Jarosław Słaby v Minister Finansów (C-180/10) and Emilian Kuć and Halina Jeziorska-Kuć v Dyrektor Izby Skarbowej w Warszawie (C-181/10).
Date: 2011-09-15
27. It should be pointed out at the outset that it is apparent from the cases in the main proceedings that some of the sales relate to a tax period prior to the accession of the Republic of Poland to the European Union. However, the Court of Justice has jurisdiction to interpret European Union law only as regards its application in a new Member State with effect from the date of that State’s accession to the European Union (see, inter alia, order of 6 March 2007 in Case C‑168/06 Ceramika Paradyż , paragraph 22). The following considerations therefore relate solely to the transactions carried out after the date of the Republic of Poland’s accession to the European Union.
28. It must also be observed that the disputes in the main proceedings relate to a period during which the Sixth Directive and the VAT Directive were applicable in succession. There is however no need, for the purpose of the answers to the questions referred, to distinguish between the provisions resulting from those directives, as their scope is to be regarded as identical in substance for the purpose of the interpretation which the Court is required to give in the present case.
33. In this respect, it should be noted that Article 12(1) of the VAT Directive provides for an option and not an obligation for the Member States. It follows that, in order to use the option provided for by that provision, the Member States are required to make a choice to rely on it (see, by analogy, Case C-102/08 SALIX Grundstücks-Vermietungsgesellschaft  [2009] ECR I‑4629,  paragraphs 51 and 52).
34. According to the settled case-law of the Court, the transposition of a directive into domestic law does not necessarily require that its provisions be incorporated formally and verbatim in express, specific legislation; a general legal context may be adequate for the purpose provided that it does indeed guarantee the full application of the directive in a sufficiently clear and precise manner (see, by analogy, SALIX Grundstücks-Vermietungsgesellschaft , paragraph 40).
36. It is clear in this respect from the case-law that the mere exercise of the right of ownership by its holder cannot, in itself, be regarded as constituting an economic activity (see Case C-155/94 Wellcome Trust  [1996] ECR I‑3013, paragraph 32).
37. The Court would point out that the number and scale of the sales carried out in the present case are not in themselves decisive. As the Court has already held, the scale of the sales cannot constitute a criterion for distinguishing between the activities of an operator acting in a private capacity, which fall outside the scope of the VAT Directive, and those of an operator whose transactions constitute an economic activity. The Court has pointed out that a large volume of sales may also be carried out by operators acting in a private capacity (see, to that effect, Wellcome Trust , paragraph 37).
38. Similarly, the fact that, prior to the disposal, the party concerned proceeded to divide the land into plots in order to obtain a higher overall price from that land is not, in itself, decisive, and nor is the period of time over which those transactions take place or the level of income derived therefrom. Indeed, all those circumstances could fall within the scope of the management of the personal property of the party concerned.
39. That is not however the case where the party concerned takes active steps to market property by mobilising resources similar to those deployed by a producer, a trader or a person supplying services within the meaning of the second subparagraph of Article 9(1) of the VAT Directive.
40. Such active steps may consist, inter alia, in the carrying out on that land of preparatory work to make development possible, and the deployment of proven marketing measures.
41. Since those initiatives do not normally fall within the scope of the management of personal property, the supply of land designated for development in such a situation cannot be regarded as the mere exercise of the right of ownership by its holder.
43. That provision defines ‘taxable person’ by reference to the term ‘economic activity’. It is the existence of such an activity which establishes the status of ‘taxable person’ (see Case C‑32/03 Fini H [2005] ECR I-1599, paragraph 19).
44. In this respect, it should be recalled that ‘economic activity’ is defined in the second subparagraph of Article 9(1) of the VAT Directive as encompassing all activities of producers, traders and persons supplying services and, in particular, transactions comprising the exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis.
45. According to settled case-law, the simple acquisition and the mere sale of an asset cannot amount to exploitation of an asset intended to produce income on a continuing basis within the meaning of Article 9(1) of the VAT Directive, as the only consideration for those transactions consists of a possible profit on the sale of that asset. As a rule, such transactions cannot, by themselves, constitute economic activities within the meaning of that directive (see Case C-77/01 EDM  [2004] ECR I-4295, paragraph 58, and Case C-8/03 BBL [2004] ECR I‑10157, paragraph 39).
48. Moreover, the fact that the applicants in the main proceedings in Case C-181/10 registered themselves for VAT subject to the flat-rate scheme in respect of their agricultural activity is irrelevant in the light of the foregoing considerations. As the Polish Government and the European Commission rightly point out, transactions other than the supply of agricultural products and agricultural services within the meaning of Article 295(1) of the VAT Directive provided by the flat-rate farmer within the framework of agricultural undertakings remain subject to the general scheme under that directive (see Case C-321/02 Harbs  [2004] ECR I‑7101, paragraphs 31 and 36, and Case C-43/04 Stadt Sundern  [2005] ECR I-4491, paragraph 20).
49. In the light of the foregoing, the answer to the questions referred is that the supply of land designated for development must be regarded as subject to VAT under the national legislation of a Member State if that State has availed itself of the option provided for by Article 12(1) of the VAT Directive, irrespective of whether the transaction is carried out on a continuing basis or whether the person who effected the supply carries out an activity of a producer, a trader or a person supplying services, to the extent that that transaction does not constitute the mere exercise of the right of ownership by its holder.