ARO Lease BV v Inspecteur van de Belastingdienst Grote Ondernemingen te Amsterdam.
Date: 1997-07-17
11 The preliminary point must be made that the leasing of vehicles constitutes a supply of services within the meaning of Article 9 of the Sixth Directive.
12 In order to answer the question raised, it must first be noted that, as stated in the fourth recital in the preamble to Tenth Council Directive 84/386/EEC of 31 July 1984 on the harmonization of the laws of the Member States relating to turnover taxes, amending Directive 77/388/EEC - Application of value added tax to the hiring out of movable tangible property (OJ 1984 L 208, p. 58, `the Tenth Directive'), `as regards the hiring out of forms of transport, Article 9(1) should, for reasons of control, be strictly applied, the place where the supplier has established his business being treated as the place of supply of such services'.
14 The Court has, moreover, noted in that regard that, since forms of transport may easily cross frontiers, it is difficult, if not impossible, to determine the place of their utilization and that in each case a practical criterion must therefore be laid down for charging VAT. Consequently, for the hiring out of all forms of transport, the Sixth Directive provided that the service should be deemed to be supplied not at the place where the goods hired out are used but, with a view to simplification and in conformity with the general rule, at the place where the supplier has established his business (Case 51/88 Hamann v Finanzamt Hamburg-Eimsbüttel [1989] ECR 767, paragraphs 17 and 18).
15 Furthermore, as regards the general rule in Article 9(1) of the Sixth Directive, the Court has held that the place where the supplier has established his business is a primary point of reference inasmuch as there is no purpose in referring to another establishment from which the services are supplied unless reference to the main place of business does not lead to a rational result for tax purposes or creates a conflict with another Member State. It is clear from the aim of Article 9 and from the context in which the concepts are employed that services cannot be deemed to be supplied at an establishment other than the main place of business unless that establishment has a minimum degree of stability derived from the permanent presence of both the human and technical resources necessary for the provision of the services (Case 168/84 Berkholz v Finanzamt Hamburg-Mitte-Altstadt [1985] ECR 2251, paragraphs 17 and 18).
16 Consequently, in order to be treated, by way of derogation from the primary criterion of the main place of business, as the place where a taxable person provides services, an establishment must possess a sufficient degree of permanence and a structure adequate, in terms of human and technical resources, to supply the services in question on an independent basis.
18 The services supplied in the leasing of vehicles, it must be noted, consist principally in negotiating, drawing up, signing and administering the relevant agreements and in making the vehicles concerned, which remain the property of the leasing company, physically available to customers.
19 Consequently, when a leasing company does not possess in a Member State either its own staff or a structure which has a sufficient degree of permanence to provide a framework in which agreements may be drawn up or management decisions taken and thus to enable the services in question to be supplied on an independent basis, it cannot be regarded as having a fixed establishment in that State.
20 It is, moreover, clear from both the wording and the aim of Article 9(1) and 9(2)(e) of the Sixth Directive and from the judgment in Hamann, cited above, that neither the physical placing of vehicles at customers' disposal under leasing agreements nor the place at which they are used can be regarded as a clear, simple and practical criterion, in accordance with the spirit of the Sixth Directive, on which to base the existence of a fixed establishment.
27 On the basis of those considerations, the answer to the question raised must be that, on a proper construction of Article 9(1) of the Sixth Directive, a leasing company established in one Member State does not supply services from a fixed establishment in another Member State if it makes passenger cars available in the second State under leasing agreements to customers established there, if its customers have entered into contact with it through self-employed intermediaries established in the second State, if they have chosen their cars from dealers established in the second State, if the leasing company has acquired the cars in the second State, in which they are registered, and has made them available to its customers under leasing agreements drawn up and signed at its main place of business, and if the customers bear maintenance costs and pay road tax in the second State, but the leasing company does not have an office or any premises on which to store the cars there.