A Oy.
Date: 2012-07-19
24. It is settled case-law that the interpretation of a provision of European Union law must, as a rule, take account of possible divergence between the different language versions of that provision (see, inter alia, Case C-382/02 Cimber Air  [2004] ECR I-8379, paragraph 38).
26. Firstly, on a strictly textual reading, the wording ‘international routes’ as found in certain language versions is not defined anywhere in the Sixth Directive and, as pointed out by the European Commission and the Finnish Government, are not supplemented by any further clarification indicating that flights concerned must be ‘regular’ in nature. In those circumstances, such wording may, like the expression ‘international routes’ used in the other language versions, be construed as referring, in essence, to flights made on an aircraft between two geographical points which make the transport concerned more international in nature than domestic. As the Court has held previously, Article 15(6) of the Sixth Directive is concerned in substance with airlines whose activities are chiefly international ( Cimber Air , paragraphs 27 and 28).
27. According to the Court’s settled case-law, in interpreting a provision of European Union law such as the one at issue here, it is necessary to consider not only its wording but also its context and the objectives pursued by the rules of which it is part (see, inter alia, Case C-185/89 Velker International Oil Company [1990] ECR I-2561, paragraph 17, and Case C-116/10 Felgen and Bacino Charter Company  [2010] ECR I-14187, paragraph 12 and the case-law cited).
31. Regarding the context surrounding Article 15(6) of the Sixth Directive, it should be borne in mind that, as is clear from consistent case-law, exemptions constitute independent concepts of European Union law which must be placed in the general context of the common system of VAT introduced by that directive (see, inter alia, Cimber Air , paragraph 23, and Case C-97/06 Navicon  [2007] ECR I-8755, paragraph 20).
32. That system is based inter alia on the principle of fiscal neutrality, which precludes economic operators carrying out the same transactions from being treated differently in relation to the levying of VAT (see, inter alia, Cimber Air , paragraph 24, and Navicon , paragraph 21). That principle does not require the transactions to be identical. According to settled case-law that principle precludes, in particular, treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes (see, inter alia, Case C-363/05 JP Morgan Fleming Claverhouse Investment Trust and The Association of Investment Trust Companies  [2007] ECR I-5517, paragraph 46 and the case-law cited).
33. The principle of fiscal neutrality includes the principle of elimination of distortion in competition as a result of differing treatment for VAT purposes. Therefore, distortion is established once it is found that supplies of services are in competition and are treated unequally for the purposes of VAT (see JP Morgan Fleming Claverhouse Investment Trust and The Association of Investment Trust Companies , paragraph 47 and the case-law cited).
49. Although, according to settled case-law, in the light of those principles, the exemptions envisaged in Article 15 of the Sixth Directive are to be interpreted strictly since they 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, Velker International Oil Company , paragraph 19; Cimber Air , paragraph 25; Joined Cases C-181/04 to C-183/04 Elmeka  [2006] ECR I-8167, paragraph 15; Navicon , paragraph 22; and Feltgen and Bacino Charter Company , paragraph 19), that requirement of strict interpretation does not mean that the terms used to specify the exemptions should be construed in such a way as to deprive those exemptions of their intended effect (see, inter alia, Navicon , paragraph 22).
53. Moreover, although it is true that the interpretation set out in paragraph 51 of this judgment may seem to depart somewhat from the one endorsed by the Court in respect of the exemptions provided for in Article 15(4) and (8) of the Sixth Directive in relation to supply operations for the provisioning of sea-going vessels and services performed to meet their direct needs (see Velker International Oil Company , paragraphs 21 and 22, and Elmeka , paragraphs 22 and 24), it is important to bear in mind that there is nothing requiring the approaches adopted in those cases to be applied to the interpretation of Article 15(6).
54. As evidenced, in particular, by paragraphs 23 to 25 of Elmeka , an extension of the exemption provided for in Article 15(4) and (8) of the Sixth Directive to stages prior to the final supply of goods or services made directly to the vessel operator was ruled out by the Court in those judgments, in particular because such an exemption would require Member States to set up means of supervision and monitoring in order to be sure of the ultimate use of the goods or services in question. Such means would give rise to constraints for the Member States and the economic agents concerned which would be irreconcilable with the ‘correct and straightforward application of such exemptions’ prescribed by the first sentence of Article 15 of the Sixth Directive (see also Velker International Oil Company , paragraph 24).
56. Making the exemption in such circumstances subject to the intended use being known and duly established as of the time of acquisition of the aircraft and to subsequent verification of the actual use of the aircraft by such an undertaking does not seem, in the light of the type of object at issue here and, inter alia, the registration and authorisation mechanisms in place for its use, to be liable to give rise to constraints for the Member States and the economic agents concerned which would be irreconcilable with the correct and straightforward application of the exemptions prescribed by the Sixth Directive.
57. In the light of all the foregoing, the answer to the second question is that Article 15(6) of the Sixth Directive must be interpreted as meaning that the exemption for which it provides also applies to the supply of an aircraft to an operator who is not itself an ‘airline operating for reward chiefly on international routes’ within the meaning of that provision but which acquires that aircraft for the purposes of exclusive use thereof by such an undertaking.
The third question
62. It should also be borne in mind, as pointed out by the Finnish Government in its observations, that it is common ground that the application of the European Union rules cannot be extended to cover abusive practices by economic operators, that is to say, transactions carried out not in the context of normal commercial operations, but solely for the purpose of wrongfully obtaining advantages provided for by European Union law, and that that principle of prohibiting abusive practices also applies to the sphere of VAT (see, inter alia, Case C-255/02 Halifax and Others [2006] ECR I-1609, paragraphs 69 and 70 and the case-law cited).
63. The effect of that principle is therefore to prohibit wholly artificial arrangements which do not reflect economic reality and are set up with the sole aim of obtaining a tax advantage (Case C-162/07 Ampliscientifica and Amplifin  [2008] ECR I-4019, paragraph 28).
64. Thus, in the interpretation of the Sixth Directive, an abusive practice can be found to exist if, firstly, the transactions concerned, notwithstanding formal application of the conditions laid down by the relevant provisions of that directive and the national legislation transposing it, result in the accrual of a tax advantage the grant of which would be contrary to the purpose of those provisions and, secondly, it is apparent from a number of objective factors that the essential aim of the transactions concerned is to obtain such a tax advantage (see Halifax and Others , paragraphs 74 and 75, and Case C-425/06 Part Service  [2008] ECR I-897, paragraph 42).
65. It is for the national court to verify in accordance with the rules of evidence of national law, provided that the effectiveness of European Union law is not undermined, whether action constituting such an abusive practice has taken place in the case before it ( Halifax and Others , paragraph 76).