BGŻ Leasing sp. z o.o. v Dyrektor Izby Skarbowej w Warszawie.
Date: 2013-01-17
29. It must be recalled that, for VAT purposes every supply must normally be regarded as distinct and independent, as follows from the second subparagraph of Article 1(2) of the VAT Directive (Case C-392/11 Field Fisher Waterhouse  [2012] ECR, paragraph 14 and the case-law cited).
30. Nevertheless, it is clear from the case-l aw of the Court that, in certain circumstances, several formally distinct services, which could be supplied separately and thus give rise in turn to taxation or exemption, must be considered to be a single transaction when they are not independent (see Case C-425/06 Part Service [2008] ECR I-897, paragraph 51, Case C-276/09 Everything Everywhere  [2010] ECR I-12359, paragraph 23). There is a single supply where two or more elements or acts supplied by the taxable person to the customer are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split (Case C-41/04 Levob Verzekeringen and OV Bank  [2005] ECR I-9433 paragraph 22, and Case C-111/05 Aktiebolaget NN  [2007] ECR I-2697, paragraph 23). Such is the case where one or more elements are to be regarded as constituting the principal service, whilst one or more elements are to be regarded, by contrast, as ancillary services which share the tax treatment of the principal service (Case C-349/96 CPP  [1999] ECR I-973, paragraph 30, and Part Service , paragraph 52).
31. Thus, the Court has held not only that every supply of a service must normally be regarded as distinct and independent, but that a supply which comprises a single service from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system (see, to that effect, CPP , paragraph 29, and Case C-242/08 Swiss Re Germany Holding  [2009] ECR I-10099, paragraph 51).
32. In order to determine whether the services supplied constitute independent services or a single service, it is necessary to examine the characteristic elements of the transaction concerned (see, to that effect, CPP , paragraph 29, Levob Verzekeringen and OV Bank , paragraph 20, and Field Fisher Waterhouse , paragraph 18). However, it must be recalled that there is no absolute rule for determining the extent of a service for VAT purposes, and there, in order to determine the extent of a supply of a service and, therefore, in order to determine the extent, all the circumstances in which the transaction concerned takes place must be taken into account (see, to that effect, CPP , paragraphs 27 and 28).
33. In the context of the cooperation established by Article 267 TFEU, it is for the national courts to determine whether that is the situation in a particular case and to make all definitive findings of fact in that regard (see, to that effect, CPP , paragraph 32, Part Service , paragraph 54; Joined Cases C-497/09, C-499/09, C-501/09 and C-502/09 Bog and Others  [2011] ECR I-1457, paragraph 55; and the order of 19 January 2012 in Case C-117/11 Purple Parking and Airparks Services , paragraph 32). However, it is for the Court to provide the national courts with all the guidance as to the interpretation of European Union law which may be of assistance in adjudicating on the case pending before them ( Levob Verzekeringen and OV Bank , paragraph 23).
36. It must be stated, in that regard, that any insurance transaction has, by nature, a link with the item it covers. It follows that there is necessarily a connection between the leased item and the relevant insurance. Nonetheless, such a connection is not sufficient in itself to determine whether or not there is a single complex transaction for VAT purposes. If any insurance transaction were subject to VAT because the services relating to the item it covers were subject to VAT, the very aim of Article 135(1)(a) of the VAT Directive, that is the exemption of insurance transactions would be called into question.
37. Next, it must be recalled that, according to the case-law of the Court, since leasing services do not provide for a transfer to the lessee of ownership in the leased item, they must be categorised, in principle, as a supply of services (see, to that effect, Case C-118/11 Eon Aset Menidjmunt [2012] ECR, paragraph 33). It is also clear from that case-law that such services may nevertheless be treated as the acquisition of capital goods in certain circumstances. Such is the case in particular where the lessee possesses all the essential powers attaching to ownership of the item which is the subject of the leasing agreement, in particular, if substantially all the rewards and risks incidental to legal ownership of that vehicle are transferred to the lessee and that the present value of the amount of the lease payments is practically identical to the market value of the property (see, Eon Aset Menidjmunt , paragraph 40). It is for the referring court to determine, in the light of the circumstances of the case, whether those criteria are fulfilled.
38. As supplies of services, such leasing transactions are, as a general rule, subject to VAT under Article 2(1)(c) of the VAT Directive, and for which the taxable amount is determined in accordance with Article 73 thereof (see, to that effect, Part Service , paragraph 61). However, as regards the supply of services, they must normally be exempt from VAT under Article 135(1)(a) of the VAT Directive.
40. That being the case, it is appropriate to examine whether there are reasons arising from the facts at issue in the main proceedings which would suggest that the elements concerned constitute a single transaction.
41. From that perspective, it must be recalled first of all that, according to the case-law of the Court on the definition of a single transaction, as set out in paragraph 30 of this judgment, a service is regarded as ancillary to a principal service in particular where it does not constitute for the customers an aim in itself, but a means of better enjoying the principal service supplied ( CPP , paragraph 30, and Part Service , paragraph 52).
43. The fact that insurance covering the leased item is required by the lessor, as appears to be the case in the transaction at issue in the main proceedings, does not invalidate that finding. In particular, it must be observed that, in the circumstances at issue in the main proceedings, if the lessee is required to ensure that the leased item is insured, he has the option of insuring that with the insurance company of his choice. Thus, the requirement for insurance cover cannot, in itself, mean that a supply of insurance by the lessor, such as that at issue in the main proceedings, is indivisible or ancillary to the supply of the leasing services.
44. Furthermore, it must be recalled that the way of invoicing and pricing may be an indication as to whether supply is a single supply (see, to that effect, CPP , paragraph 31). Thus, separate invoicing and pricing of the services supports the view that the services are independent, without being decisive (see, to that effect, order in Purple Parking and Airparks Services , paragraph 34 and the case-law cited).
45. In that connection, it appears that the methods used in the case in the main proceedings, namely separate pricing and invoicing reflect the interests of the contracting parties. The lessee wishes above all to obtain leasing services and the insurance he is required to take by the lessor is of only secondary importance to him. If the lessee also decides to obtain insurance services through the lessor, such a decision is made independently of his decision to conclude a leasing agreement.
47. If such a fee, the non-payment of which allows the lessor to terminate the leasing agreement, also covers the insurance premiums for the leased item, it must be observed that, although a contractual stipulation of that kind may constitute an indication of a single service in other circumstances, that is not relevant in the case where the separate transactions cannot be regarded objectively a constituting a single service (see, to that effect, Field Fisher Waterhouse , paragraphs 23 and 25). Therefore, despite the existence of a contractual stipulation, leasing and insurance services such as those at issue in the main proceedings may constitute separate services.
56. It must be recalled that the terms used to specify the exemptions covered by Article 13 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 (Case C-44/11 Deutsche Bank  [2012] ECR, paragraph 42 and the case-law cited). Furthermore, according to settled case-law, the exemptions provided for in that article constitute independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see, to that effect, CPP , paragraph 15, and Case C-240/99 Skandia [2001] ECR I-1951, paragraph 23).
58. However, it is clear from the case-law of the Court that the essentials of an insurance transaction are, as generally understood, that the insurer undertakes, in return for prior payment of a premium, to provide the insured, in the event of materialisation of the risk covered, with the service agreed when the contract was concluded (see, in particular, Case C-8/01 Taksatorringen  [2003] ECR I-13711, paragraph 39, and the case-law cited). Furthermore, an insurance transaction necessarily implies the existence of a contractual relationship between the provider of the insurance service and the person whose risks are covered by the insurance, that is to say, the insured party ( Skandia , paragraph 41, and Taksatorringen , paragraph 41).
59. The Court states that the expression ‘insurance transactions’ is broad enough in principle to include the provision of insurance cover by a taxable person who is not himself an insurer but, in the context of a block policy, procures such cover for his customers by making use of the supplies of an insurer who assumes the risk insured (see, to that effect, CPP , paragraph 22).
63. In so far as concerns the relevance for the circumstances at issue to the principal, in Article 28 of the VAT Directive, according to which’[w]here a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself’, it must be observed, first, that although B.G.Ż. Leasing concluded the insurance contract at issue in the main proceedings in its own name and on its own behalf it is for the referring court to ascertain, the transaction concerned does not fall within the scope of Article 28 (see, by analogy Case C-520/10 Lebara [2012] ECR, paragraph 43). Second, if the insurance contract had been concluded on behalf of someone else, the case-law of the Court on Article 28 of the VAT Directive is such as to support the exemption of the transaction at issue in the main proceedings.
64. According to that case-law, since Article 28 is in Title IV of the VAT Directive, entitled ‘Taxable Transactions’, and which is worded in general terms is couched in general terms, without containing restrictions as to its scope or its extent, it also concerns the application of VAT exemptions under the Sixth Directive (see, to that effect, Case C-464/10 Henfling and Others  [2011] ECR I-6219, paragraph 36).
65. In any event, according to settled case-law, the principle of fiscal neutrality precludes treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes (Joined Cases C-259/10 and C-260/10 The Rank Group  [2011] ECR I-10947, paragraph 32 and the case-law cited).
67. Moreover, that interpretation is supported by the very purpose of the VAT Directive, which exempts insurance transactions but gives Member States, in Article 401 thereof, the possibility of maintaining or introducing a tax on insurance contracts. Consequently, if ‘insurance transactions’ refers solely to transactions performed by insurers themselves, the final consumer, such as a lessee in a leasing agreement, in circumstances such as those at issue in the main proceedings, might have to pay not only that tax but also VAT. Such a result would be contrary to the purpose of the exemption provided for by Article 135(1)(a) of the VAT Directive (see, to that effect, CPP , paragraph 23).