Cookies World Vertriebsgesellschaft mbH iL v Finanzlandesdirektion für Tirol.
Date: 2003-09-11
44. In order to answer the question it is appropriate, at the outset, to consider whether the original taxation in Germany of the hire of a vehicle under a leasing contract and the subsequent refund of input tax were in accordance with the rules laid down by the Sixth and Eighth Directives.
45. In that regard, it must be observed that the leasing of vehicles is a supply of services within the meaning of Article 6(1) of the Sixth Directive, in respect of which the place of taxation is determined in Article 9.
46. As the Court has stated,  inter alia , in Case 168/84  Berkholz  [1985] ECR 2251, paragraph 14, Article 9 of the Sixth Directive is designed to secure the rational delimitation of the respective areas covered by national VAT rules by determining in a uniform manner the place where services are deemed to be provided for tax purposes. That provision is deemed definitively to determine the Member State with exclusive competence to tax a supply of services.
47. It is clear from the case-law of the Court that, in respect of the leasing of all forms of transport, the place of taxation laid down by the Sixth Directive is generally, for the sake of simplification, deemed to be the place where the supplier of the form of transport has established his business or has a fixed establishment and not the place where the goods hired out are used (see, to that effect, Case 51/88  Hamann  [1989] ECR 767, paragraphs 17 and 18).
56. As regards Article 6(2), first subparagraph, (a), of the Sixth Directive, it must be recalled that under that provision the use of goods forming part of the assets of a business for purposes other than those of its business is to be treated as supplies of services for consideration where the VAT on such goods is wholly or partly deductible. As is apparent from the Court ' s case-law, that provision is designed to prevent the non-taxation of business goods used for private purposes (see,  inter alia  Case 50/88  Kühne  [1989] ECR 1925, paragraph 8).
59. As the Advocate General pointed out in point 29 of his Opinion, the exceptions to harmonisation must be interpreted strictly. Any recourse to derogating systems entails divergence between the levels of the tax burden in the Member States. As the Commission rightly argues in paragraph 46 of its observations, the second subparagraph of Article 6(2) of the Sixth Directive must generally be interpreted as meaning that the Member States may refrain from treating certain supplies or uses as services supplied for consideration. On the other hand, that provision in no way authorises the Member States to provide for chargeable events not referred to in the first subparagraph of Article 6(2) of the Sixth Directive.
60. Finally, the taxation in Austria by the Finanzamt Schwaz was based on the charge for the vehicle leased in Germany by Cookies World, that is the consideration for the use of the vehicle under a leasing contract. As it is clear from paragraph 51 of the present judgment, the leasing of the vehicle in question had already lawfully been subject to VAT in Germany. To tax a supply of services in another Member State when it has already lawfully been subject to VAT in the State of the supplier of the services gives rise to double taxation contrary to the principle of fiscal neutrality inherent in the common system of VAT. The fact that VAT had to be paid by the lessor of the vehicle in Germany while, in Austria, that obligation fell on Cookies World does nothing to change the fact that in reality one and the same economic transaction, that is, the hire of a vehicle under a leasing contract, was taxed twice.
62. Under Article 17(6) of the Sixth Directive, and in particular the second subparagraph, the Member States are authorised to retain their existing legislation as at the date of entry into force of the Sixth Directive in regard to exclusion from the right of deduction until such time as the Council has adopted the provisions envisaged by that article (see Case C-345/99  Commission  v  France  [2001] ECR I-4493, paragraph 19).
63. It appears from the file that Paragraph 1(1)(2)(d) of the UStG 1994 is designed so that the exclusion of the deduction of VAT in connection with the leasing of certain vehicles is applied in Austria in the same way, from the economic point of view, as it was until the end of 1994, that is, at the time of Austria ' s accession to the European Union. It seems that the Austrian Government has achieved the objective of retaining the existing legislation on the subject only indirectly. A new chargeable event for VAT purposes has been introduced in the taxation scheme by way of a new provision, which is not the situation referred to by Article 17(6) of the Sixth Directive.
66. It is apparent from the order for reference that Paragraph 1(1)(2)(d) of the UStG 1994 first entered into force on 6 January 1995. As the Court has already held in Case C-40/00  Commission  v  France  [2001] ECR I-4539, paragraph 17, national legislation does not constitute a derogation permitted by the second subparagraph of Article 17(6) of the Sixth Directive if its effect is to increase, after the entry into force of the Sixth Directive, the extent of existing exclusions, thus diverging from the objective of that directive.
67. As far as concerns Article 17(7) of the Sixth Directive, which is relied on indirectly by the Austrian Government, it is not necessary to rule on the question whether the national measures in question in the main proceedings are of a temporary nature and designed to deal with a cyclical economic situation; it is nevertheless common ground that the Austrian authorities did not consult the VAT Committee before adopting Paragraph 1(1)(2)(d) of the UStG 1994. The Austrian Government cannot therefore rely on Article 17(7) of the Sixth Directive to the detriment of taxable persons (see, by way of analogy, concerning Article 27(1) and (5) of the Sixth Directive, Case C-97/90  Lennartz  [1991] ECR I-3795, paragraph 34).