European Commission v Kingdom of the Netherlands.
Date: 2011-03-03
41. In that regard, it must be held that the meaning of point 1 is not the same in the various official languages of the European Union.
44. It is settled case-law that the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision, or be made to override the other language versions in that regard. Such an approach would be incompatible with the requirement for uniform application of EU law. Where there is divergence between the various language versions, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part (see Case C‑372/88 Cricket St Thomas  [1990] ECR I‑1345, paragraphs 18 and 19; Case C‑149/97 Institute of the Motor Industry  [1998] ECR I‑7053, paragraph 16; and Case C‑451/08 Helmut Müller [2010] ECR I‑0000, paragraph 38).
52. With regard to the purpose of point 1 of Annex III, it should be noted that, in response to a written question asked by the Court, the Commission stated, without being contradicted on that point by the other parties, that the EU legislature, by drawing up Annex H to the Sixth Directive, intended that essential commodities and goods and services having social or cultural objectives may be subject to a reduced rate of VAT, provided that those goods or services pose no or little risk of distortion to competition.
53. Referred to at the top of Annex III, even before the ‘supply of water’ or ‘pharmaceutical products’, foodstuffs belong to the category of essential commodities. By allowing foodstuffs to be taxed at a reduced rate of VAT, rather than the normal rate, the EU legislature intended to make them less expensive, and therefore more accessible, for the final consumer, who finally bears the VAT (see, inter alia, Case C‑475/03 Banca popolare di Cremona  [2006] ECR I‑9373, paragraph 22, and Joined Cases C‑283/06 and C‑312/06 KÖGÁZ and Others  [2007] ECR I‑8463, paragraph 30). In order fully to attain that objective, that legislature logically extended the application of that reduced rate of VAT to items which, not themselves being foodstuffs, are normally intended for use in the preparation of those foodstuffs.
56. By contrast, it is well known that, in the European Union, the equine species is in a different situation from the species referred to in the previous paragraph. As the Advocate General noted in point 65 of his Opinion, horses are not, usually and in general, intended for use in the preparation of foodstuffs, even if some of them will be used for human and animal consumption.
57. With regard to the particular situation of horses which, while not normally being intended for use in the preparation of foodstuffs, may nevertheless in some cases be supplied for consumption, it must be considered that, in the light of the EU legislature’s objective of making essential commodities cheaper for the final consumer, point 1 of Annex III must be interpreted as meaning that only the supply of a horse for slaughter in order to be used in the preparation of foodstuffs may be subject to a reduced rate of VAT.
58. It must be added that, according to settled case-law, provisions which constitute a derogation from a principle must be interpreted strictly (see, inter alia, Case C‑399/93 Oude Luttikhuis and Others  [1995] ECR I‑4515, paragraph 23, and Case C‑492/08 Commission  v France  [2010] ECR I‑0000, paragraph 35). To permit a reduced rate of VAT to be applied to every supply of a horse would be to interpret point 1 of Annex III broadly.
59. Point 1 of Annex III does not therefore allow a Member State to apply a reduced rate of VAT to all supplies of live horses, whatever their intended use.
65. Second, with regard to the argument according to which all supplies of horses must be subject to a reduced rate of VAT pursuant to point 11 of Annex III, it must be noted that, in the Member States, horses are not used, usually and in general, in agricultural production. Reasoning analogous to that followed with regard to point 1 of that annex must therefore be applied, that is that only supplies of horses intended for use in agricultural production may be subject to a reduced rate of VAT. Point 11 of Annex III does not allow a reduced rate of VAT to be applied to all supplies of horses, any more than point 1 of that annex does.
66. Third, with regard to the argument concerning the principle of neutrality of VAT, which is said to preclude the applicable VAT rate from being determined by reference to the use of the horses, it must be borne in mind that, according to settled case-law, the principle of fiscal neutrality inherent in the common system of VAT precludes treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes, so that those goods or supplies must be subjected to a uniform rate (see, inter alia, Case C‑267/99 Adam  [2001] ECR I‑7467, paragraph 36, and Case C‑94/09 Commission  v France  [2010] ECR I‑0000, paragraph 40). However, taking their respective uses into account, a horse destined for slaughter is not similar to a racehorse or a pet horse where that animal is sold as such. Therefore, as pointed out by the Advocate General in point 78 of his Opinion, those categories of horses are not in competition, meaning that they can be subject to different rates of VAT.