European Commission v Grand Duchy of Luxembourg.
Date: 2017-05-04
37


It should be recalled, in the first place, that, according to the settled case-law of the Court, the subject matter of proceedings under Article 258 TFEU is delimited by the pre-litigation procedure provided for in that provision. Accordingly, the application must be based on the same grounds and pleas as the reasoned opinion. However, that requirement cannot go so far as to mean that in every case the formal statement of complaints in the operative part of the reasoned opinion and the form of order sought in the application must be exactly the same, provided that the subject matter of the proceedings, as defined in the reasoned opinion, has not been extended or altered (judgment of 9 April 2013, Commission v Ireland, C‑85/11, EU:C:2013:217, paragraph 17 and the case-law cited).
39


In the second place, it should be recalled that, according to the settled case-law of the Court, it is for the Commission to choose the point in time which it considers to be appropriate for bringing an action for failure to fulfil obligations. The considerations which determine that choice cannot affect the admissibility of the action. The rules laid down in Article 258 TFEU must be applied without any obligation on the Commission to act within a specific period, subject to situations in which the excessive duration of the pre-litigation procedure is liable to make it more difficult for the Member State concerned to refute the Commission’s arguments and thus to infringe the rights of the defence. It is for the Member State concerned to adduce evidence that it has been affected by such an excessive duration (see, to that effect, judgment of 16 April 2015, Commission v Germany, C‑591/13, EU:C:2015:230, paragraph 14).
47


As a preliminary point, it should be recalled that, according to the settled case-law of the Court, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot take account of any subsequent changes (judgment of 28 January 2016, Commission v Portugal, C‑398/14, EU:C:2016:61, paragraph 49).
50


In this connection, it is clear from the settled case-law of the Court that the terms used to specify the exemptions from VAT set out in Article 132 of Directive 2006/112 must be interpreted strictly since those exemptions constitute exceptions to the general principle that all services supplied for consideration by a taxable person are subject to that tax. Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and 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 132 should be construed in such a way as to deprive the exemptions of their intended effects. It is not the purpose of the case-law of the Court to impose an interpretation which would make the exemptions concerned almost inapplicable in practice (see, to that effect, judgment of 11 December 2008, Stichting Centraal Begeleidingsorgaan voor de Intercollegiale Toetsing, C‑407/07, EU:C:2008:713, paragraph 30 and the case-law cited).
61


As a preliminary point, it should be noted that it follows from the exemption provided for in Article 132(1)(f) of Directive 2006/112 that the IGP is a taxable person in its own right, separate from its members. It is clear from the very wording of that provision that the IGP is independent, and that it therefore carries out its supplies of services independently, within the meaning of Article 9 of Directive 2006/112. Furthermore, if the services supplied by the IGP were not services supplied by a taxable person acting as such, those services would not be subject to VAT, under Article 2(1)(c) of Directive 2006/112. Those services would therefore not be capable of forming the subject matter of an exemption, such as that set out in Article 132(1)(f) of that directive, as the Advocate General has observed in point 50 of her Opinion.
65


Second, the line of argument of the Grand Duchy of Luxembourg alleging a breach of the principle of fiscal neutrality must be rejected. In accordance with that principle, the deduction system is meant to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities (judgment of 15 September 2016, Landkreis Potsdam-Mittelmark, C‑400/15, EU:C:2016:687, paragraph 35). The common system of VAT therefore ensures that all economic activities, provided that they are, in principle, themselves subject to VAT, are taxed in a neutral way (see, to that effect, judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 27).
73


It should be recalled that an administrative practice of a Member State can be made the object of an action for failure to fulfil obligations when it is, to some degree, of a consistent and general nature (judgment of 22 September 2016, Commission v Czech Republic, C‑525/14, EU:C:2016:714, paragraph 14). The Grand Duchy of Luxembourg has, however, not disputed the Commission’s argument that the COBMA note sets out the general practice of the Luxembourg tax authorities.
85


Article 28 of Directive 2006/112 provides that where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he is to be deemed to have received and supplied those services himself.
86


Accordingly, that provision creates the legal fiction of two identical supplies of services provided consecutively. Under that fiction, the operator, who takes part in the supply of services and who constitutes the commission agent, is considered to have, firstly, received the services in question from the operator on behalf of whom it acts, who constitutes the principal, before providing, secondly, those services to the client himself (judgment of 14 July 2011, Henfling and Others, C‑464/10, EU:C:2011:489, paragraph 35).
87


Since Article 28 of Directive 2006/112 comes under Title IV of that directive, entitled ‘Taxable transactions’, the two supplies of services concerned fall within the scope of VAT. It follows that, if the supply of services in which an operator takes part is subject to VAT, the legal relationship between that operator and the operator on behalf of whom it acts is also subject to VAT (see, by analogy, judgment of 14 July 2011, Henfling and Others, C‑464/10, EU:C:2011:489, paragraph 36).
88


The same reasoning applies as regards the acquisition of goods pursuant to a contract under which commission is payable on purchase, under Article 14(2)(c) of Directive 2006/112, which also comes under Title IV of that directive. That provision thus creates the legal fiction of two identical supplies of goods made consecutively, which fall within the scope of VAT.