Opinion of the Advocate General — ECLI:EU:C:2006:555
Date: 2006-09-13
Language of the case: French
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: France

Summary of the Judgment Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable amount (Council Directive 77/388, Arts 2(1) and 6(1)) Articles 2(1) and 6(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes are to be interpreted as meaning that a sum paid as a deposit, in the context of a contract relating to the supply of hotel services which is subject to value added tax, is to be regarded, where the client exercises the cancellation option available to him and that sum is retained by the hotelier, as a fixed cancellation charge paid as compensation for the loss suffered as a result of client default and which has no direct connection with the supply of any service for consideration and, as such, is not subject to that tax. The payment of a deposit by the client, on the one hand, and the obligation of the hotelier, on the other, not to contract with anyone else in such a way as to prevent it from honouring its undertaking towards that client cannot be classified as reciprocal performance, because the obligation in those circumstances arises directly from the contract for accommodation, not from the payment of the deposit. Thus when, following a reservation, the hotelier provides the agreed service, he does no more than honour the contract entered into with his client, in accordance with the principle that contracts must be performed. Accordingly, the fulfilment of that obligation cannot be classified as consideration for the payment of a deposit. (see paras 23, 25, 36, operative part)