Opinion of the Advocate General — ECLI:EU:C:2025:534
Date: 2025-07-03
Language of the case: Czech
Procedure: Reference for a preliminary ruling
Origin: Czechia

summary 57. In the present case, therefore, it is not the society, but the respective partner which is the taxable person actually liable for the VAT. According to the request for a preliminary ruling, only the latter acted in its own name vis-à-vis its customers (that is to say, outwardly). C. The administrative treatment of the transactions of a society 58. Only to the extent that the referring court reaches the conclusion that it is the society that dealt with a third party in the present case is that society the taxable person. It would then still be necessary to determine whether EU law precludes the society’s tax liability from being allocated to the applicant (as one of the four partners). This concerns the legal concept of the ‘designated partner’ existing in Czech law until mid-2017. 59. In principle, it is the taxable person himself or herself who is liable for VAT (Article 193 of the VAT Directive). However, the way in which it is to be treated in the context of the tax procedure is not explicitly regulated by the VAT Directive. However, the VAT Directive is based on the principle that every taxable person must be able to submit, for example, a recapitulative statement (Article 262 of the VAT Directive). The declaration of commencement, change and cessation of the activity is to be made by the taxable person (Article 213 of the VAT Directive), as is a VAT return (Article 250 of the VAT Directive). It is only in certain cases that Article 205 of the VAT Directive allows a person other than the person liable for payment of the tax to be held jointly and severally liable for payment of VAT. In that regard, much militates in favour of the view that the concept of ‘designated partner’ was not compatible with the VAT Directive, as the Commission also states. That was probably also the reason for its elimination. 60. There is no need here to consider in greater detail whether, from an administrative point of view, with the agreement of two connected persons liable for payment of the tax (society and partners), the society may designate, for the purposes of tax administration, one of the partners as a ‘designated partner’ who fulfils the society’s tax obligations, provided that there are no changes in the tax revenue as a result. (30) In the present case, it is not the person liable for payment of the tax (that is to say, the society) that appointed a partner as ‘administrative controller’ who performs the obligations, but apparently the tax authority that did so a posteriori. Similarly, the tax debts of the society and of the ‘designated partner’ do not appear to be treated separately, which could have an impact on tax revenues, as shown in the present case. VI. Conclusion 61. In conclusion, I therefore propose that the Court answer the questions referred for a preliminary ruling by the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic) as follows: Article 9(1) and Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that a taxable person is not required to have its own legal personality but must have its own legal capacity. The economic activity is carried out ‘independently’ where the taxable person is acting in his or her own name. This results from the actions and dealings with third parties (outwardly). It is irrelevant for the purposes of VAT legislation whether it infringes internal agreements in that regard (such as, for example, a partnership agreement). 1 Original language: German. 2 For example, the Gesellschaft bürgerlichen Rechts (civil law partnerships) (Paragraph 705 et seq. of the Bürgerliches Gesetzbuch (German Civil Code; ‘the BGB’)) is a comparable legal form existing in Germany. 3 OJ 2006 L 347, p. 1, in the version in force in 2017, the year at issue (as last amended by Council Directive [EU] 2016/856 of 25 May 2016 amending Directive 2006/112/EC on the common system of value added tax, as regards the duration of the obligation to respect a minimum standard rate [OJ 2016 L 142, p. 12]). 4 Judgments of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, end of paragraph 37), and of 26 October 2010, Schmelz (C‑97/09, EU:C:2010:632, paragraph 63). 5 See my Opinions in UP CAFFE (C‑171/23, EU:C:2024:417, point 53 et seq.), in Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos and Others (Joint Activity Agreement) (C‑312/19, EU:C:2020:310, point 63 et seq.), and in Schmelz (C‑97/09, EU:C:2010:354, end of point 33). 6 As expressly stated in the judgment of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, paragraph 38). 7 See Article 25: Small undertakings of the Explanatory memorandum of Commission Proposal COM(73) 950 final of 20 June 1973, page 27. 8 See my Opinion in UP CAFFE (C‑171/23, EU:C:2024:417, point 54) and judgment of 4 October 2024, UP CAFFE (C‑171/23, EU:C:2024:840, paragraph 27). 9 See in particular, in that regard, judgment of 4 October 2024, UP CAFFE (C‑171/23, EU:C:2024:840, paragraph 23 et seq.), and of 22 November 2017, Cussens and Others (C‑251/16, EU:C:2017:881, paragraph 31 et seq.). 10 Judgment of 18 December 2014, Schoenimport ‘Italmoda’ Mariano Previti and Others (C‑131/13, C‑163/13 and C‑164/13, EU:C:2014:2455, paragraphs 49 and 62). 11 Order of 9 January 2023, A.T.S. 2003 (C‑289/22, EU:C:2023:26, paragraph 42). 12 See judgments of 1 December 2022, Finanzamt T (Internal supplies within a VAT group) (C‑269/20, EU:C:2022:944, paragraph 43), and of 1 December 2022, Norddeutsche Gesellschaft für Diakonie (C‑141/20, EU:C:2022:943, paragraph 49): it is apparent from the Explanatory memorandum for the Commission Proposal (COM(73) 950 final) which resulted in the adoption of the Sixth Directive that the EU legislature, by adopting that provision, intended, either in the interests of administrative simplification or with a view to combating abuses such as the splitting up of one undertaking among several taxable persons so that each might benefit from a special scheme, to ensure that Member States would not be obliged to treat as taxable person those whose ‘independence’ is purely a legal technicality. The judgment of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 80) follows the same line of argument. 13 See, for example, judgments of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 26); of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 27); and of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 35). 14 Judgments of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 69); of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 39); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 28). 15 Judgments of 3 April 2025, Grzera (C‑213/24, EU:C:2025:238, paragraph 28); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34). 16 Judgments of 3 April 2025, Grzera (C‑213/24, EU:C:2025:238, paragraph 23); of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 41); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 28); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34). 17 Expressly: judgments of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 28); and of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54). 18 The Court speaks of a form which, although without legal personality, was in fact able to act independently; see judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54). 19 Judgments of 27 March 2014, Le Rayon d’Or (C‑151/13, EU:C:2014:185, paragraph 29); of 3 May 2012, Lebara (C‑520/10, EU:C:2012:264, paragraph 27); and of 3 March 1994, Tolsma (C‑16/93, EU:C:1994:80, paragraph 14). The judgment of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 43), even speaks of an agreement between the parties on a price. Such an agreement can be concluded only with a person having legal capacity. 20 See, for example, judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25); and my Opinion in Dong Yang Electronics (C‑547/18, EU:C:2019:976, point 41). 21 See, for example, judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25). See also, in that regard, my Opinion in Di Maura (C‑246/16, EU:C:2017:440, point 21). 22 Judgments of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 45 et seq.), and of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54). The judgment regarding a budget-bound municipal facility goes in a similar direction; see judgment of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 36 et seq.). 23 Judgments of 16 September 2020, Valstybinė mokesčių inspekcija (joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 40 and 41); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 28); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34). 24 That was the express view taken in the judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 40), confirmed by judgment of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 70). 25 See, in that regard, recital 5 of the VAT Directive. 26 Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 31); the Opinion of Advocate General Szpunar goes in this direction in Nigl (C‑340/15, EU:C:2016:505, point 21), according to which ‘the very fact that there is cooperation, even close cooperation’ does not indicate that a person is no longer an independent taxable person. 27 Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 33). 28 Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 34). 29 Article 28 of the VAT Directive is worded as follows: ‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’ 30 In its judgments relating to the German tax group scheme, the Court rightly recognised that Member States have a certain margin of discretion in the administrative treatment of a ‘VAT group’, provided that it does not entail a risk of tax losses. See judgments of 1 December 2022, Finanzamt T (Internal supplies within a VAT group) (C‑269/20, EU:C:2022:944, paragraph 50), and of 1 December 2022, Norddeutsche Gesellschaft für Diakonie (C‑141/20, EU:C:2022:943, paragraph 57).