Finanzamt Steglitz v Ines Zimmermann.
Date: 2012-11-15
21. The exemption provided for in Article 13A(1)(g) of the Sixth Directive applies to goods and services which are ‘closely linked to welfare and social security work’ and supplied ‘by bodies governed by public law or by other organisations recognised as charitable by the Member State concerned’.
22. As is clear from settled case‑law, the terms used to specify the exemptions in Article 13 of the Sixth Directive are to be interpreted strictly. Nevertheless, the interpretation of those terms must be consistent with the objectives underlying the exemptions and must comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT. Accordingly, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 13 must be construed in such a way as to deprive the exemptions of their intended effects (see inter alia, to that effect, Case C‑445/05 Haderer  [2007] ECR I‑4841, paragraph 18 and the case‑law cited; Case C‑461/08 Don Bosco Onroerend Goed  [2009] ECR I‑11079, paragraph 25 and the case‑law cited; and Case C‑262/08 CopyGene  ECR [2010] ECR I‑5053, paragraph 26).
26. Article 13A(1)(g) of the Sixth Directive does not specify the conditions and procedures for recognising such organisations (see Case C‑498/03 Kingscrest Associates and Montecello  [2005] ECR I‑4427, paragraph 49). In consequence, it is in principle for the national law of each Member State to lay down the rules in accordance with which that recognition may be granted to such organisations. Member States have a discretion in that respect (see inter alia, to that effect, Kügler , paragraph 54; Kingscrest Associates and Montecello , paragraphs 49 and 51; and Case C‑415/04 Stichting Kinderopvang Enschede [2006] ECR I‑1385, paragraph 23).
27. In that context, under Article 13A(2)(a) of the Sixth Directive, Member States may make the grant of the exemption provided for in Article 13A(1)(g) to bodies other than those governed by public law subject to one or more of the conditions listed therein. Those optional conditions may be imposed freely and additionally by Member States for the grant of that exemption (see, to that effect, Kingscrest Associates and Montecello , paragraphs 38 and 50; L.u.P. , paragraph 43; and Case C‑434/05 Horizon College [2007] ECR I‑4793, paragraph 45).
28. It follows that, in the main proceedings, the point at issue is essentially whether, in laying down the framework for the recognition referred to in Article 13A(1)(g) of the Sixth Directive, the Federal Republic of Germany has observed the limits of its discretion (see also, by analogy, Kügler , paragraph 55).
30. Admittedly, the adoption of national rules concerning the conditions and procedures for recognition of the ‘charitable’ nature of organisations other than bodies governed by public law is allowed under Article 13A of the Sixth Directive (see, to that effect, Kingscrest Associates and Montecello , paragraph 50).
31. It is clear, however, from the case‑law of the Court that, in order to determine the organisations which should be recognised as ‘charitable’ for the purposes of Article 13A(1)(g) of the Sixth Directive, it is for the national authorities, in accordance with EU law and subject to review by the national courts, to take into account, in particular, the existence of specific provisions, be they national or regional, legislative or administrative, or tax or social security provisions; the public interest nature of the activities of the taxable person concerned; the fact that other taxable persons carrying on the same activities already enjoy similar recognition; and the fact that the costs of the supplies in question may be largely met by health insurance schemes or other social security bodies (see, to that effect, Kügler , paragraphs 57 and 58; Kingscrest Associates and Montecello , paragraph 53; and, by analogy, Case C‑45/01 Dornier  [2003] ECR I‑12911, paragraphs 72 and 73; L.u.P. , paragraph 53; and CopyGene , paragraphs 65 and 71).
32. Furthermore, the exemption provided for in Article 13(A)(1)(g) of the Sixth Directive may be relied upon by a taxable person before a national court in order to oppose national rules incompatible with that provision. In such cases, it is for the national court to establish, in the light of all relevant factors, whether the taxable person is an organisation recognised as ‘charitable’ for the purposes of that provision (see Kügler , paragraph 61).
33. Accordingly, where a taxable person challenges the recognition, or the absence of recognition, of an organisation as ‘charitable’ for the purposes of Article 13A(1)(g) of the Sixth Directive, it is for the national courts to examine whether the competent authorities have observed the limits of the discretion granted by that provision whilst applying the principles of EU law, including, in particular, the principle of equal treatment, which, in the field of VAT, takes the form of the principle of fiscal neutrality (see inter alia, to that effect, Kügler , paragraph 56; Kingscrest Associates and Montecello , paragraphs 52 and 54; and L.u.P. , paragraph 48).
36. In those circumstances, in relation to the exemption provided for under Article 13A(1)(b) of the Sixth Directive, the Court has held in substance that, by merely requiring, for the purposes of recognition as laboratories governed by private law for the application of that provision, that at least 40% of the medical tests carried out by the laboratories concerned must be intended for persons insured with a social security authority, the Member State in question did not go beyond the limits of its discretion under that provision (see L.u.P. , paragraphs 53 and 54).
39. In that regard, whilst it is true that, according to the introductory words of Article 13A(1) of the Sixth Directive, Member States must lay down the conditions for exemptions in such a way as to ensure the correct and straightforward application of those exemptions and to prevent any possible evasion, avoidance or abuse, those conditions cannot affect the substantive definition of the exemptions (see, inter alia, Case 8/81 Becker  [1982] ECR 53, paragraph 32; Kingscrest Associates and Montecello , paragraph 24, and Case C‑401/05 VDP Dental Laboratory [2006] ECR I‑12121, paragraph 26).
43. It is apparent from the case‑law set out in paragraphs 22 and 33 above that, for applying the exemption provided for in Article 13A(1)(g) of the Sixth Directive, compliance with the principle of fiscal neutrality requires, in principle, that all the organisations other than those governed by public law be placed on an equal footing for the purposes of their recognition for the supply of similar services (see also, by analogy with Article 13A(1)(b) of the Sixth Directive, L.u.P. , paragraph 50, and CopyGene , paragraph 71).
47. On the one hand, recalling that the deduction mechanism provided for under the Sixth Directive is intended to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities, the Court has held that the common system of VAT seeks to ensure neutrality of taxation of all economic activities, provided that those activities are themselves subject in principle to VAT (see inter alia, to that effect, Case C‑174/08 NCC Construction Danmark  [2009] ECR I‑10567, paragraph 27, and Case C‑277/09 RBS Deutschland Holdings [2010] ECR I‑13805, paragraph 38).
48. On the other hand, according to settled case‑law, the principle of fiscal neutrality means that supplies of goods or services which are similar, and which are accordingly in competition with each other, may not be treated differently for VAT purposes (see, inter alia, Joined Cases C‑453/02 and C‑462/02 Linneweber and Akritidis [2005] ECR I-1131, paragraph 24, and Joined Cases C‑259/10 and C‑260/10 Rank Group [2011] ECR I‑10947, paragraph 32 and the case‑law cited).
49. It is in that latter sense that the concept of neutrality is relevant in the present case. As is clear from the case‑law set out in paragraph 22 above, in the interpretation of the exemptions provided for under Article 13 of the Sixth Directive, the principle of fiscal neutrality must be applied alongside the principle that those exemptions must be interpreted strictly (see also, to that effect, Case C‑44/11 Deutsche Bank [2012] ECR, paragraph 45).
50. From that viewpoint, it should be borne in mind that the principle of fiscal neutrality – a particular expression of the principle of equal treatment at the level of secondary EU law and in the specific area of taxation (see, to that effect, NCC Construction Danmark , paragraph 44) – is not a rule of primary law against which it is possible to test the validity of an exemption provided for under Article 13 of the Sixth Directive. Nor does that principle make it possible for the scope of such an exemption to be extended in the absence of an unequivocal provision to that effect (see, to that effect, VDP Dental Laboratory , paragraphs 35 to 37, and Deutsche Bank , paragraph 45).
51. Indeed, the activities in the public interest which must be exempted from VAT, the activities which may be exempted by the Member States and those which may not, as well as the conditions to which activities eligible for exemption may be made subject by the Member States, are defined by the content of Article 13A of the Sixth Directive (see Case C‑144/00 Hoffmann  [2003] ECR I‑2921, paragraph 38, and Case C‑253/07 Canterbury Hockey Club and Canterbury Ladies Hockey Club  [2008] ECR I‑7821, paragraph 38).
57. Moreover, applying the rules of interpretation set out in paragraph 22 above (see, inter alia, Case C‑473/08 Eulitz  [2010] ECR I‑907, paragraph 42 and the case‑law cited), the Court has held, in relation to the concept of ‘organisations recognised as charitable by the Member State concerned’ as referred to in Article 13A(1)(g) of the Sixth Directive, that that concept is in principle sufficiently broad to encompass natural persons and private profit-making entities (see Case C‑216/97 Gregg  [1999] ECR I‑4947, paragraph 17; Hoffmann , paragraph 24; Kingscrest Associates and Montecello , paragraphs 35 and 47; and Case C‑492/08 Commission v France  [2010] ECR I‑5471, paragraphs 36 and 37).
61. Accordingly, whatever interpretation is given to the phrase ‘closely linked’ in Article 13A(1)(g) of the Sixth Directive, it should be borne in mind that the first indent of Article 13A(2)(b) of that directive makes exemption conditional, in any event, on the supply of goods or services concerned being essential to the transactions exempted (see Stichting Kinderopvang Enschede , paragraph 25). It is for the referring court to determine whether, for the purposes of that indent, all the services supplied by Ms Zimmermann are essential to the transactions exempted (see, by analogy, Horizon College , paragraphs 38 to 41).