Case C-144/02: Action brought on 17 April 2002 by the Commission of the European Communities against the Federal Republic of Germany
Date: 2002-06-29
Institutions: Court of Justice
Subjects: European Commission, Germany, VAT, action for failure to fulfil an obligation, common organisation of markets, fodder

C 156/6

EN

Official Journal of the European Communities

29.6.2002

Action brought on 17 April 2002 by the Commission of
the European Communities against the Federal Republic
of Germany

therefore observed, even where the subsidy payment is taxable
as part of the consideration received in return for the sale of
the products (or the provision of the services).

(Case C-144/02)

(2002/C 156/10)

An action against the Federal Republic of Germany was
brought before the Court of Justice of the European Communi-
ties on 17 April 2002 by the Commission of the European
Communities, represented by Enrico Traversa, Legal Adviserl,
and Kilian Gross, of its Legal Service, with an address for
service in Luxembourg at the office of Luis Escobar Guerrero,
of its Legal Service, at Wagner Centre C 254, Kirchberg,
Luxembourg.

The applicant claims that the Court should:

1.

declare that by failing to make financial aid payable under
Council Regulation (EC) No 603/95 (1) of 21 February
1995 on the common organisation of the market in dried
fodder subject to VAT (value added tax), the Federal
Republic of Germany has failed to fulfil its obligations
under Article 11 of the Sixth VAT Directive (Council
Directive 77/388/EEC) (2);

2.

order the Federal Republic of Germany to pay the costs
of the proceedings.

Pleas in law and main arguments

In its reference to ‘subsidies directly linked to the price of such
[taxable] supplies’, the Community legislator intended, by
using such general wording,
to include in the basis of
assessment for VAT purposes all subsidies directly related to
i.e.,
the price of the goods sold or the services provided,
subsidies which have a direct effect on the amount of
consideration received by the supplier. There must be a
direct, causal relationship, which is precisely quantified or
quantifiable, between those subsidies and the supply of the
goods or services: the subsidy is granted where and to the
extent that those goods (or services) are, in fact, sold on the
market. The subsidy granted per tonne of dried fodder pursuant
to Directive 603/95 has such a direct, causal effect on the sale
price of dried fodder. The processing undertakings can sell the
dried fodder at the world market price, which is less than the
price they would have to charge on the basis of their costs,
only because they are in receipt of the relevant subsidies. The
fact that the level of the subsidy is not adjusted to take account
of fluctuations in the world market price, does not alter the
fact that the subsidy acts as a price supplement. The spirit and
the purpose of Article 11(A)1(a) of the Sixth VAT Directive is

The fact that when the products leave the processing undertak-
ing, the subsidy is effectively paid as an advance on the total
sale price even if there is no actual contract with the recipient
of the products, does not preclude the subsidy from forming
part of the consideration. Even though for each individual sale
it may be impossible to calculate the exact proportion of
the consideration constituted by the subsidy, no practical
difficulties are to be expected. The taxable amount is instead
calculated on the basis of the consideration obtained plus the
total subsidies received. In the Commission’s view, the fact
that the majority of Member States already tax dried fodder
subsidies shows that no difficulties arise in practice.

(1) OJ L 63, 21.3.1995, p. 1.
(2) OJ L 145, 13.6.1977, p. 1.

Action brought on 25 April 2002 by the Commission of
the European Communities against the Kingdom of the
Netherlands

(Case C-149/02)

(2002/C 156/11)

An action against the Kingdom of the Netherlands was brought
before the Court of Justice of the European Communities
on 25 April 2002 by the Commission of the European
Communities, represented by H. van Lier and M. Patakia,
acting as Agents.

The applicant claims that the Court should:

1. Declare that, by failing to bring into force the laws,
regulations and administrative provisions necessary to
comply with Directive 98/5/EC (1) of the European Parlia-
ment and of the Council of 16 February 1998 to facilitate
practice of the profession of lawyer on a permanent
basis in a Member State other than that in which the
qualification was obtained, or in any event by failing to
inform the Commission of those provisions, the Kingdom
of the Netherlands has failed to fulfil its obligations under
that directive;

2. Order the Kingdom of the Netherlands to pay the costs.