Erna Pelzl and Others v Steiermärkische Landesregierung (C-338/97), Wiener Städtische Allgemeine Versicherungs AG and Others v Tiroler Landesregierung (C-344/97) and STUAG Bau-Aktiengesellschaft v Kärntner Landesregierung (C-390/97).
Date: 1999-06-08
13 It is necessary in that regard to recall the objectives pursued by the introduction of a common system of VAT.
14 According to the preamble to the First Council Directive (67/227/EEC) of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes (OJ, English Special Edition 1967, p. 14, hereinafter `the First Directive'), the harmonisation of legislation concerning turnover taxes is intended to bring about the establishment of a common market within which competition is not distorted, and whose characteristics are similar to those of a domestic market, by eliminating differences in the imposition of tax such as to distort competition and impede trade.
15 The introduction of a common system of VAT was achieved by the Second Council Directive (67/228/EEC) of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes - Structure and procedures for application of the common system of value added tax (OJ, English Special Edition 1967, p. 16, hereinafter `the Second Directive') and by the Sixth Directive.
16 The Court has consistently held (see, most recently, Case C-318/96 SPAR v Finanzlandesdirektion für Salzburg [1998] ECR I-785) that the principle of the common system of VAT consists, by virtue of Article 2 of the First Directive, in the application to goods and services up to the retail stage of a general tax on consumption which is exactly proportional to the price of the goods and services, irrespective of the number of transactions which take place in the production and distribution process before the stage at which the tax is charged.
17 However, VAT is chargeable on each transaction only after deduction of the amount of VAT borne directly by the costs of the various price components.  The procedure for deduction is so arranged by Article 17(2) of the Sixth Directive that taxable persons are authorised to deduct from the VAT for which they are liable the VAT which the goods or services have already borne and that the tax is charged, at each stage, only on the added value and is finally borne by the ultimate consumer.
18 In order to attain the objective of ensuring equal conditions of taxation for the same transaction, no matter in which Member State it is carried out, the common system of VAT was intended, according to the preamble to the Second Directive, to replace the turnover taxes in force in the various Member States.
19 Article 33 of the Sixth Directive accordingly permits a Member State to maintain or introduce taxes, duties or charges on the supply of goods, the provision of services or imports only if they cannot be characterised as turnover taxes.
20 In order to decide whether a tax, duty or charge can be characterised as a turnover tax within the meaning of Article 33 of the Sixth Directive, it is necessary, in particular, to determine whether it has the effect of jeopardising the functioning of the common system of VAT by being levied on the movement of goods and services and on commercial transactions in a way comparable to VAT.  The Court has stated in this regard that taxes, duties and charges must in any event be regarded as being imposed on the movement of goods and services in a way comparable to VAT if they exhibit the essential characteristics of VAT (see Case C-200/90 Dansk Denkavit and Poulsen v Skatteministeriet [1992] ECR I-2217).
21 The Court finds in this connection that the essential features of VAT are as follows: it applies generally to transactions relating to goods or services; it is proportional to the price charged by the taxable person in return for the goods and services which he has supplied; it is charged at each stage of the production and distribution process, including that of retail sale, irrespective of the number of transactions which have previously taken place; the amounts paid during the preceding stages of the process are deducted from the tax payable by a taxable person, with the result that the tax applies, at any given stage, only to the value added at that stage and the final burden of the tax rests ultimately on the consumer (see, to that effect, Case C-347/90 Bozzi [1992] ECR I-2947).
24 Second, the charges are not passed on to the final consumer in a manner characteristic of VAT.  Even on the assumption that an undertaking selling to final consumers will take account, in fixing its price, of the amount of the charge included in its general expenses, not all undertakings have the possibility of thus passing on, or passing on in full, the burden of the tax.
25 Third, since the charges to promote tourism are calculated, subject to certain exemptions, on the basis of an overall annual turnover, it is not possible to determine the precise amount of the charge passed on to the customer when each sale is effected or each service supplied, and the condition that this amount should be proportional to the price charged by the taxable person is thus not satisfied either.
27 Thus, even on the assumption that the charges at issue in the main proceedings are generally or almost generally applicable in the federal Länder in question, that would not suffice for them to be classified as turnover taxes within the meaning of Article 33 of the Sixth Directive, inasmuch as they are not levied on commercial transactions in a manner comparable to VAT.