État belge v Medicom SPRL (C‑210/11) and Maison Patrice Alard SPRL (C‑211/11).
Date: 2013-07-18
21. In order to answer that question, it is appropriate to bear in mind the settled case‑law of the Court, according to which a taxable person may choose whether or not to integrate into his business, for the purposes of applying the Sixth Directive, part of an asset which is given over to his private use (see, inter alia, Case C‑291/92 Armbrecht  [1995] ECR I-2775, paragraph 20, and Seeling , paragraph 40).
22. If the taxable person chooses to treat capital goods used both for business and private purposes as business goods, the VAT due as input tax on the acquisition of those goods is in principle wholly and immediately deductible (see, inter alia, Case C-97/90 Lennartz  [1991] ECR I-3795, paragraph 26, and Seeling , paragraph 41).
23. It follows from point (a) of the first paragraph of Article 6(2) and from Article 11A(1)(c) of the Sixth Directive that the use of capital goods for the private use of a taxable person or of his staff or for purposes other than those of his business, where the input VAT paid on such goods is wholly or partly deductible, is treated as a supply of services for consideration and is taxed on the basis of the cost of providing the services (see Lennartz , paragraph 26, and Seeling , paragraph 42).
25. As regards the cumulative application of point (a) of the first paragraph of Article 6(2) and Article 13(B)(b) of the Sixth Directive in the case of private use by the taxable person or his staff of part of a building forming in its entirety part of the assets of a business, the Court has held that those provisions preclude national legislation which – despite the fact that the characteristics of the leasing or the letting of immovable property for the purposes of Article 13(B)(b) are not present – treats as a supply of services exempt from VAT under that provision the private use, by the staff of a taxable person which is a legal person, of part of a building constructed or owned by virtue of a right in rem in immovable property, held by that taxable person, where the input tax on that business asset is deductible (see, to that effect, Seeling , paragraph 56, and Case C‑436/10 BLM  [2012] ECR I-0000, paragraph 31).
26. Therefore, in order for there to be letting of immovable property within the meaning of Article 13(B)(b) of the Sixth Directive, all the conditions characterising that transaction must be satisfied, that is to say, the landlord of property must have assigned to the tenant, in return for rent and for an agreed period, the right to occupy his property and to exclude other persons from it (Case C‑409/98 Mirror Group  [2001] ECR I‑7175, paragraph 31; Case C‑108/99 Cantor Fitzgerald International  [2001] ECR I‑7257, paragraph 21; and Seeling , paragraph 49).
27. Article 13(B)(b) of the Sixth Directive constitutes an exception to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person and it must therefore be interpreted strictly. If one of the conditions referred to in the preceding paragraph is not fulfilled, that provision may not be applied by analogy on the ground that private use of immovable property forming part of the assets of a business for residential purposes most closely resembles a letting within the meaning of that provision from the point of view of final consumption (see, to that effect, Seeling , paragraphs 44 and 45).
28. Regarding more specifically the condition that there must be a payment of rent, without calling into question the case-law to the effect that the concept of ‘supply of goods … effected for consideration’ within the meaning of Article 2(1) of the Sixth Directive requires the existence of a direct link between the service provided and the consideration received (see, inter alia, Case C‑40/09 Astra Zeneca UK  [2010] ECR I‑7505, paragraph 27), it should be observed that the absence of rent being paid cannot be compensated for by the fact that, for income tax purposes, that private use of immovable property forming part of the assets of the business is viewed as constituting a benefit in kind and therefore, in some way, as part of the remuneration which the beneficiary has given up by way of consideration for having the immovable property in question being made available to him.
29. First of all, as the Court held in paragraph 45 of Seeling , Article 13(B)(b) of the Sixth Directive cannot be applied by analogy by equating a benefit in kind, evaluated for the calculation of income tax, with rent, as suggested by the Belgian Government.
30. Next, contrary to the assertions made by the Belgian Government, situations such as those at issue in the main proceedings cannot be compared with the facts at issue in the case which gave rise to the judgment in Astra Zeneca UK . As evidenced by paragraphs 29 to 31 of that judgment, it was established that, in that case, there was a direct link between the provision of retail vouchers by Astra Zeneca Ltd to its employees and the part of the cash remuneration which the employees had to give up as consideration for that provision. In the cases at hand here, by contrast, it is not established either that the managers have suffered a reduction in salary corresponding to the value of having the building in question being made available to them or certain that part of the work done by those managers can be regarded as consideration for having the building in question being made available to them (see, by analogy, Case C‑258/95 Fillibeck  [1997] ECR I‑5577, paragraphs 15 and 16).
31. Lastly, it is apparent from paragraph 15 of the judgment in BLM that the Court was aware that, under the national legislation at issue in the case giving rise to that judgment, which was, moreover, identical to the legislation at issue in the cases in the main proceedings here, private use for residential purposes of immovable property made available to a director of the company BLM SA, without any rent in the form of money being charged, was treated as a benefit in kind for the purposes of income tax for natural persons, calculated as a lump sum. That treatment, which was not referred to in paragraphs 23 to 30 of that judgment, clearly had no bearing on the Court’s interpretation.
32. Such an interpretation is not called into question by the fact that the Court held, in paragraph 32 of BLM , that it was for the referring court to determine whether, in a situation such as that at issue in the case before it, a finding could be made that there was a letting of immovable property for the purposes of Article 13(B)(b) of the Sixth Directive.
33. It is common ground that it is for the national courts, which alone are competent to assess the facts, to establish, in the light of the specific circumstances of each case, the essential characteristics of the transaction in question in order to classify it under the Sixth Directive (see, to that effect, Case C‑530/09 Inter-Mark Group [2011] ECR I-0000, paragraph 32). Since it is not for the Court of Justice to rule on the action in the main proceedings, it must leave it to the referring court to do so, bearing in mind that there may be evidence other than that contained in the file submitted to the Court, liable to prove that all the features of letting for the purposes of Article 13(B)(b) of the Sixth Directive were present in the case before it.
34. In the light of the foregoing considerations, the answer to the first question is that point (a) of the first paragraph of Article 6(2) and Article 13(B)(b) of the Sixth Directive must be interpreted as precluding the making available of part of immovable property belonging to a legal person to its manager for his private use, without there being provision for the beneficiaries of that arrangement to pay a rent in money by way of consideration for the use of that property, from constituting an exempted letting of immovable property within the meaning of that directive; the fact that the making available of that property is deemed, under the relevant national income tax legislation, to be a benefit in kind stemming from the beneficiaries’ performance of their corporate duties or under their contract of employment is of no import in that regard.
Consideration of the second question
36. It should be borne in mind in that regard that, according to the Court’s settled case-law, it is the acquisition of the goods by a taxable person acting as such that gives rise to the application of the VAT system and therefore of the deduction mechanism. The use to which the goods are put, or intended to be put, merely determines the extent of the initial deduction to which the taxable person is entitled under Article 17 of the Sixth Directive and the extent of any adjustments in the course of the following periods ( Lennartz , paragraph 15). By contrast, where a taxable person acquires goods solely for his private requirements, he is acting in a private capacity and not as a taxable person for the purposes of that directive (Case C‑20/91 de Jong  [1992] ECR I‑2847, paragraph 17).