Case C‑616/15

European Commission

v

Federal Republic of Germany

(Failure of a Member State to fulfil obligations — Taxation — Value added tax — Directive 2006/112/EC — Article 132(1)(f) — Exemption for services supplied to their members by Independent Groups of Persons — Restriction to independent groups whose members exercise a limited number of professions)

Summary — Judgment of the Court (Fourth Chamber), 21 September 2017

Harmonisation of fiscal legislation — Common system of value added tax — Exemptions — Exemptions for certain activities in the public interest — Supplies of services by independent groups of persons who are carrying on an activity which is exempt for the purpose of rendering services to their members — National legislation restricting the exemption to groups whose members exercise a limited number of professions — Failure to fulfil obligations — Justification — General risk of distortions of competition — Not permissible

(Council Directive 2006/112, Art. 132(1)(f))

A Member State which restricts the value added tax (VAT) exemption to Independent Groups of Persons whose members exercise a limited number of professions fails to fulfil its obligations under Article 132(1)(f) of Directive 2006/112 on the common system of value added tax.

Supplies of services by an Independent Group of Persons is covered by the exemption in Article 132(1)(f) of Directive 2006/112 where those supplies of services directly contribute to activities in the public interest mentioned in Article 132 thereof.

Furthermore, the exemptions referred to in Article 132 of Directive 2006/112 are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person.

As a result, supplies of services which do not directly contribute to the carrying on of activities in the public interest, referred to in Article 132 of Directive 2006/112, but to the exercise of other exempt activities, in particular in Article 135 thereof, cannot be covered by the exemption laid down in Article 132(1) of that directive.

It follows that Article 132(1)(f) of Directive 2006/112 must be interpreted as meaning that the exemption laid down in that provision covers only Independent Groups of Persons whose members carry on activities in the public interest mentioned in that article. Therefore, the Commission’s main complaint, that the scope of the exemption laid down in Article 132(1)(f) of Directive 2006/112 is not limited to Independent Groups of Persons whose members carry on activities in the public interest, must be dismissed.

In order to determine whether the application of the exemption mentioned in Article 132(1)(f) of Directive 2006/112 to a specific activity is likely to cause distortion of competition, it must be observed that the Member States are not obliged to transpose that criterion literally into their national law. It is certainly possible for the national legislature to lay down rules which are easily managed and supervised by the competent authorities. Under Article 131 of Directive 2006/112, Member States are to lay down conditions to which the exemptions are subject for the purposes of ensuring their correct and straightforward application. However, those conditions do not concern the definition of the content of the exemptions laid down by that directive.

(see paras 48-51, 64, 65, 72, operative part)