WEG Tevesstraße v Finanzamt Villingen-Schwenningen.
Date: 2020-12-17
21


First of all, that premiss is actually supported by the actual purpose of the question referred for a preliminary ruling. The exemptions laid down by the VAT Directive are intended to be applied only to the activities falling within the scope of that directive (see, to that effect, judgments of 11 June 1998, Fischer, C‑283/95, EU:C:1998:276, paragraph 18; of 29 April 2004, EDM, C‑77/01, EU:C:2004:243, paragraph 59; and of 13 March 2008, Securenta, C‑437/06, EU:C:2008:166, paragraph 26), so that, if the supply of heat at issue in the main proceedings did not fall within the scope of the VAT Directive, the issue whether or not that directive precludes an exemption such as the one in Paragraph 4(13) of the UStG would not arise. In addition, that premiss is confirmed by the fact that the referring court, in its request for a preliminary ruling, expressly refers to Article 2(1)(a) of the VAT Directive.
24


In that regard, it should be observed that, although the VAT Directive gives a very wide scope to VAT, only activities of an economic nature are covered by that tax (judgment of 2 June 2016, Lajvér, C‑263/15, EU:C:2016:392, paragraph 20 and the case-law cited).
25


According to Article 2(1)(a) of the VAT Directive, relating to taxable transactions, the supply of goods for consideration within the territory of a Member State by a taxable person acting as such, inter alia, is subject to VAT (judgment of 2 June 2016, Lajvér, C‑263/15, EU:C:2016:392, paragraph 21 and the case-law cited).
27


As regards the issue whether a supply takes place for consideration, it should be recalled that the Court has repeatedly held that the fact that a supply of goods is carried out ‘for consideration’, for the purposes of Article 2(1)(a) of the VAT Directive, requires the existence of a direct link between the service provided and the consideration received. Such a direct link exists only if there is a legal relationship between the supplier and the purchaser entailing reciprocal performance, the price received by the supplier constituting the value actually given in return for the goods supplied. Further, that consideration must have a subjective value that is actually received and is capable of being expressed in monetary terms (judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 43 and the case-law cited).
29


With regard to the notion of ‘taxable person for VAT purposes’, and even though the status of a taxable person for VAT purposes in an association of residential property owners such as the WEG Tevesstraße does not appear to have been called into question by the referring court, it should be recalled that, under Article 9(1) of the VAT Directive, a ‘taxable person’ means ‘any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity’. According to the case-law of the Court, the terms used in Article 9(1) of the VAT Directive, in particular the term ‘any person who’, give to the notion of ‘taxable person’ a broad definition focused on independence in the pursuit of an economic activity to the effect that all persons – natural or legal, both public and private, even entities devoid of legal personality – which, in an objective manner, satisfy the criteria set out in that provision must be regarded as being taxable persons for the purposes of VAT (see, to that effect, judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 27 and the case-law cited).
30


In order to establish that an economic activity is being carried out in an independent manner, it is necessary to examine whether the persons concerned perform their activities in their own name, on their own behalf and under their own responsibility, and whether they bear the economic risk associated with carrying out those activities (judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 28 and the case-law cited).
34


The notion of ‘economic activity’ is defined in the second subparagraph of Article 9(1) of the VAT Directive as covering all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. It is apparent from the Court’s case-law that that definition shows that the scope of the term ‘economic activities’ is very wide and that the term is objective in character, in the sense that the activity is considered per se and without regard to its purpose or results. Thus, an activity is generally classified as economic where it is permanent and is carried out in return for remuneration which is received by the person carrying out the activity (see, to that effect, judgment of 12 November 2009, Commission v Spain, C‑154/08, not published, EU:C:2009:695, paragraph 89 and the case-law cited).
35


Even if the activities carried on by an association of residential property owners such as WEG Tevesstraße consist in exercising the functions assigned to it by national legislation, that fact is in itself irrelevant for the purposes of classifying the provision of those services as economic activities (see, to that effect, judgment of 29 October 2015, Saudaçor, C‑174/14, EU:C:2015:733, paragraphs 39 and 40).
37


It is apparent both from the wording of Article 9(1) of the VAT Directive and from the case-law of the Court that, for a finding that the exploitation of tangible or intangible property is carried out for the purpose of obtaining income therefrom, it is irrelevant whether or not that exploitation is intended to make a profit (judgment of 2 June 2016, Lajvér, C‑263/15, EU:C:2016:392, paragraph 35 and the case-law cited).
39


Having clarified that, it is appropriate to examine, in the first place, the issue raised by the referring court and by the German Government whether an exemption such as the one in Paragraph 4(13) of the UStG may come under Article 135(1)(l) of the VAT Directive, by which Member States exempt ‘the leasing or letting of immovable property’. In that regard, it is important to recall that, according to settled case-law, the terms used to describe the exemptions envisaged by Article 135(1) of the VAT Directive, including the notions of ‘leasing’ and ‘letting of immovable property’, are to be interpreted strictly since these exemptions constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see, inter alia, judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 37 and the case-law cited).
40


In addition, in the absence of a definition of those notions in the VAT Directive, the Court defined the ‘letting of immovable property’, for the purposes of Article 135(1)(l) of that directive, as an arrangement whereby the lessor assigns to the lessee, in return for rent and for an agreed period, the right to occupy its property and to exclude any other person from it (see, inter alia, judgment of 19 December 2018, Mailat, C‑17/18, EU:C:2018:1038, paragraph 36 and the case-law cited).
41


The Court has also specified that the exemption provided for in Article 135(1)(l) of the VAT Directive is due to the fact that the letting of immovable property, whilst being an economic activity, is normally a relatively passive activity, not generating any significant added value. Such an activity is thus to be distinguished from other activities which are either industrial and commercial in nature, or have as their subject matter something which is best understood as the provision of a service rather than simply making property available, such as the right to use a golf course, the right to use a bridge in consideration of payment of a toll or the right to install cigarette machines in commercial premises (judgment of 2 July 2020, Veronsaajien oikeudenvalvontayksikkö (Computing centre services), C‑215/19, EU:C:2020:518, paragraph 41 and the case-law cited).
44


However, it is settled case-law that declarations made in the course of preparatory work leading to the adoption of a directive cannot be used for the purpose of interpreting that directive where no reference is made to the content of the declaration in the wording of the provision in question, and, moreover, such declarations have no legal significance (see, inter alia, judgment of 22 October 2009, Swiss Re Germany Holding, C‑242/08, EU:C:2009:647, paragraph 62 and the case-law cited).
48


It is true that, according to established case-law, the principle of fiscal neutrality, which was intended by the EU legislature to reflect, in matters relating to VAT, the general principle of equal treatment (judgment of 29 October 2009, NCC Construction Danmark, C‑174/08, EU:C:2009:669, paragraph 41 and the case-law cited), precludes in particular treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes (judgment of 14 December 2017, Avon Cosmetics, C‑305/16, EU:C:2017:970, paragraph 52 and the case-law cited). Furthermore, it is apparent from the case-law of the Court that that principle must be interpreted as meaning that a difference in treatment for the purposes of VAT of two deliveries of goods or two supplies of services which are identical or similar from the point of view of the consumer and meet the same needs of the consumer is sufficient to establish an infringement of that principle (see, to that effect, judgment of 10 November 2011, Rank Group, C‑259/10 and C‑260/10, EU:C:2011:719, paragraph 36). However, it must be pointed out that the line of argument advanced by the German Government is based on a comparison of supplies of goods to two clearly distinct groups of consumers and that the fact that those groups are potentially treated differently is merely the consequence of the choice made by the persons belonging to those groups to own or not to own a dwelling in a building under co-ownership.