Landboden-Agrardienste GmbH & Co. KG v Finanzamt Calau.
Date: 1997-12-18
12 In Case C-215/94 Mohr v Finanzamt Bad Segeberg [1996] ECR I-959, the Court ruled on the question whether an undertaking to discontinue milk production given by a farmer under a Community regulation fixing compensation for the definitive discontinuation of such production constitutes a supply of services for the purposes of the Sixth Directive.
13 The Court answered that question in the negative, noting that VAT was a general tax on the consumption of goods and services and that, in a case such as the one before it, there was no consumption as envisaged in the Community VAT system. It held that, by compensating farmers who undertook to cease their milk production, the Community did not acquire goods or services for its own use but acted in the common interest of promoting the proper functioning of the Community milk market.  In those circumstances, the undertaking given by a farmer that he would discontinue his milk production did not entail either for the Community or for the competent national authorities any benefit which would enable them to be considered consumers of a service and therefore did not constitute a supply of services within the meaning of Article 6(1) of the Sixth Directive (paragraphs 19 to 22).
14 The German Government and the Commission rightly agree that the main proceedings in Mohr and in this case must both have the same outcome as regards the interpretation of the Sixth Directive.  It is irrelevant that in Mohr the compensation originated from the Community while in this case it originates from the Member State.  In both situations it is necessary to decide whether an undertaking given by a farmer to reduce production in return for compensation under an intervention scheme constitutes a supply of services for the purposes of the Sixth Directive, with the result that the compensation must be subject to VAT.
15 However, while the Commission takes the view, as it did in Mohr, that there is no supply of services for the purposes of the Sixth Directive in such situations, the German Government and the Finanzamt challenge the interpretation given in the judgment in Mohr.
16 They acknowledge that the compensation at issue in the main proceedings cannot be regarded as consideration for a supply of goods falling within Article 11(A)(1)(a) of the Sixth Directive but consider that it is caught by that directive as consideration for the supply of a service.  In their view, a farmer's act of limiting production or refraining from marketing certain products is a service in its own right, separate from the supply of products to consumers and entailing separate consideration.  By requiring, in Mohr, that the public authority must acquire goods or services for its own use, the Court added a condition not laid down in the Sixth Directive.
19 As the Advocate General has pointed out in paragraphs 21 to 29 of his Opinion, the arguments put forward by the German Government and the Finanzamt do not undermine the reasoning adopted by the Court in Mohr.
20 Contrary to their submissions, that reasoning does not mean that a payment made by a public authority in the common interest cannot constitute consideration for a supply of services for the purposes of the Sixth Directive, or that the concept of a supply of services depends on the use made of a service by the person who pays for it.  Only the nature of the undertaking given is to be taken into consideration: for such an undertaking to be covered by the common system of VAT it must imply consumption.