Case C‑446/13

Fonderie 2A

v

Ministre de l’Économie et des Finances

(Request for a preliminary ruling from the Conseil d’État (France))

‛Reference for a preliminary ruling — Sixth VAT Directive — Article 8(1)(a) — Determination of the place of supply of goods — Supplier established in a Member State other than the Member State in which the person to whom the goods are supplied is established — Processing of the goods in the Member State where the person to whom the goods are supplied is established’

Summary — Judgment of the Court (Second Chamber), 2 October 2014

Harmonisation of fiscal legislation — Common system of value added tax — Supply of goods — Determination of the place of supply of goods in the case of dispatch or transport — Time at which dispatch to the person to whom the goods are being supplied begins in the event of an interruption in order for the goods to be processed in the Member State where that person is established

(Council Directive 77/388, Arts 5(1) and 8(1)(a))

Article 8(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that the place of supply of goods sold by a company established in a Member State to a person established in another Member State, and on which the vendor, to make them fit to be supplied, has had finishing work carried out by a service provider established in that other Member State, before having them dispatched by the service provider to the person to whom they are being supplied, must be deemed to be in the Member State where the latter is established.

First, on a literal interpretation of that provision, the view cannot be taken that the place of a supply such as the supply in the case in point is in the Member State where the supplier is established, since the only goods that are the subject of the contract between the supplier of the goods and the person to whom they have been supplied, that is to say, the finished goods, were, ‘at the time when dispatch or transport to the person to whom they [were] supplied [began]’, within the meaning of Article 8(1)(a) of the Sixth Directive, already in the Member State where the latter is established.

Second, this literal interpretation is borne out by the broad logic of that provision. The place of a ‘supply of goods’ within the meaning of Article 5(1) of the Sixth Directive, that is to say, the place where the right to dispose of tangible property as owner is transferred, must be determined in accordance with the rules laid down in Article 8(1) of the Sixth Directive. When a supplier of goods dispatches the goods to a service provider instructed to carry out finishing work, he does not transfer the right to dispose of the goods in question as owner to the person to whom the goods are being supplied. Such a dispatch is concerned solely with rendering the goods in question compliant with the supplier’s contractual obligations so that a supply to that person may subsequently take place.

Finally, such an interpretation is consistent with the objective of the provisions of the Sixth Directive relating to determination of the place of taxable transactions, which seek to avoid both double taxation and non-taxation of those transactions.

(see paras 27, 28, 31, 32, operative part)

Case C‑446/13

Fonderie 2A

v

Ministre de l’Économie et des Finances

(Request for a preliminary ruling from the Conseil d’État (France))

‛Reference for a preliminary ruling — Sixth VAT Directive — Article 8(1)(a) — Determination of the place of supply of goods — Supplier established in a Member State other than the Member State in which the person to whom the goods are supplied is established — Processing of the goods in the Member State where the person to whom the goods are supplied is established’

Summary — Judgment of the Court (Second Chamber), 2 October 2014

Harmonisation of fiscal legislation — Common system of value added tax — Supply of goods — Determination of the place of supply of goods in the case of dispatch or transport — Time at which dispatch to the person to whom the goods are being supplied begins in the event of an interruption in order for the goods to be processed in the Member State where that person is established

(Council Directive 77/388, Arts 5(1) and 8(1)(a))

Article 8(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that the place of supply of goods sold by a company established in a Member State to a person established in another Member State, and on which the vendor, to make them fit to be supplied, has had finishing work carried out by a service provider established in that other Member State, before having them dispatched by the service provider to the person to whom they are being supplied, must be deemed to be in the Member State where the latter is established.

First, on a literal interpretation of that provision, the view cannot be taken that the place of a supply such as the supply in the case in point is in the Member State where the supplier is established, since the only goods that are the subject of the contract between the supplier of the goods and the person to whom they have been supplied, that is to say, the finished goods, were, ‘at the time when dispatch or transport to the person to whom they [were] supplied [began]’, within the meaning of Article 8(1)(a) of the Sixth Directive, already in the Member State where the latter is established.

Second, this literal interpretation is borne out by the broad logic of that provision. The place of a ‘supply of goods’ within the meaning of Article 5(1) of the Sixth Directive, that is to say, the place where the right to dispose of tangible property as owner is transferred, must be determined in accordance with the rules laid down in Article 8(1) of the Sixth Directive. When a supplier of goods dispatches the goods to a service provider instructed to carry out finishing work, he does not transfer the right to dispose of the goods in question as owner to the person to whom the goods are being supplied. Such a dispatch is concerned solely with rendering the goods in question compliant with the supplier’s contractual obligations so that a supply to that person may subsequently take place.

Finally, such an interpretation is consistent with the objective of the provisions of the Sixth Directive relating to determination of the place of taxable transactions, which seek to avoid both double taxation and non-taxation of those transactions.

(see paras 27, 28, 31, 32, operative part)