily subject to VAT. It follows from the plain and unambiguous wordingof Article 17(2) that, once the taxable person uses the goods and services givingrise to the inputs for the purposes of his taxable transaction, he is entitled toexercise the right of deduction. 46. Sweden would appear to assume that such a result would permit a taxableperson, like the applicant, to have the best of both worlds; namely the benefit ofdeducting its inputs whilst not simultaneously being liable to pay VAT on itsoutputs. This concern is misconceived. The applicant will only be entitled todeduct its inputs from its outputs like all other taxable persons under the VATsystem: the amount in respect of which it will be entitled to claim a reimbursementpursuant to Article 18 of the Directive, which deals with the 'rules governing theexercise of the right to deduct, will, thus, only be that by which its inputs exceedits outputs. Thus, the applicant will be required to account for VAT on itssupplies, whether or not it added it to the price charged to its customers for theassignments at issue. Moreover, it is not the responsibility of the applicant toensure that the VAT which should have been included in the price of theassignment transactions is actually reflected as an input in the VAT return of the assignees. In so far as those assignees are registered for VAT in Sweden, it is upto them to claim deduction of inputs. (53) 47. Accordingly, I would recommend to the Court that it answer the thirdquestion to the effect that the failure of a taxable person to add the value of theoutput tax at the time of calculating the price of the assignment of exclusive rightsto exhibit motion pictures cannot affect the right of that taxable person, who hasmade the assignments in question, to deduct from the VAT which he ought to havepaid in respect of those assignments the VAT component of the goods and servicessupplied to him for the purposes of making the motion pictures that were thesubject-matter of the assignments. V  Conclusion 48. In the light of the foregoing, I recommend that the questions referred by theSkatterättsnämnden be answered as followed: (1) The assignment of rights to exhibit motion pictures by a film-productionundertaking does not come within the scope of the transitional exemptionprovided for in Article 28(3)(b) of the Sixth Council Directive 77/388/EECof 17 May 1977 on the harmonisation of the laws of the Member Statesrelating to turnover taxes  Common system of value added tax: uniformbasis of assessment, read in conjunction with point 2 of Annex F to thatDirective; (2) It follows, in particular, from Articles 2(1), 6(1) and 17 of the Sixth CouncilDirective that a person who makes taxable supplies of exclusive rights toexhibit motion pictures may rely upon those provisions against a national taxauthority which refuses to permit it to make a VAT declaration in whichthat person seeks to deduct the VAT component of the goods and servicesused for the purposes of producing the films in question from the VATwhich should have been included in the price charged on the assignment ofthose rights; (3) The failure of a taxable person to add the value of the output tax at thetime of calculating the price of the assignment of exclusive rights to exhibit motion pictures cannot affect the right of that taxable person, who hasmade the assignments in question, to deduct from the VAT which he oughtto have paid in respect of those assignments the VAT component of thegoods and services supplied to him for the purposes of making the motionpictures that were the subject-matter of the assignments. 1: Original language: English. 2:  Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws ofthe Member States relating to turnover taxes  Common system of value added tax: uniform basis of assessment; OJ 1977 L 145, p. 1. 3:  Second Council Directive 67/228/EEC of 11 April 1967 on the harmonisation of legislationof Member States concerning turnover taxes  Structure and procedures for application ofthe common system of value added tax; OJ, English Special Edition 1967 (I), p. 16(hereinafter 'the Second Directive). I shall also for brevity hereinafter refer simply to'Annex B. 4:  Act concerning the conditions of accession of the Kingdom of Norway, the Republic ofAustria, the Republic of Finland and the Kingdom of Sweden and the adjustments to theTreaties on which the European Union is founded; OJ 1994 C 241, p. 21 (hereinafter 'Actof Accession). 5:  SFS 1994: 200. 6:  The period at issue runs until 31 December 1996. 7:  Reference is made to Articles 1, 4 or 5 of Law 1960: 729 on Copyright in Literary andArtistic Works (lagen om upphovsrätt till litterära och konstnärliga verk, hereinafter 'the1960 Law). 8:  From 1 January 1997, turnover from such grants or assignments has been made liable toVAT; SFS 1996: 1327. 9:  It would appear from the order for reference that the assignments had already occurredat the time of the application to the Skatterättsnämnden. Although the Court has notbeen informed of the amount paid in consideration of the assignments, it may be presumedto be quite considerable given that the total production budget was calculated as beingSKR 48.2 million. 10:  Case C-393/92 [1994] ECR I-1477. 11:  Case C-111/94 [1995] ECR I-3361. 12:  SFS 1986: 223. 13:  However, in response to a question posed at the hearing, counsel for Sweden confirmedthat members of the Skatterättsnämnden are not required, on appointment, to take aspecific oath of office. 14:  At the oral hearing in the present case, Sweden confirmed that the bill to amend the lawon preliminary opinions (Reformerat förhandsbesked i skattefragor, m.m.), to which itrefers in its written reply to the Court's questions, was adopted on 21 April 1998 by theSwedish Parliament and will enter into force on 1 July 1998. The new law will permit theRiksskatteverket to request preliminary decisions of the Skatterättsnämnden. 15:  Case 36/73 Nederlandse Spoorwegen v Minister van Verkeer en Waterstaat [1973] ECR 1299and Joined Cases C-69/96 to C-79/96 Garofalo and Others (hereinafter 'Garofalo), [1997]ECR I-5603. 16:  Case C-54/96 Dorsch Consult v Bundesbaugesellschaft Berlin (hereinafter 'Dorsch Consult),[1997] ECR I-4961. 17:  Loc. cit., footnote 14 above. 18:  See in this respect, most recently, the judgments in Dorsch Consult, loc. cit., paragraph 23and Garofalo, loc. cit., paragraph 19. The dual reference to 'court or tribunal in theEnglish and Irish versions ('cúirte nó binse) of Article 177 of the Treaty, is not reflectedin other language versions. Accordingly, the correct inquiry is not to determine whethera body is first a 'court and, if not, a 'tribunal, but, instead, whether it is encompassedby the single Community concept of 'court or tribunal; see Anderson, References to theEuropean Court (Sweet and Maxwell London, 1995), at p. 29. 19:  Case 61/65 [1966] ECR 261. 20:  As Advocate General Gand pointed out in his Opinion, '... in spite of being called anArbitration Tribunal, the Scheidsgerecht has very little in common with such a body; loc.cit., p. 281. 21:  Case C-24/92 [1993] ECR I-1277. 22:  Paragraphs 15 and 16. See paragraph 4 of the Opinion of Advocate General Darmon whonoted that the soundness of the decisions of the Conseil d'État was disputed by eminentacademic commentators, including the late Judge Schockweiler; see paragraphs 37 to 39. 23:  The Court's approach prompted Advocate General Mancini, in his Opinion in one of theleading cases, to observe that: 'The criteria by which the Community concept of a courtor tribunal is defined could not be wider. That explains why the Court has permittednational judicial bodies of all kinds to consult it, irrespective of the nature and purposeof the proceedings in the course of which they raise a question or of whether the robe theyare wearing when they do so is more or less markedly judicial; see Case 14/86 Pretore diSalò v Persons Unknown [1987] ECR 2545, p. 2556. 24:  Loc. cit., footnote 10 above. 25:  Job Centre, paragraph 9. 26:  Case 244/80 [1981] ECR 3045, paragraph 18. 27:  Case C-83/91 Meilicke v ADC/ORGA [1992] ECR I-4871, paragraphs 30 and 31. 28:  See, inter alia, Case C-415/93 Bosman and Others [1995] ECR I-4921, paragraph 61; CaseC-291/96 Grado and Bashir [1997] ECR I-5531, paragraph 12; and the recent orders of theCourt of 25 May 1998 in Case C-361/97 Nour, Case C-362/97 Karner and Case C-363/97Lindau, in particular paragraph 12 of each of the orders. 29:  The three examples, taken from actual decisions of the Skatterättsnämnden furnished bySweden in its written reply to the Court's questions support this view. In two of theexamples, the applicants were actually engaged in economic activities out of which thesubject-matter of their requests arose. Only in one was the transaction still anticipated atthe time of the application. However, the request concerned the fiscal evaluation of acertain aspect of a more general corporate restructuring plan, which would appear to havealready been in train. 30:  Job Centre, loc. cit. above, paragraph 9. 31:  In paragraph 16 of his Opinion in Job Centre, Advocate General Elmer pointed out 'thatthe Pubblico Ministero was heard in the case before the Tribunale .... 32:  Job Centre, paragraph 9. 33:  Ibid., paragraph 11. 34:  Ibid. 35:  Loc. cit. above. 36:  Dorsch Consult, paragraph 29. 37:  Garofalo, paragraph 24. Although the Court did not refer to any statistics, it may beassumed that it bore in mind the statement of Advocate General Ruiz-Jarabo Colomer that'[I]n practice, the compulsory involvement of the advisory body plays a key role in thedecision on the petition; see paragraph 35 of his Opinion. 38:  Ibid., paragraph 27. 39:  See SEC(92)1006 final. 40:  Amendments to the proposal for a sixth Council Directive on the harmonisation oflegislation of Member States concerning turnover taxes  Common system of value addedtax: uniform basis of assessment; OJ 1974 C 121, p. 34. 41:  Proposal for a sixth Council Directive on the harmonisation of legislation of MemberStates concerning turnover taxes  Common system of value added tax: uniform basis ofassessment; OJ 1973 C 80, p. 1. 42:  This principle has been stated on many occasions by the Court: see Case 348/87 StichtingUitvoering Financiële Acties v Staatssecretaris van Financiën [1989] ECR 1737, paragraph 13; Case C-453/93 Bulthuis-Griffioen v Inspecteur der Omzetbelasting [1995] ECR I-2341,paragraph 19; and, most recently, Case C-346/95 Blasi v Finanzamt München I [1998]ECR I-0000, paragraph 18. 43:  See Case 173/88 Skatteministeriet v Henriksen [1989] ECR 2763, paragraph 12. To mymind, the natural corollary of the principle of the strict interpretation of exemptions is thatexceptions to exemptions must be construed broadly; see paragraph 37 of my Opinion inCase C-468/93 Gemeente Emmen v Belastingsdienst Grote Ondernemingen [1996]ECR I-1721, and paragraph 21 of the Opinion of Advocate General Gulmann in CaseC-74/91 Commission v Germany [1992] ECR I-5437.. 44:  For a brief discussion of the nature of this principle, see paragraph 21 of my Opinion inCase C-167/97 Linthorst, Pouwels and Scheres v Inspecteur der Belastingdienst [1997]ECR I-1195 (hereinafter 'Linthorst), as well as paragraph 67 of the Opinion of AdvocateGeneral Darmon in Case C-63/92 Lubbock Fine v Commissioners of Customs & Excise[1993] ECR I-6665. It has also been invoked as an aid to interpretation by AdvocateGeneral Sir Gordon Slynn in his Opinion in Case 218/86 SAR Schotte v Parfums Rothschild[1987] ECR 4905, p. 4911. The Court in Linthorst, although not referring by name to theprinciple, considered it in that case before finding it to be inapplicable; see paragraph 20. 45:  Linthorst, loc. cit., footnote 43 above, paragraph 20. 46:  See Case C-317/94 Gibbs v Commissioners of Customs & Excise [1996] ECR I-5339, and,in particular, paragraph 23. 47:  See, inter alia, Case 8/81 Becker v Finanzamt Münster-Innenstadt [1982] ECR 53, CaseC-10/92 Balocchi v Ministero delle Finanze [1993] ECR I-5105 and Case C-62/93 BPSupergas v Greek State [1995] ECR I-1883. 48:  BP Supergas, ibid., paragraph 35. 49:  Loc. cit., paragraph 29 of the Opinion. 50:  Ibid. 51:  See paragraph 9 of the Opinion of Advocate General Tesauro in Case C-302/93 Debouchev Inspecteur der Invoerrechten en Accijnzen [1996] ECR I-4495. 52:  See Case C-4/94 BLP Group [1995] ECR I-983, paragraph 28, and Debouche v Inspecteurder Invoerrechten en Accijnzen, loc. cit., paragraph 16. 53:  In respect of those assignees which were not registered for VAT in Sweden, since theassignments should have been subject to VAT in Sweden they would, if they had paidVAT, have been entitled to claim a refund in accordance with Article 7(4) of the EighthCouncil Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws ofthe Member States relating to turnover taxes  Arrangements for the refund of value addedtax to taxable persons not established in the territory of the country; OJ 1979 L 331, p. 11. The fact that no VAT has been paid does not therefore adversely affect overall SwedishVAT revenues.