Finanzamt Gladbeck v Edith Linneweber (C-453/02) and Finanzamt Herne-West v Savvas Akritidis (C-462/02).
Date: 2005-02-17
19. As a preliminary point, it must be observed, first, that Paragraph 4(9)(b) of the UStG exempts from VAT the turnover made by licensed public casinos from games of chance or gaming machines without defining the form or the details of the organisation and operation of such games and machines.
20. Second, as the Bundesfinanzhof pointed out in its order for reference, it must be observed that licensed public casinos are not subject to any restriction as regards the games of chance and gaming machines they may operate.
21. Thus, games of chance and gaming machines such as those at issue in the main proceedings may, regardless of the detailed arrangements for their organisation, be operated by licensed public casinos, without the turnover they make from the operation of those games being subject to VAT.
23. In order to reply to the question as reformulated, it must be observed that it is clear from Article 13B(f) of the Sixth Directive that gambling is in principle to be exempted from VAT but that the Member States retain the power to lay down the conditions and limitations of that exemption ( Fischer , paragraph 25).
24. However, in exercising that power, the Member States must respect the principle of fiscal neutrality. According to the case-law of the Court of Justice, that principle precludes, in particular, treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes, so that those goods or supplies must be subjected to a uniform rate (see, inter alia,  Case C-267/99 Adam  [2001] ECR I-7467, paragraph 36, and Case C-109/02 Commission  v Germany  [2003] ECR I-12691, paragraph 20).
25. It is clear from that case-law and from the judgments in Case C-216/97 Gregg  [1999] ECR  I-4947, paragraph 20, and Fischer , that the identity of the manufacturer or the provider of the s ervices and the legal form by means of which they exercise their activities are, as a rule, irrelevant in assessing whether products or services supplied are comparable.
27. Thus, in paragraph 31 of its judgment in Fischer , the Court of Justice held that Article 13B(f) of the Sixth Directive must be interpreted as meaning that a Member State may not impose VAT on the unlawful operation of a game of chance organised outside a licensed public casino when the operation of the same game by such a casino is exempted.
29. It follows that, in exercising their powers under Article 13B(f) of the Sixth Directive, that is to say, the power to determine the conditions and limitations subject to which the operation of games of chance and gaming machines is to be exempted from the VAT provided for by that provision, the Member States cannot validly make that exemption dependent upon the identity of the operator of such games and machines.
33. On this point, it should be noted that wherever the provisions of a directive appear, so far as their subject-matter is concerned, to be unconditional and sufficiently precise, they may, in the absence of implementing measures adopted within the prescribed period, be relied on against any national provision which is incompatible with the directive or in so far as they define rights which individuals are able to assert against the State (see, inter alia, Case 8/81 Becker  [1982] ECR 53, paragraph 25, Case C-141/00 Kügler  [2002] ECR I-6833, paragraph 51, and Joined Cases C-465/00, C-138/01 and C-139/01 Österreichischer Rundfunk and Others  [2003] ECR I-4989, paragraph 98).
34. As regards more specifically Article 13B of the Sixth Directive, it is apparent from the case-law that, whilst that provision undoubtedly confers upon the Member States a discretion as regards laying down the conditions for the application of certain of the exemptions it provides for, a Member State may not rely, as against a taxpayer who is able to show that his tax position actually falls within one of the categories of exemption laid down in the directive, upon its failure to adopt the very provisions which are intended to facilitate the application of that exemption ( Becker , cited above, paragraph 33).
35. It must be added that the fact that Article 13B(f) of the Sixth Directive confirms the discretion which the Member States have by specifying that they have the power to lay down the conditions and limitations to which the exemption for games of chance and gambling is subject, is not such as to call that interpretation into question. Since those games are, as a rule, exempt from VAT, any operator of such games can directly rely on that exemption provided that the Member State concerned has waived the power expressly conferred on it by Article 13B(f) of the Sixth Directive or has failed to exercise that power.
36. It is important to note, moreover, that the principle which applies where a Member State has not exercised the powers conferred on it by Article 13B(f) of the Sixth Directive must apply a fortiori  where, in exercising that power, a Member State has adopted national provisions which are not compatible with the directive.
37. It follows that, as the Advocate General pointed out in point 72 of her Opinion, where, as in the cases in the main proceedings, the conditions or limitations which a Member State imposes on the exemption from VAT for games of chance or gambling are contrary to the principle of fiscal neutrality, that Member State cannot rely on such conditions or limitations to refuse an operator of such games the exemption which he may legitimately claim under the Sixth Directive.
38. Accordingly, the answer to the third question in Case C-453/02 and the second question in Case C-462/02 must be that Article 13B(f) of the Sixth Directive has direct effect in the sense that it can be relied on by an operator of games of chance or gaming machines before national courts to prevent the application of rules of national law which are inconsistent with that provision.
The effect ratione temporis of this judgment
41. In that connection, regard must be had to the settled case-law of the Court to the effect that the interpretation which, in the exercise of the jurisdiction conferred on it by Article 234 EC, the Court gives to a rule of Community law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its entry into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before the competent courts are satisfied (see, in particular, Joined Cases C-367/93 to C-377/93 Roders and Others   [1995] ECR I-2229, paragraph 42, and Case C-347/00 Barreira Pérez  [2002] ECR I-8191, paragraph 44).
42. It is only exceptionally that, in application of a general principle of legal certainty which is inherent in the Community legal order, the Court may decide to restrict the right to rely upon a provision it has interpreted with a view to calling in question legal relations established in good faith (Case C-104/98 Buchner and Others  [2000] ECR I-3625, paragraph 39, and Barreira Pérez , cited above, paragraph 45).
43. As regards the cases in the main proceedings, it must be held, first, that the conduct of the Commission following the judgment in Glawe , cited above, cannot validly be relied on in support of the contention that Paragraph 4(9) of the UStG can reasonably be considered to be in conformity with the Sixth Directive. The case giving rise to that judgment concerned only the determination of the basis of assessment for the turnover generated by the operation of gaming machines and did not in any way relate to the difference of treatment accorded in general as regards VAT between licensed public casinos and other operators of games of chance.
44. Second, the financial consequences which might ensue for a Member State from a preliminary ruling have never in themselves justified limiting the temporal effect of such a ruling (see, in particular, Roders and Others , cited above, paragraph 48, and Buchner and Others , paragraph 41).
45. Accordingly, there is no need to limit the effect of this judgment ratione temporis.