Finanzamt Uelzen v Dieter Armbrecht.
Date: 1995-10-04
13 It is true that Article 5(1) of the Directive does not define the extent of the property rights transferred, which must be determined in accordance with the applicable national law, but the Court has held that the objective of the Directive, which is to base the common system of VAT on a uniform definition of taxable transactions, would be jeopardized if the preconditions for a supply of goods, which is one of the three taxable transactions, varied from one Member State to another (Case C-320/88 Staatssecretaris van Financiën v Shipping and Forwarding Enterprise Safe [1990] ECR I-285).
14 Consequently, the national law applicable in the main proceedings cannot provide the answer to the question raised, which concerns not the civil law applicable to supply but whether the transaction is subject to the tax.
16 It is clear from the wording of Article 2(1) of the Directive that a taxable person must act "as such" for a transaction to be subject to VAT.
17 A taxable person performing a transaction in a private capacity does not act as a taxable person.
18 A transaction performed by a taxable person in a private capacity is not, therefore, subject to VAT.
19 Nor is there any provision in the Directive which precludes a taxable person who wishes to retain part of an item of property amongst his private assets from excluding it from the VAT system.
20 This interpretation makes it possible for a taxable person to choose whether or not to integrate into his business, for the purposes of applying the Directive, part of an asset which is given over to his private use. That approach concurs with one of the basic principles of the Directive, namely that a taxable person must bear the burden of VAT only when it relates to goods or services which he uses for private consumption and not for his taxable business activities. The availability of that option does not impede the application of another rule stated by the Court in Case C-97/90 Lennartz v Finanzamt Muenchen III [1991] ECR I-3795, to the effect that capital goods used both for business and private purposes may none the less be treated as business goods the VAT on which is in principle wholly deductible.
21 As the Advocate General pointed out in point 50 of his Opinion, apportionment between the part allocated to the taxable person' s business activities and the part retained for private use must be based on the proportions of private and business use in the year of acquisition and not on a geographical division. The taxable person must, moreover, throughout his period of ownership of the property in question, demonstrate an intention to retain part of it amongst his private assets.
24 The answer to the first question must therefore be that, where a taxable person sells property part of which he had chosen to reserve for his private use, he does not act with respect to the sale of that part as a taxable person within the meaning of Article 2(1) of the Directive.
The second question
27 It is only to the extent that an item is used for the purposes of his taxable transactions that a taxable person may deduct from the tax which he is liable to pay the VAT due or to be paid in respect of that item.
28 It is established that if the taxable person chooses to exclude part of an item of property from his business assets, that part never forms part of those assets. He cannot, therefore, be regarded as using goods forming part of his business assets for the purposes of Articles 5(6) and 6(2)(a) of the Directive. Consequently, that part, which is not used for providing taxable business services or deliveries, does not fall within the scope of the VAT system and must not be taken into account for the application of Article 17(2)(a) of the Directive.
29 The answer to the second question must therefore be that, where a taxable person sells property part of which he had chosen at the time of acquisition not to assign to his business, only the part of the property assigned to his business is to be taken into account for the application of Article 17(2) of the Directive.
The third question
32 Since, as is clear from the answer given to the second question, the right to deduct input tax under Article 17(2) of the Directive applies only to the part of the relevant asset assigned to the business, the adjustment of that deduction must also be limited to that part of the asset.