AZ v Minister Finansów.
Date: 2017-11-09
22


As a preliminary point, it must be recalled that, according to Article 96 of the VAT Directive, the same rate of VAT, that is the standard rate fixed by each Member State, is applicable to supplies of goods and services. By derogation from that principle, the possibility to apply reduced rates of VAT is provided for by virtue of Article 98 thereof. Annex III to that directive lists the categories of supplies of goods and services to which the reduced rates mentioned in Article 98 may apply (judgment of 9 March 2017, Oxycure Belgium, C‑573/15, EU:C:2017:189, paragraphs 20 and 21).
23


As regards the application of reduced rates of VAT, it is apparent from the Court’s case-law that it is for the Member States, subject to compliance with the principle of fiscal neutrality inherent in the common system of VAT, to determine more precisely the supplies of goods and services included in the categories in Annex III to the VAT Directive to which the reduced rate is to apply (judgment of 11 September 2014, K, C‑219/13, EU:C:2014:2207, paragraph 23).
24


The possibility of applying the reduced rate of VAT selectively is justified, inter alia, by the fact that, since that rate is the exception, the restriction of its application to concrete and specific aspects of the category of supply in question is consistent with the principle that exemptions or derogations must be interpreted restrictively (judgment of 6 May 2010, Commission v France, C‑94/09, EU:C:2010:253, paragraph 29).
25


In this regard, it should be noted that Article 98(3) of the VAT Directive provides that Member States may use the CN when applying the reduced rates to categories of goods to establish the precise coverage of the category concerned. However, it must be noted that use of the CN is just one of a number of ways to establish the precise coverage of the category concerned.
28


Thus, in so far as the criterion relating to a certain number of days of shelf life precisely defines the category concerned, it must be found that that selective application of the reduced VAT rate to a concrete and specific aspect of the goods included in one of the categories of Annex III is, in principle, compatible with Article 98 of the VAT Directive.
29


However, in order to answer the question referred by the national court, it must be determined whether national legislation, such as that at issue in the main proceedings, infringes the principle of fiscal neutrality.
30


It follows from settled case-law that that principle precludes similar goods or services which are in competition with each other being treated differently for VAT purposes (judgment of 11 September 2014, K, C‑219/13, EU:C:2014:2207, paragraph 24 and the case-law cited).
31


As regards the assessment of the similarity of the goods or services concerned, which is ultimately a matter for the national court to determine, it is clear from the Court’s case-law that account must be taken primarily of the point of view of an average consumer. Goods or services are similar where they have similar characteristics and meet the same needs from the point of view of consumers, the test being whether their use is comparable, and where the differences between them do not have a significant influence on the decision of the average consumer to use one or other of those goods or services (judgment of 11 September 2014, K, C‑219/13, EU:C:2014:2207, paragraph 25).
32


It is therefore for the referring court to make a specific assessment whether the fact that the expiry date is fixed in such a way that the shelf life does not exceed 45 days is determinative from the point of view of the average Polish consumer when choosing pastry goods and cakes (see, to that effect, judgment of 11 September 2014, K, C‑219/13, EU:C:2014:2207, paragraph 33).
35


On the other hand, if the referring court, in the specific assessment which it is to undertake, finds that the reduced VAT rate for pastry goods and cakes with an expiry date fixed so that the shelf life does not exceed 45 days does not have the effect of favouring the sale of such goods over the sale of pastry goods and cakes with an expiry date fixed in such a way that the shelf life exceeds 45 days, it would follow from this that those two categories of pastry goods and cakes are not similar goods in competition with each other (see, to that effect, judgment of 3 May 2001, Commission v France, C‑481/98, EU:C:2001:237, paragraph 27). In that situation, the principle of fiscal neutrality would not preclude the national provisions at issue in the main proceedings.