Opinion of the Advocate General — ECLI:EU:C:2004:142
Date: 2004-03-11
Language of the case: German
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Common flat-rate scheme for farmers – Scope – Leasing of part of a farm – Exclusion (Council Directive 77/388, Art. 25) Article 25 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, which confers on the Member States the right to apply a common flat-rate scheme to farmers where the application to them of the normal VAT scheme or the simplified tax scheme would give rise to difficulties, is to be interpreted as meaning that a farmer who has leased and/or let on a long-term basis some of the material assets of his farming business but continues to farm with the rest of his assets and who, in respect of the continued farming activity, is subject to the common flat-rate scheme provided for in that article may not treat the income from such a lease and/or letting as being taxable under that scheme. The turnover from that arrangement must be taxed under the normal VAT scheme or, where appropriate, the simplified scheme. Application of the scheme is not dependent on satisfaction of a sole criterion, namely the formal status of farmer, but is reserved to farmers whose situation is covered by all the provisions of Article 25 of the Sixth Directive. Letting can be included in the services referred to in that provision only if it concerns equipment that the farmer normally uses in farming his own agricultural land. It follows that the letting, leasing or creation of a usufructuary right by which a farmer transfers exclusive enjoyment of immovable property to another farmer, with the result that the latter may enjoy the fruits of that property, does not fall within the scope of Article 25, because the transferring farmer can then no longer regularly use the assets concerned. For the same reason, this must also apply in the case of the long-term letting of other objects of the farm to which the lessee has exclusive rights of enjoyment. (see paras 27, 31, 34, 37, operative part)