Opinion of the Advocate General — ECLI:EU:C:2014:267
Date: 2014-04-10
Language of the case: Dutch
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary — Judgment of the Court (Fourth Chamber), 10 September 2014 1. Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Use of goods and services allocated to the business for the purpose of transactions other than the taxable transactions of the taxable person — Taxable person carrying out both economic activities which are subject to value added tax and non-economic activities which fall outside the scope of that scheme — Taxation not permitted (Council Directive 77/388, Art. 6(2)(a)) 2. Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Application of goods for the purposes of the business — First occupation by a municipal authority of premises built for it on land belonging to it — Treatment as a supply made for consideration — Deduction of input tax — Goods and services used both for transactions in respect of which VAT is deductible and in respect of which VAT is not deductible — Overall value of the land and the building — Use of the goods for the purposes of the taxable transactions (Council Directive 77/388, Arts 5(7)(a), 11A(1)(b) and 17(5)) 1. The option, stemming from Article 6(2)(a) of Sixth Council Directive 77/388/EEC on the harmonisation of the laws of the Member States relating to turnover taxes, of allocating goods to the assets used as a taxable person or to those used as a non-taxable person cannot be transposed to a situation in which a taxable person carries out both economic activities which are subject to VAT and non-economic activities which fall outside the scope of that scheme. (see para. 25) 2. Article 5(7)(a) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as applying to a situation in which a municipality takes first occupation of a building which it has had built on its own land and of which it intends to use 94% of the area for its activities as a public authority and 6% of that area for its activities as a taxable person, including 1% for exempt activities in respect of which no right to deduct VAT exists. The wording of that provision covers not only goods entirely produced, constructed, extracted or processed by the business concerned itself, but also goods produced, constructed, extracted or processed by a third party with materials provided by that business. Furthermore, treating as a supply made for consideration the application of such goods by a taxable person for the purposes of his business is possible only where the purchase of those goods from another taxable person would not confer upon the first taxable person the right to make a complete deduction of VAT. Finally, the entire amount of the input VAT paid by the municipality in respect of the acquisition of the goods for the purposes of the subsequent application must give rise to a right to deduct that VAT, in accordance with Article 17(2) of the Sixth Directive. That subsequent application is itself subject to VAT and the amount of the VAT for which the municipality is liable as a result of that application must be calculated, in accordance with Article 11A(1)(b) of the Sixth Directive, on the basis of the overall value of each of those elements, the land and the building, it being understood that VAT must not have been previously charged on those elements. However, the subsequent use of the building for the activities of the municipality may give rise to a right to deduct the tax paid in respect of the application provided for by that provision only in the proportion corresponding to its use for the purposes of the taxable transactions, pursuant to Article 17(5) of the Sixth Directive. (see paras 28, 30, 34, 35, 37, operative part)