C&D Foods Acquisition ApS v Skatteministeriet.
Date: 2018-11-08
29


It follows from Article 2(1) of Directive 2006/112, which defines the scope of VAT, that, within the territory of a Member State, activities of an economic nature alone are subject to that tax. Pursuant to Article 9 of that directive, a taxable person is understood to mean any person who independently carries out in any place any economic activity, whatever the purpose or result of that activity. Furthermore, it is clear from Article 9 that the concept of economic activity encompasses any activity of producers, traders or persons supplying services and, more particularly, the exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis (see, to that effect, judgment of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 27).
30


It follows from the Court’s case-law that a company which has as its sole purpose the acquisition of holdings in other companies, without it becoming directly or indirectly involved in the management of those companies, is neither a taxable person, within the meaning of Article 9 of Directive 2006/112, nor a person entitled to deduct VAT, within the meaning of Article 168 of that directive. The mere acquisition and ownership of shares do not, in themselves, constitute an economic activity for the purposes of Directive 2006/112, conferring on the holder the status of a taxable person, since those transactions do not amount to the exploitation of property for the purpose of obtaining income therefrom on a continuing basis, as the sole return on those transactions is a possible profit on the sale of those shares (see, to that effect, judgments of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 28 and the case-law cited, and of 17 October 2018, Ryanair, C‑249/17, EU:C:2018:834, paragraph 16).
31


In that connection, the Court has stated that only payments which are the consideration for a transaction or an economic activity come within the scope of VAT and that such is not the case with regard to payments which arise simply from ownership of the asset, as in the case of dividends or other yields from a shareholding (judgment of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 29 and the case-law cited).
32


However, the position is otherwise where a financial holding in another company is accompanied by direct or indirect involvement in the management of the company in which the holding has been acquired, without prejudice to the rights held by the holding company as shareholder or associate, in so far as involvement of that kind entails carrying out transactions which are subject to VAT by virtue of Article 2 of Directive 2006/112, such as the supply of administrative, accounting and information-technology services (see, to that effect, judgment of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 30 and the case-law cited).
33


It is, furthermore, clear from the Court’s case-law that transactions relating to shares or holdings in a company are subject to VAT when they are carried out as part of a commercial share-dealing activity or in order to secure a direct or indirect involvement in the management of the companies in which the holding has been acquired, or where they constitute the direct, permanent and necessary extension of the taxable activity (judgment of 29 October 2009, SKF, C‑29/08, EU:C:2009:665, paragraph 31 and the case-law cited).
36


The Court has, furthermore, held that it is in the light of their objective content that it is necessary to determine whether there is a direct and immediate link between the supply of goods or services utilised and a taxable output transaction or, exceptionally, a taxable input transaction (judgment of 21 February 2013, Becker, C‑104/12, EU:C:2013:99, paragraph 24 and the case-law cited).
37


In that context, the Court stated that the exclusive reason for the transaction at issue should also be taken into account, since that reason must be regarded as a criterion for determining the objective content. Where it is clear that a transaction has not been performed for the purposes of the taxable activities of a taxable person, that transaction cannot be regarded as having a direct and immediate link with those activities within the meaning of the Court’s case-law, even if that transaction would, in the light of its objective content, be subject to VAT (judgment of 21 February 2013, Becker, C‑104/12, EU:C:2013:99, paragraph 29).