Finanzamt Burgdorf v Hans-Georg Fischer and Finanzamt Düsseldorf-Mettmann v Klaus Brandenstein.
Date: 2001-05-17
56 In that regard, it should be noted that the purpose of Article 5(6) of the Sixth Directive is, in particular, to ensure equal treatment as between a taxable person who withdraws goods from his business and an ordinary consumer who buys goods of the same type. In pursuit of that objective, Article 5(6) prevents a taxable person who has been able to deduct VAT on the purchase of goods used for his business from escaping payment of VAT when he transfers those goods from his business to private purposes and from thereby enjoying advantages to which he is not entitled by comparison with an ordinary consumer who buys goods and pays VAT on them (see Case C-415/98 Bakcsi [2001] ECR I-1831, paragraph 42, and the case-law cited there).
62 As the German Government has emphasised the difficulty in distinguishing between supplies of goods and supplies of services, particularly where work is carried out on a motor vehicle, it should be observed that there is a consistent body of case-law to the effect that in order to determine whether a given transaction is a supply of goods or a supply of services, it is necessary to identify its characteristic features (Case C-231/94 Faaborg-Gelting Linien [1996] ECR I-2395, paragraph 12). Where a supply of goods is only one component of a transaction in which supplies of services predominate, the transaction must be regarded as a supply of services (Faaborg-Gelting Linien, paragraph 14).
73 In paragraph 44 of Bakcsi the Court held that when the taxable person has been unable to deduct the VAT on the business goods purchased second-hand from a non-taxable person, the VAT on such goods must be considered not to have been deductible for the purposes of Article 5(6) of the Sixth Directive and no tax may therefore be levied under that provision when they are allocated.
76 Taxation of the goods in such a situation, where the input tax was not deductible on purchase, would lead to double taxation contrary to the principle of fiscal neutrality inherent in the common system of VAT, of which the Sixth Directive forms part (see, with regard to Article 5(6) of the Sixth Directive, Bakcsi, paragraph 46, and with regard to heading (a) of the first subparagraph of Article 6(2) of the Sixth Directive, Kühne, paragraph 10, and Case C-193/91 Mohsche [1993] ECR I-2615, paragraph 9). Taxation of the component parts as defined in paragraph 70 above ensures, moreover, that the taxable person does not enjoy any advantage to which he is not entitled by comparison with an ordinary consumer.
80 The reference to the purchase price, determined at the time of allocation, may appear to be contradictory where goods are by definition acquired before they are allocated; however, it is taken from the actual wording of Article 11A(1)(b) of the Sixth Directive. It is necessary to specify that that refers to the residual value of the goods at the time of allocation.
86 Article 5(7) of the Sixth Directive provides that Member States may treat as supplies made for consideration the retention of goods by a taxable person or his successors when he ceases to carry out a taxable economic activity where the value added tax on such goods became wholly or partly deductible upon their acquisition or upon their application in accordance with Article 5(7)(a). Article 5(7)(c) thus authorises Member States to adopt a special provision for situations in which a taxable person ceases to trade.