Opinion of the Advocate General — ECLI:EU:C:1998:106
Date: 1998-03-12
Language of the case: English
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: United Kingdom

Summary of the Judgment
Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added
tax — Sixth Directive — Scope — Supply of counterfeit perfume products — Covered
(Council Directive 77/388, Art. 2)
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SUMMARY — CASE C-3/97
Although unlawful imports or supplies of
goods, such as narcotics or counterfeit cur­
rency, which, because of their intrinsic
nature or special characteristics, cannot be
placed on the market or incorporated into
economic channels are wholly alien to the
provisions of the Sixth Directive on the har­
monisation of the laws of the Member States
relating to turnover taxes, that is not the pos­
ition in the case of counterfeit perfumes.
Transactions involving counterfeit products
infringe intellectual property rights. How­
ever, any consequential prohibition is not
linked to the nature or essential characteris­
tics of such products, but to their detrimen­
tal impact on the rights of third parties, and
is conditional, not absolute.
Furthermore, counterfeit perfumes cannot be
regarded as extra commercium, since there
can be competition between counterfeit
products and goods which are lawfully
traded.
Accordingly, on a proper construction of
Article 2 of the Sixth Directive, VAT is pay­
able on the supply of counterfeit perfumes.
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