CELEX: C2002/156/10
Language: en
Date: 2002-06-29 00:00:00
Title: Case C-144/02: Action brought on 17 April 2002 by the Commission of the European Communities against the Federal Republic of Germany

C 156/6                 EN                    Official Journal of the European Communities                                        29.6.2002
Action brought on 17 April 2002 by the Commission of                     therefore observed, even where the subsidy payment is taxable
the European Communities against the Federal Republic                    as part of the consideration received in return for the sale of
                            of Germany                                   the products (or the provision of the services).
                         (Case C-144/02)                                 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
                         (2002/C 156/10)                                 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
An action against the Federal Republic of Germany was                    difficulties are to be expected. The taxable amount is instead
brought before the Court of Justice of the European Communi-             calculated on the basis of the consideration obtained plus the
ties on 17 April 2002 by the Commission of the European                  total subsidies received. In the Commission’s view, the fact
Communities, represented by Enrico Traversa, Legal Adviserl,             that the majority of Member States already tax dried fodder
and Kilian Gross, of its Legal Service, with an address for              subsidies shows that no difficulties arise in practice.
service in Luxembourg at the office of Luis Escobar Guerrero,
of its Legal Service, at Wagner Centre C 254, Kirchberg,
Luxembourg.
                                                                         (1) OJ L 63, 21.3.1995, p. 1.
                                                                         (2) OJ L 145, 13.6.1977, p. 1.
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               Action brought on 25 April 2002 by the Commission of
      Directive 77/388/EEC) (2);                                         the European Communities against the Kingdom of the
                                                                                                    Netherlands
2.    order the Federal Republic of Germany to pay the costs
      of the proceedings.                                                                        (Case C-149/02)
                                                                                                 (2002/C 156/11)
Pleas in law and main arguments
                                                                         An action against the Kingdom of the Netherlands was brought
In its reference to ‘subsidies directly linked to the price of such      before the Court of Justice of the European Communities
[taxable] supplies’, the Community legislator intended, by               on 25 April 2002 by the Commission of the European
using such general wording, to include in the basis of                   Communities, represented by H. van Lier and M. Patakia,
assessment for VAT purposes all subsidies directly related to            acting as Agents.
the price of the goods sold or the services provided, i.e.,
subsidies which have a direct effect on the amount of
consideration received by the supplier. There must be a                  The applicant claims that the Court should:
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               1.    Declare that, by failing to bring into force the laws,
extent that those goods (or services) are, in fact, sold on the                regulations and administrative provisions necessary to
market. The subsidy granted per tonne of dried fodder pursuant                 comply with Directive 98/5/EC (1) of the European Parlia-
to Directive 603/95 has such a direct, causal effect on the sale               ment and of the Council of 16 February 1998 to facilitate
price of dried fodder. The processing undertakings can sell the                practice of the profession of lawyer on a permanent
dried fodder at the world market price, which is less than the                 basis in a Member State other than that in which the
price they would have to charge on the basis of their costs,                   qualification was obtained, or in any event by failing to
only because they are in receipt of the relevant subsidies. The                inform the Commission of those provisions, the Kingdom
fact that the level of the subsidy is not adjusted to take account             of the Netherlands has failed to fulfil its obligations under
of fluctuations in the world market price, does not alter the                  that directive;
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           2.    Order the Kingdom of the Netherlands to pay the costs.