Commission of the European Communities v Federal Republic of Germany.
Date: 1992-10-27
10 It must be borne in mind in the first place that the system of remedies set up by the Treaty distinguishes between the remedies provided for in Articles 169 and 170, which permit a declaration that a Member State has failed to fulfil its obligations, and those contained in Articles 173 and 175, which permit judicial review of the lawfulness of measures adopted by the Community institutions, or the failure to adopt such measures. Those remedies have different objectives and are subject to different rules. In the absence of a provision of the Treaty expressly permitting it to do so, a Member State cannot, therefore, properly plead the unlawfulness of a decision addressed to it as a defence in an action for a declaration that it has failed to fulfil its obligations arising out of its failure to implement that decision (Case 226/87 Commission v Greece [1988] ECR 3611, paragraph 14). Nor can it plead the unlawfulness of a directive which the Commission criticizes it for not having implemented.
11 The position could be different only if the measure in question contained such particularly serious and manifest defects that it could be deemed non-existent (Case 226/87, cited above, paragraph 16), and no allegation to that effect has been made by the German Government in this case.
12 Moreover, whilst the Court recognizes that, in an action for a declaration that a Member State has failed to fulfil its obligations, a Member State may plead that it was absolutely impossible for it to implement a Community decision properly (judgment in Case 213/85 Commission v Netherlands [1988] ECR 281, paragraph 22), the arguments put forward in support of that objection do not establish the absolute impossibility of properly implementing Article 26 of the Sixth Directive. It need merely be stated that, even if the technical difficulties pleaded by the defendant regarding the classification of air transport services as between Community and non-Community territory are real, they have not prevented the transposition of the contested provision into the national law of several Member States. The VAT Advisory Committee, whose proposals for simplification are referred to by Germany, has also expressly indicated that the measures advocated by it do not mean that travel agents cannot carry out the breakdown provided for in Article 26(3) of the Sixth Directive.
The application of the transitional provisions of the Sixth Directive
15 The very wording of the transitional provisions of Article 28(3)(b) of the Sixth Directive, which authorize the Member States to "continue to exempt the activities set out in Annex F under conditions existing in the Member State concerned", precludes the introduction of new exemptions or any extension of the scope of existing exemptions (Case 73/85 Kerrutt [1986] ECR 2219, paragraph 17) and the reintroduction of exemptions existing before VAT was imposed on the services in question in accordance with the Sixth Directive (Case C-35/90 Commission v Spain [1991] ECR I-5073, paragraphs 6 to 9).
17 Since Germany has not, and does not deny that it has not, maintained the general VAT scheme for the various transactions performed by travel agents and has adopted a special scheme based on the rules laid down in Article 26 of the Sixth Directive, it cannot rely on the possibility of continuing to exempt certain activities for which exemption is not envisaged by that article. As the Commission observes, moreover, to allow the maintenance of partial exemptions not expressly provided for by the transitional provisions of the Sixth Directive applicable to travel agents would run counter to the principle of legal certainty, which requires the clear and precise application of the rules laid down by Community directives.
25 First, even if it is true that maintenance of the transitional scheme in certain Member States may give rise to distortions of competition, that fact cannot authorize Germany, if it does not lawfully use that transitional scheme, not to apply Article 26 of the Sixth Directive correctly and thereby itself to create distortions of that kind to the detriment of the Member States which transposed the provisions of that article.
26 Secondly, the Sixth Directive provided, as indicated in paragraph 2 of this judgment, for a special VAT scheme applicable to the transactions of travel agents if those agents deal with customers in their own name and use the supplies and services of other taxable persons in the provision of travel facilities. That scheme does not cover transport services supplied without the involvement of any intermediary, which are covered by the general provisions applicable to transport undertakings. The tax position of those two types of transaction is thus not comparable. Even if maintenance of a transitional scheme under which certain transport services are exempted may be liable to accentuate the differences in the circumstances of travel organizers, according to whether or not they are themselves transport undertakings, and between travellers, according to whether or not they use the services of an agent, that fact likewise cannot justify incorrect application of the special scheme provided for in the directive.