European Commission v Kingdom of Spain.
Date: 2013-09-26
56. It follows that, contrary to what is claimed by the Commission, a purely literal interpretation of the special scheme for travel agents based on the text of one or more language versions, to the exclusion of the others, cannot prevail. In accordance with established case-law, it must be held that the provisions of European Union law must be uniformly interpreted and applied in the light of the versions in all the languages of the European Union. Where there is divergence between the various language versions of a European Union text, the provision in question must be interpreted by reference to the general scheme and purpose of the rules of which it forms part (Case C‑280/04 Jyske Finans  [2005] ECR I‑10683, paragraph 31).
58. As regards the purpose of the special scheme, the Court has already pointed out on numerous occasions that the services provided by travel agents and tour operators in general consist of multiple services, in particular transport and accommodation, supplied both inside and outside the territory of the Member State in which the undertaking has established its business or has a fixed establishment. The application of the normal rules on place of taxation, taxable amount and deduction of input tax would, by reason of the multiplicity of services and the places in which they are provided, entail practical difficulties for those undertakings of such a nature as to obstruct their operations. It was in order to adapt the applicable rules to the specific nature of that activity that the European Union legislature set up a special VAT scheme in Article 26(2) to (4) of the Sixth Directive (see Case C‑163/91 Van Ginkel  [1992] ECR I‑5723, paragraphs 13 to 15; Madgett and Baldwin , paragraph 18; Case C‑149/01 First Choice Holidays  [2003] ECR I‑6289, paragraphs 23 to 25; Case C‑200/04 ISt  [2005] ECR I‑8691, paragraph 21; and Case C‑31/10 Minerva Kulturreisen  [2010] ECR I‑12889, paragraphs 17 and 18).
63. Moreover, it should be recalled that the Court has already had occasion to interpret the term ‘traveller’ by giving it a wider meaning than that of final consumer. Thus, in paragraph 28 of First Choice Holidays , the Court held that the words ‘to be paid by the traveller’ in Article 26(2) of the Sixth Directive cannot be interpreted literally as excluding from the taxable amount for VAT part of the ‘consideration’ obtained from a third party within the meaning of Article 11A(1)(a) of that directive.
65. The fact that the special scheme for travel agents is an exception to the normal rules, so that, as such, that exception must not be extended beyond what is necessary to achieve its objective (see First Choice Holidays , paragraph 22), does not, however, mean that the traveller-based approach must be adopted, if it compromises the effectiveness of that special scheme.
66. While acknowledging that the special scheme for travel agents is capable of improvement, the Commission, relying on paragraph 28 of Commission  v Spain , submits that it is not for the Member States to adopt on their own initiative an approach which, according to those States, improves that scheme because, by doing so, they take the place of the European Union legislature. However, that judgment cannot properly be relied upon in the present case, since, unlike the special scheme for travel agents, the legislation at issue in that judgment was unequivocal.
69. In the light of the above considerations, Articles 306 to 310 of the VAT Directive must be interpreted by following the customer-based approach.
81. Although it is for the Commission, under Article 258 TFEU, to establish the existence of a failure to fulfil obligations, the Member States are none the less required, under Article 4(3) TEU, to facilitate the achievement of the Commission’s task of ensuring that the treaties and secondary legislation are applied. It follows that where the Commission has adduced sufficient evidence of certain matters in the territory of the defendant Member State, it is for that State to challenge in substance and in detail the information thus produced (see, to that effect, Case C‑365/97 Commission  v Italy (‘San Rocco’)  [1999] ECR I‑7773, paragraphs 84 to 86).
91. In the second place, it should be recalled that Article 168 of the VAT Directive sets out the principle of the right to deduct VAT. That right concerns the input tax on the goods and services used by taxable persons for the needs of their taxed transactions (see Commission  v Spain , paragraph 21). As the Advocate-General observes in point 26 of her Opinion, in order to ensure neutrality of VAT, the amount of the tax deducted must exactly correspond to the amount of the input tax due or paid.
101. The special scheme for travel agents and, in particular, Article 308 of the VAT Directive, cited by the Kingdom of Spain, do not provide for any possibility of making an overall determination of the taxable amount of travel agents’ profit margins.
102. Article 318 of the VAT Directive permits, in the context of special schemes expressly mentioned in Chapter 4 of Title XII of that directive, that is to say, those for second-hand goods, works of art, collectors’ items and antiques, the taxable amount to be calculated on an overall basis, but that provision necessarily covers only certain sectors, not including that of travel agents.
103. Consequently, in that sector, the taxable amount must be calculated in accordance with Article 308 of the VAT Directive, by referring to each single service provided by the travel agent, not on an overall basis.
104. It follows that Article 146 of Law 37/1992 is not compatible with the special VAT scheme provided for in Articles 306 to 310 of the VAT Directive.