Opinion of the Advocate General — ECLI:EU:C:2000:41
Date: 2000-01-27
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Financial provisions;Taxation;Value added tax;Own resources
Procedure: Action for failure to fulfil obligations - successful
Origin: Ireland

Summary of the Judgment 
1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Supply of services for consideration — Definition — Provision of 
roads infrastructure on payment of a toll — Whether included 
(Council Directive 77/388, Art. 2, para. 1) 
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SUMMARY — CASE C-358/97 
2. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Taxable persons — Bodies governed by public law — Activities in 
the exercise of public authority not taxable — Definition 
(Council Directive 77/388, Art. 4(5)) 
3. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of 
value added tax — Exemptions provided for by the Sixth Directive — Exemption for 
the letting of immovable property — Definition — Provision of roads infrastructure on 
payment of a toll — Whether excluded 
(Council Directive 77/388, Art. 13B(b)) 
4. Own resources of the European Community — Resources accruing from value added 
tax — Arrangements for collection — Corrections to the annual statement — Time-
limit — Initiation by the Commission of the procedure for failure to fulfil obligations 
seeking the retrospective payment of such resources — Application by analogy — 
Justified by considerations of legal certainty 
(Council Regulation No 1553/89, Art. 9(2)) 
1. The provision of roads infrastructure 
on payment of a toll constitutes a 
supply of services for consideration 
within the meaning of Article 2(1) of 
the Sixth Directive 77/388 on the 
harmonisation of the laws of the 
Member States relating to turnover 
taxes. Use of the road depends on 
payment of a toll, the amount of which 
varies inter alia according to the cate­
gory of vehicle used and the distance 
covered. There is, therefore, a direct 
and necessary link between the service 
provided and the financial considera­
tion received. 
(see paras 33-34 ) 
2. In order for the exemption from value 
added tax for bodies governed by 
public law, provided for by the first 
subparagraph of Article 4(5) of the 
Sixth Directive 77/388 on the harmo­
nisation of the laws of the Member 
States relating to turnover taxes, to 
apply as regards activities or transac­
tions in which they engage as public 
authorities, two conditions must be 
fulfilled: the activities must be carried 
out by a body governed by public law 
and they must be carried out by that 
body acting as a public authority. As 
regards the latter condition, activities 
pursued as public authorities are those 
engaged in by bodies governed by 
public law under the special legal 
regime applicable to them and do not 
include activities pursued by them 
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COMMISSION V IRELAND 
under the same legal conditions as 
those that apply to private traders. 
(see paras 37-38 ) 
3. Leaving aside the specific cases 
expressly listed in Article 13B(b) of 
the Sixth Directive 77/388 on the 
harmonisation of the laws of the 
Member States relating to turnover 
taxes, the term 'letting of immovable 
property' must be construed strictly 
since it constitutes an exception to the 
general VAT rules contained in that 
directive. Accordingly, that term can­
not be considered to cover contracts, 
such as those for the provision of roads 
infrastructure on payment of a toll, in 
which the parties have not agreed on 
any duration for the right of enjoyment 
of the immovable property, which is an 
essential element of a contract to let. 
(see paras 55-56 ) 
4. Despite the absence of a limitation 
period for the recovery of VAT in either 
the Sixth Directive 77/388 on the 
harmonisation of the laws of the 
Member States relating to turnover 
taxes or in the legislation relating to 
the Communities' own resources, the 
fundamental requirement of legal cer­
tainty may have the effect of preventing 
the Commission from indefinitely 
delaying, in the course of a procedure 
for failure to fulfil obligations seeking 
the retrospective payment of own 
resources, a decision to bring proceed­
ings. Article 9(2) of Regulation 
No 1553/89 on the definitive uniform 
arrangements for the collection of own 
resources accruing from value added 
tax does not refer to the situation in 
which the procedure for failure to fulfil 
obligations under Article 169 of the 
Treaty (now Article 226 EC) has been 
initiated, but demonstrates none the 
less the requirements pertaining to 
legal certainty in budgetary matters 
by ruling out any correction to the 
annual statement after four budgetary 
years have elapsed. It is clear that the 
same considerations of legal certainty 
justify the application by analogy of 
the rule laid down by that provision 
where the Commission decides to initi­
ate the procedure for failure to fulfil 
obligations in order to seek retrospec­
tive payment of own resources accruing 
from VAT. 
(see paras 71-72, 75-76) 
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