Judgment;Summary — ECLI:EU:C:2022:842
Date: 2022-10-27
Language of the case: German
Court formation: Eighth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Austria

Translation C-641/21 – 1 
Case C-641/21 
Request for a preliminary ruling 
Date lodged: 
20 October 2021 
Referring court: 
Bundesfinanzgericht (Austria) 
Date of the decision to refer: 
11 October 2021 
Appellant: 
Climate Corporation Emissions Trading GmbH 
Respondent authority: 
Finanzamt Österreich 
  
[…] 
BUNDESFINANZGERICHT (FEDERAL FINANCE COURT)   
 […] 
REPUBLIC OF AUSTRIA 
[…] 
Request for a preliminary ruling under Article 267 TFEU 
Parties to the main proceedings before the Federal Finance Court, […] Case 
RV/7102167/2013: 
• Appellant: 
Climate Corporation Emissions Trading GmbH, […] 2500 Baden, 
Austria; […] 
• Respondent authority: 
EN 
REQUEST FOR A PRELIMINARY RULING OF 11. 10. 2021 – CASE C-641/21 
 
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Finanzamt Österreich (Tax Office, Austria), […] 1000 Vienna, Austria 
(as the successor of the Tax Office, Baden Mödling, since 1 January 
2021). 
ORDER 
In the appeal proceedings of Climate Corporation Emissions Trading GmbH […] 
concerning the appeal of 27 February 2012 against the 2010 turnover tax 
assessment notice issued by the Tax Office, Baden Mödling, on 27 January 2012, 
the Federal Finance Court […] has made the following order: 
The following question is referred to the Court of Justice of the European Union 
for a preliminary ruling under Article 267 TFEU: 
Is Council Directive 2006/112/EC of 28 November 2006 on the common system 
of value added tax, as amended by Council Directive 2008/8/EC of 12 February 
2008, to be interpreted as meaning that the national authorities and courts must 
regard the place of supply of a service, which, under the written law, is formally 
located in the other Member State, in which the recipient of the supply is 
established, as being within the national territory if the domestic taxable person 
supplying the service should have known that, in supplying it, he or she was 
participating in value added tax evasion committed in the context of a chain of 
supplies? 
Grounds 
(1) Facts 
The registered office of Climate Corporation Emissions Trading GmbH (‘Climate 
GmbH’) is located in Austria. From 1 to 20 April 2010, Climate GmbH 
transferred greenhouse gas emission allowances, for consideration, to Bauduin 
Handelsgesellschaft mbH (‘Bauduin GmbH’), having its registered office in 
Germany (Hamburg), which was a ‘buffer company’, that is to say, a participant 
in a value added tax (VAT) carousel fraud. Climate GmbH should have known 
that those greenhouse gas emission allowances would subsequently be used to 
evade VAT in a Member State other than Austria. Climate GmbH would have 
been expected not to sell greenhouse gas emission allowances to Bauduin GmbH, 
in order to prevent such VAT evasion. 
Bauduin GmbH – like Climate GmbH – was to be categorised as a taxable person 
within the meaning of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax. 
CLIMATE CORPORATION EMISSIONS TRADING 
 
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(2) Previous and further course of the procedure 
By the 2010 turnover tax assessment notice contested before the Federal Finance 
Court, The Tax Office, Baden Mödling, categorised the transfers, for 
consideration, of greenhouse gas emission allowances from Climate GmbH to 
Bauduin GmbH as taxable supplies of goods which do not fall under the tax 
exemption for intra-Community supplies because Bauduin GmbH, as a ‘missing 
trader’, was a component of a fraudulent VAT carousel and Climate GmbH knew 
or should have known that its supplies would be used for acts of VAT evasion. 
Climate GmbH objects to the categorisation of the transfers of emission 
allowances as supplies of goods and disputes the assertion that it or its managing 
directors knew or should have known about the acts of VAT evasion. It submits 
that it took all necessary measures to prevent the greenhouse gas emission 
allowances that it sold to Bauduin GmbH from being involved in acts of VAT 
evasion. 
The Federal Finance Court takes the view that that is not true: although Climate 
GmbH did not know that the allowances that it sold to Bauduin GmbH were 
involved in acts of VAT evasion, it should have known that that was the case. 
In accordance with the case-law of the Court of Justice of the European Union 
(judgment of 8 December 2016, C-453/15), transfers of greenhouse gas emission 
allowances are to be categorised as services. The Federal Finance Court can 
amend the contested assessment notice in any way, so it must take its decision on 
the premiss that the transfers of greenhouse gas emission allowances are to be 
categorised as services (‘other supplies’, according to the terminology used in 
Austrian national law) and not as supplies of goods. 
(3) Relevant provisions 
(3.1) National (domestic) law 
For ‘other supplies’ (a concept of national law, for which EU law uses the term 
‘services’) made to a ‘trader’ (a concept of national law, for which EU law uses 
the term ‘taxable person’) after 31 December 2009, the place of supply is 
determined as follows in Paragraph 3a(5) and (6) of the Austrian 
Umsatzsteuergesetz 1994 (1994 Law on turnover tax; ‘the Austrian UStG’), in the 
version published in BGBl. I 52/2009: 
‘(5) For the purposes of subparagraphs 6 to 16 and Article 3a, the following shall 
apply: 
1. a trader shall be any trader within the meaning of Paragraph 2; a trader 
who carries out also non-taxable transactions shall be regarded as a trader in 
respect of all other supplies made to him or her; 
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2. a legal person carrying on non-business activities who is identified for 
turnover tax purposes shall be regarded a trader; 
3. a person or association of persons that does not fall within the scope of 
points 1 and 2 shall be regarded as a non-trader. 
(6) Without prejudice to subparagraphs 8 to 16 and Article 3a, other supplies 
made to a trader within the meaning of points 1 and 2 of subparagraph 5 shall be 
deemed to be made at the place from which the recipient carries on his or her 
business. If, however, the other supply is made at the fixed establishment of a 
trader, the location of the fixed establishment shall be decisive.’ 
(3.2) EU law 
The national law, which uses the term ‘Umsatzsteuer’ (turnover tax) for the tax at 
issue, and the enforcement of that law by the authorities and courts of the Member 
State must comply with the provisions of EU law on that tax, which is referred to 
as ‘value added tax’ under EU law. 
The following provisions of Council Directive 2006/112/EC of 28 November 
2006 on the common system of value added tax, as amended by Council Directive 
2008/8/EC of 12 February 2008 amending Directive 2006/112/EC, are relevant in 
that regard: 
‘Article 44 
The place of supply of services to a taxable person acting as such shall be the 
place where that person has established his business. However, if those services 
are provided to a fixed establishment of the taxable person located in a place 
other than the place where he has established his business, the place of supply of 
those services shall be the place where that fixed establishment is located. In the 
absence of such a place of establishment or fixed establishment, the place of 
supply of services is the place where the taxable person who receives such 
services has his permanent address or usually resides.’ 
‘Article 196 
VAT shall be payable by any taxable person, or non-taxable legal person 
identified for VAT purposes, to whom the services referred to in Article 44 are 
supplied, if the services are supplied by a taxable person not established within 
the territory of the Member State.’ 
Council Regulation (EC) No 1777/2005 of 17 October 2005 laying down 
implementing measures for Directive 77/388/EEC on the common system of value 
added tax was ‘binding in its entirety and directly applicable in all Member 
States’, and it was not until 2011 that it was repealed, with effect from 1 July 
2011, by Article 64 of Council Implementing Regulation (EU) No 282/2011 of 
CLIMATE CORPORATION EMISSIONS TRADING 
 
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15 March 2011 laying down implementing measures for Directive 2006/112/EC 
on the common system of value added tax (‘the VAT Implementing Regulation’), 
read in conjunction with Article 65 thereof. Consequently, Regulation (EC) 
No 1777/2005 is applicable to the transactions of April 2010 from a temporal 
point of view, even if, from a formal point of view, April 2010 is no longer 
covered by Directive 77/388/EEC, but by Directive 2006/112/EC on the common 
system of value added tax. Although Articles 4 to 12 of Regulation (EC) 
No 1777/2005 contain various detailed provisions on the place of a taxable 
transaction, they are not at all related to the matters at issue in the present case. 
The VAT Implementing Regulation is not applicable to the transactions in April 
2010 ratione temporis, as it did not enter into force until 12 April 2011 and has 
only been applicable since 1 July 2011. 
(4) Explanation of the question referred 
(4.1) Relevance of the question referred 
According to the wording of the national legislation, the place where the services 
at issue were supplied by Climate GmbH to Bauduin GmbH between 1 and 
20 April 2010 is, in accordance with the basic rule for ‘B2B’ (supplies from one 
taxable person to another taxable person) – that is to say, in accordance with 
Paragraph 3a(6) of the Austrian UStG – in Germany. Consequently, the services at 
issue are not taxable in Austria under national written law; in other words, they 
are not subject to Austrian turnover tax (= VAT) under national written law. 
In accordance with Paragraph 3a(2) of the German Umsatzsteuergesetz (Law on 
value added tax; ‘the German UStG’), the place of transfer of greenhouse gas 
emission allowances to a trader (= ‘taxable person’ in the terminology used in 
Directive 2006/112/EC) is the place from which the recipient carries on his or her 
business. In the present case, therefore, that place was in Germany. 
In accordance with Paragraph 13b(1) of the German UStG, the taxable person in 
respect of the ‘other supplies’ (services) of a trader established in Austria which 
are taxable in Germany is the trader receiving the supply. In the present case, 
therefore, Bauduin GmbH was the taxable person in respect of German turnover 
tax. 
Therefore, German domestic law – like Austrian domestic law – complies with 
EU law. 
According to the wording of Council Directive 2006/112/EC of 28 November 
2006 on the common system of value added tax, as amended by Directive 
2008/8/EC, the place of supply of the services at issue which were provided by 
Climate GmbH to Bauduin GmbH between 1 and 20 April 2010 is Germany, in 
accordance with the general rule for ‘B2B’ (supplies from one taxable person to 
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another taxable person), that is to say, in accordance with Article 44 of the 
directive, as amended. Consequently, the services at issue are not taxable in 
Austria under EU written law; in other words, they are not subject to Austrian 
turnover tax under EU written law. 
According to the answer given, in reply to a question referred for a preliminary 
ruling, in the judgment of the Court of 18 December 2014, Schoenimport 
‘Italmoda’, C-131/13, it is for the national authorities and courts to refuse a 
taxable person, in the context of an intra-Community supply [of goods], the 
benefit of the rights to deduction of, exemption from or refund of VAT, even in 
the absence of provisions of national law providing for such refusal, if it is 
established, in the light of objective factors, that that taxable person knew, or 
should have known, that, by the transaction relied on as a basis for the right 
concerned, it was participating in VAT evasion committed in the context of a 
chain of supplies. 
In that judgment of the Court, a further question referred for a preliminary ruling 
was answered to the effect that a taxable person who knew, or should have known, 
that, by the transaction relied on as a basis for rights to deduction of, exemption 
from or refund of VAT, that person was participating in evasion of VAT 
committed in the context of a chain of supplies [of goods], may be refused the 
benefit of those rights, notwithstanding the fact that the evasion was carried out in 
a Member State other than that in which the benefit of those rights has been 
sought and that taxable person has, in the latter Member State, complied with the 
formal requirements laid down by national legislation for the purpose of 
benefiting from those rights. 
If the supplies at issue had consisted of supplies of goods and not – as is the case 
here – of services, the present case would have to be assessed in accordance with 
the Court’s judgment in Schoenimport ‘Italmoda’, to the effect that Climate 
GmbH would in that case have to be denied the tax exemption in respect of the 
intra-Community supplies. In line with the Court’s order of 14 April 2021, HR v 
Finanzamt Wilmersdorf, C-108/20, that outcome would not be precluded by the 
fact that Climate GmbH did not actively participate in the tax evasion. 
The decision of the Federal Finance Court depends on whether the 
abovementioned answers to questions referred for a preliminary ruling in the 
judgment of the Court of 18 December 2014, Schoenimport ‘Italmoda’, C-131/13 
are to be applied mutatis mutandis to the cross-border services at issue; in other 
words, whether, for the purposes of determining the Austrian VAT, Council 
Directive 2006/112/EC of 28 November 2006 on the common system of value 
added tax, taking its entire rationale into account, is to be interpreted in such a 
way that, contrary to the wording of Article 44 thereof (as amended by Directive 
2008/8/EC) and contrary to the wording of Paragraph 3a of the Austrian UStG, the 
place of supply is to be regarded as being in Austria in the circumstances of the 
present case. 
CLIMATE CORPORATION EMISSIONS TRADING 
 
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(4.2) The question referred 
In the area of ‘B2B’, the comparison of an intra-Community supply of goods, 
which was the basis of the judgment of the Court of 18 December 2014, 
Schoenimport ‘Italmoda’, C-131/13, with a cross-border service (supplied by a 
taxable person established in one Member State to a taxable person established in 
another Member State) shows that there are both similarities and differences 
between them: 
Similarities: 
Intra-Community supplies of goods and cross-border services within the EU 
involve two Member States in each case. As a general rule, the different 
provisions on those two types of supplies have the same effect in the area of 
‘B2B’, namely that tax liability in respect of the supplies arises only in the 
Member State in which the recipient of the supply is established. As a general 
rule, that tax liability falls on the recipient of the supply, either as a tax on the 
intra-Community acquisition or as a tax which is passed on to the recipient of the 
supply (reverse charge). 
Those similarities might suggest that, with regard to cross-border services, 
Directive 2006/112/EC (as amended by Directive 2008/8/EC) must be interpreted 
by analogy with the judgment of the Court of 18 December 2014, Schoenimport 
‘Italmoda’, C-131/13. 
Differences: 
In the case of intra-Community supplies of goods from one taxable person to 
another, the place of supply is, as a general rule, the place where the supplier is 
established, that is to say, the place where the goods are located when the right of 
disposal is transferred or the place where the transport of the goods to the recipient 
begins. 
By contrast, in the case of a cross-border service supplied by one taxable person to 
another, the place of supply is, as a general rule, the place where the recipient of 
the supply is established. 
In the case of intra-Community supplies of goods, the same transaction meets, in 
the area of ‘B2B’, the criteria for two taxable events, namely the intra-Community 
supply and the intra-Community acquisition, whereby, as a general rule, double 
taxation of the transaction is prevented by the tax exemption of the former. 
By contrast, only one taxable event is provided for in respect of cross-border 
services. The acquisition of a cross-border service does not constitute a taxable 
event. Where appropriate, the tax liability for the supply of the service is 
transferred from the supplier to the recipient of the supply (reverse charge). 
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In the case of intra-Community supplies of goods, the State in which the supplier 
is established has a right of taxation, which, as a general rule, is neutralised by the 
tax exemption of the intra-Community supply. 
By contrast, in the case of a cross-border service which is taxable at the place 
where the recipient of the supply is established, the State in which the supplier is 
established does not have a right of taxation, with the result that tax exemption by 
that State is not necessary. 
Those differences might suggest that, with regard to cross-border services, 
Directive 2006/112/EC (as amended by Directive 2008/8/EC) is not to be 
interpreted by analogy with the judgment of the Court of 18 December 2014, 
Schoenimport ‘Italmoda’, C-131/13. 
Overall, the correct interpretation of EU law does not appear to be so obvious as 
to leave no scope for any reasonable doubt (see judgment of the Court of Justice 
of 4 October 2018, C-416/17, paragraph 110). 
The question set out in the introduction to the present order is therefore referred to 
the Court for a preliminary ruling under Article 267 TFEU. 
[…] 
[Statements regarding the national procedure and rights of appeal]. 
[…] 
[Statements regarding procedural aspects of the preliminary ruling procedure 
before the Court, the protection of personal data, as well as costs and the 
possibility of legal aid]. 
[…] 
Vienna, 11 October 2021 
[…]