Finanzamt Groß-Gerau v MKG-Kraftfahrzeuge-Factoring GmbH.
Date: 2003-06-26
38.  It is to be remembered first of all that the Sixth Directive establishes a common system of VAT based,   inter alia  , on a uniform definition of taxable transactions.
39.  It follows from Article 2 of the Sixth Directive, which defines the scope of VAT, read in conjunction with Article 4, that only activities of an economic nature, carried out within the territory of the Member State by a taxable person acting as such, are subject to VAT.
42.  In accordance with the Court's settled case-law, Article 4 of the Sixth Directive thus confers a very wide scope on VAT, comprising all stages of production, distribution and the provision of services (see,   inter alia  , Case C-186/89   Van Tiem   [1990] ECR I-4363, paragraph 17).
43.  It is also apparent from the Court's case-law that, in accordance with the requirements of the principle of the neutrality of VAT, the concept of   "exploitation"   within the meaning of Article 4(2) of the Sixth Directive refers to all transactions, whatever may be their legal form, by which it is sought to obtain income from the property in question on a continuing basis (see,   inter alia  ,   Van Tiem  , paragraph 18).
44.  The Court has, however, made it clear that Article 4 of the Sixth Directive must be interpreted as meaning that a holding company whose sole purpose is to acquire holdings in other undertakings and which does not involve itself directly or indirectly in the management of those undertakings, without prejudice to its rights as a shareholder, does not have the status of taxable person and therefore has no right to deduct tax under Article 17 of the Sixth Directive (see,   inter alia  , Case C-60/90   Polysar Investments Netherlands   [1991] ECR I-3111, paragraph 17, and Case C-142/99   Floridienne and Berginvest   [2000] ECR I-9567, paragraph 17).
45.  That interpretation is based, amongst other things, on the finding that the mere acquisition and holding of shares in a company is not to be regarded as an economic activity within the meaning of the Sixth Directive, conferring on the holder the status of a taxable person. The mere acquisition of financial holdings in other undertakings does not amount to the exploitation of property for the purpose of obtaining income therefrom on a continuing basis because receipt of any dividend yielded by those holdings is merely the result of ownership of the property and is not the consideration for any economic activity (see Case C-333/91   Sofitam   [1993] ECR I-3513, paragraphs 12 and 13, Case C-306/94   Régie Dauphinoise   [1996] ECR I-3695, paragraph 17, and Case C-80/95   Harnas  & Helm   [1997] ECR I-745, paragraph 15).
46.  However, the Court has held that it is otherwise where the holding is accompanied by direct or indirect involvement in the management of the companies in which the holding has been acquired, without prejudice to the rights held by the holding company as shareholder (Polysar Investments Netherlands  , paragraph 14), in so far as involvement of that kind entails carrying out transactions which are subject to VAT by virtue of Article 2 of the Sixth Directive, such as the supply of services by the holding company to those companies (see   Floridienne and Berginvest  , paragraphs 18 and 19). The Court has likewise held that services such as placements which a manager makes with financial institutions of monies received from his clients in the course of managing their properties and on which he receives interest fall within the scope of VAT, since the placement constitutes the direct, permanent and necessary extension of the taxable activity (see   Régie Dauphinoise  , paragraphs 17, 18 and 19).
47.  It also follows from the Court's case-law that a supply of services is effected   "for consideration"   within the meaning of Article 2(1) of the Sixth Directive, and is therefore taxable, 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 (see,   inter alia  , Case C-16/93   Tolsma   [1994] ECR I-743, paragraph 14, and Case C-2/95   SDC   [1997] ECR I-3017, paragraph 45).
50.  The making of such a payment therefore does not result from the mere fact that the debts are included amongst the factor's assets, but constitutes actual consideration for an economic activity engaged in by the factor, namely the services which he has provided to the client. There is thus a direct link between the factor's activity and the amount which he receives in return by way of payment, so that it cannot be maintained that a factor who engages in true factoring does not make a supply for consideration to the client and, therefore, that he does not pursue an economic activity for the purposes of Articles 2 and 4 of the Sixth Directive, but that he should be regarded as merely a recipient of assignments by the client of debts owed to him. The factor's guaranteeing to the client of payment of the debts by assuming the risk of the debtors' default must be considered to be exploitation of the property in question for the purpose of obtaining income therefrom on a continuing basis, within the meaning of Article 4(2) of the Sixth Directive, where that operation is carried out, in return for payment, for a given period, as was the case in the main proceedings.
55.  It should be remembered that the deduction regime provided for in that article is meant to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities and that the common system of VAT consequently ensures complete neutrality of taxation of all economic activities which are subject to VAT, irrespective of their purpose or results (see to that effect,   inter alia  , Case C-16/00   Cibo Participations   [2001] ECR I-6663, paragraph 27).
56.  Next, the Court found in   Bally  , at paragraphs 9 and 16, that where, in the context of a transaction of sale, the price of the goods is met by the purchaser by means of a credit card and paid to the supplier by the organisation issuing the card, retention by the latter of a percentage calculated on the sales price agreed between the supplier and the purchaser represents the consideration for a service rendered to the supplier by the card-issuing organisation, consisting in particular in the guarantee of payment for the goods.
62.  In answering this question, it should be remembered that the exemptions provided for in Article 13 of the Sixth Directive constitute independent concepts of Community law which are intended to avoid divergences in the application of the VAT system as between one Member State and another and must be placed in the general context of the common system of VAT (see, in particular, Case C-240/99   Skandia   [2001] ECR I-1951, paragraph 23).
63.  In addition, it is settled case-law that the terms used to specify the exemptions provided for by Article 13 of the Sixth Directive are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see,   inter alia  , Case C-409/98   Mirror Group   [2001] ECR I-7175, paragraph 30).
64.  It should also be noted that the transactions exempted by virtue of Article 13B(d)(3) of the Sixth Directive are defined solely in terms of the nature of the services listed, since no reference is made to the status of the persons supplying or receiving them. Furthermore, it is clear from the Court's case-law that, given the objectives pursued by the common system of VAT of ensuring legal certainty and the correct and straightforward application of the exemptions provided for in Article 13 of the Sixth Directive, it is necessary to have regard, save in exceptional cases, to the objective character of the transaction in question (see,   inter alia  , Case C-108/99   Cantor Fitzgerald International   [2001] ECR I-7257, paragraph 33).
70.  It is therefore necessary to view the final clause of Article 13B(d)(3) in its context and to interpret it in the light of the spirit of the provision in question and, more generally, of the scheme of the Sixth Directive.
72.  By contrast, as already stated in paragraph 58 of this judgment, exceptions to a rule derogating from the general application of VAT must be interpreted broadly.
73.  Under all the language versions, debt collection is an exception to the exemptions listed in Article 13B(d)(3) of the Sixth Directive.
75.  In view of the requirement to interpret broadly those exceptions to a derogating provision ─ whose effect is to render the transactions covered by them subject to tax in accordance with the fundamental rule forming the basis of the Sixth Directive ─ first, factoring as referred to in the final clause of Article 13B(d)(3) in the English and Swedish versions of that directive must be understood as covering both true factoring and quasi-factoring.
77.  Second, in the other language versions, the term   "debt collection"   must be interpreted as encompassing all forms of factoring. In accordance with its objective character, the essential aim of factoring is the recovery and collection of debts owed to a third party. Therefore, factoring must be regarded as constituting merely a variant of the more general concept of   "debt collection"  , whatever the manner in which it is carried out.
78.  Moreover, the term   "debt collection"   refers to clearly circumscribed financial transactions, designed to obtain payment of a pecuniary debt, which are clearly different in nature from the exemptions set out in the first part of Article 13B(d)(3) of the Sixth Directive.
80.  The answer to the second question submitted for a preliminary ruling must accordingly be that an economic activity by which a business purchases debts, assuming the risk of the debtors' default, and, in return, invoices its clients in respect of commission, constitutes   "debt collection and factoring"   within the meaning of the final clause of Article 13B(d)(3) of the Sixth Directive and is therefore excluded from the exemption laid down by that provision.