RCI Europe v Commissioners for Her Majesty’s Revenue and Customs.
Date: 2009-09-03
20. Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for tax purposes. Article 9(1) sets out a general rule in that regard, while Article 9(2) lists a number of specific connecting rules. The object of those provisions is to avoid, first, conflicts of jurisdiction, which may result in double taxation, and, secondly, non-taxation (Case 168/84 Berkholz [1985] ECR 2251, paragraph 14; Case C-327/94 Dudda  [1996] ECR I-4595, paragraph 20; and Case C-291/07 Kollektivavtalsstiftelsen TRR Trygghetsrådet  [2008] ECR I-0000, paragraph 24).
24. In that regard, the Court has already held that a supply of services is effected ‘for consideration’, within the meaning of Article 2(1) of the Sixth Directive, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient (Case C-16/93 Tolsma  [1994] ECR I-743, paragraph 14; Case C-172/96 First National Bank of Chicago  [1998] ECR I-4387, paragraphs 26 to 29; and Case C-174/00 Kennemer Golf  [2002] ECR I-3293, paragraph 39).
29. Furthermore, it is in that context that the synallagmatic nature of the contract concluded between RCI Europe and each of its members must be taken into consideration. Even if the various stages of the RCI Weeks system are taken into account, the fact remains that, if there was no intention to exchange timeshare usage rights through the market created by RCI Europe, the enrolment and annual subscription fees would lack any point.
30. In that connection, it is clear from the case-law of the Court that the basis of assessment for a supply of services is everything which makes up the consideration for the service and that a supply of services is therefore taxable only if there is a direct link between the service supplied and the consideration received (Case 102/86 Apple and Pear Development Council  [1988] ECR 1443, paragraph 11 and 12, and Tolsma , paragraph 13).
31. In the case in the main proceedings, the service provided by RCI Europe is certainly not immediate. However, it undertakes to supply in the future the service required at the request of one of its members.
33. In a similar situation, the Court had occasion to state that the fact that an annual subscription fee is a fixed sum which cannot be related to each case of use does not alter the fact that there is reciprocal performance between the members and the supplier of services (see, to that effect, Kennemer Golf , paragraph 40). The annual subscription fees of members of an association can constitute consideration for the services provided by the association, even though members who do not use or do not regularly use the association’s services must still pay their annual subscription fees (see, to that effect, Kennemer Golf , paragraph 42).
36. In that connection, it must be recalled that the Court has defined the conditions for the application of that provision to the effect that there must be a ‘sufficiently direct connection’ between the supply of services and the immovable property concerned, on the ground that it would be contrary to the general scheme of that provision to place within the scope of that special rule every supply of services provided that it has a connection, even a very tenuous one, with immovable property, since a large number of services are connected in one way or another with immovable property (Case C-166/07 Heger  [2006] ECR I-7749, paragraph 23).
39. It should also be borne in mind that the underlying logic of the provisions concerning the place where a service is supplied in Article 9 of the Sixth Directive requires that goods and services are taxed as far as possible in the place of consumption.