Case C-32/03: Reference for a preliminary ruling by the Højesterets Anke- og Kæremålsudvalg by order of that Court of 22 January 2003 in the case of I/S Fini H against Skatteministeriet
Date: 2003-04-05
Institutions: Court of Justice
Subjects: VAT, cessation of trading, interpretation of the law, lease, self-employed person

C 83/6

EN

Official Journal of the European Union

5.4.2003

Reference for a preliminary ruling by the Højesterets
Anke- og Kæremålsudvalg by order of that Court of
22 January 2003 in the case of I/S Fini H against Skatte-
ministeriet

Action brought on 28 January 2003 by the Commission
the United
of

the European Communities against
Kingdom of Great Britain and Northern Ireland

(Case C-32/03)

(2003/C 83/10)

(Case C-33/03)

(2003/C 83/11)

Reference has been made to the Court of Justice of the
European Communities by order of the Højesterets Anke- og
Kæremålsudvalg (Appeals and Objections Committee of the
Supreme Court) of 22 January 2003, received at the Court
Registry on 28 January 2003, for a preliminary ruling in the
case of I/S Fini H against Skatteministeriet (Danish Ministry of
Taxation) on the following questions:

Q u e s t i o n 1

Can a person be regarded as independently carrying on an
economic activity within the meaning of Article 4(1)-(3) of the
Sixth VAT Directive (1) in a situation in which the person
concerned originally entered into a lease agreement as part of
an independent economic activity but has now ceased that
actual activity, even though the lease continues to exist for a
particular period as a result of a non-termination clause, and
in which, after the actual activity ceases, no transactions
subject to VAT are conducted by application of the lease for
the purpose of obtaining income therefrom on a continuing
basis.

Q u e s t i o n 2

Does the question whether or not the person concerned
actively seeks, during the remaining part of the period of non-
terminability, either to utilise the commercial lease to conduct
transactions subject to VAT for the purpose of obtaining
income therefrom on a continuing basis or to dispose thereof
have any bearing on the answer to Question 1 and does the
length of the period of non-terminability or the remaining part
thereof likewise have any bearing?

( 1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the
harmonization of the laws of the Member States relating to
turnover taxes — Common system of value added tax: uniform
basis of assessment (OJ L 145, 13.6.1977, p. 1).

An action against the United Kingdom of Great Britain and
Northern Ireland was brought before the Court of Justice of
the European Communities on 28 January 2003 by the
Commission of the European Communities, represented by
R. Lyal, acting as agent, with an address for service in
Luxembourg.

The Applicant claims that the Court should:

(1) declare that by granting taxable persons the right to
deduct value added tax in respect of certain supplies of
road fuel to non-taxable persons, contrary to Articles 17
and 18 of the Sixth Council Directive of 17 May 1977
(77/388/EEC) on the harmonisation of the laws of the
Member States relating to turnover taxes — common
system of value added tax: uniform basis of assessment (1),
the United Kingdom has failed to fulfil its obligations
under the EC Treaty;

(2) order the United Kingdom to pay the costs.

Pleas in law and main arguments

By virtue of the VAT (Input Tax) (Person Supplied) Order 1991
[hereinafter, ‘the disputed Order’], a taxable person is granted
the right to deduct VAT in respect of supplies of road fuel to a
non-taxable person, where the taxable person reimburses to
the latter the cost of the fuel. Although the language of the
Order is general,
it appears that the right of deduction is
granted to employers in respect of purchases of road fuel by
their employees.

In the Commission’s view, the provisions of the Order are
contrary to the Sixth VAT Directive in three respects and in
relation to two provisions. First of all, the disputed Order
grants a right of deduction in respect of supplies to another,
non-taxable, person, contrary to Article 17(2)(a). Secondly, the
measure does not state that deduction can be granted only in
respect of goods and services used for the purposes of taxable
transactions; it thus fails to comply with the condition to that
effect set out in Article 17(2). Finally, deduction is granted in
the absence of any VAT invoice, contrary to Article 18(1)(a).

(1) OJ L 145, 13.6.1977, p. 1.