Commission of the European Communities v Federal Republic of Germany.
Date: 2002-06-20
16 According to settled case-law, the purpose of the pre-litigation procedure is to give the Member State concerned an opportunity, on the one hand, to comply with its obligations under Community law and, on the other, to avail itself of its right to defend itself against the complaints made by the Commission (see, in particular, Commission v Germany, cited above, paragraph 22, and Case C-439/99 Commission v Italy [2002] ECR I-305, paragraph 10).
17 The proper conduct of that procedure constitutes an essential guarantee required by the Treaty not only in order to protect the rights of the Member State concerned, but also so as to ensure that any contentious procedure will have a clearly defined dispute as its subject-matter (see Case C-1/00 Commission v France [2001] ECR I-9989, paragraph 53).
18 It follows, first, that the subject-matter of the proceedings under Article 226 EC is delimited by the pre-litigation procedure governed by that provision. Accordingly, the application must be based on the same grounds and pleas as the reasoned opinion (see, in particular, Commission v Italy, cited above, paragraph 11).
19 Second, the reasoned opinion must contain a cogent and detailed exposition of the reasons which led the Commission to the conclusion that the Member State concerned had failed to fulfil one of its obligations under the Treaty (see, in particular, Commission v Italy, paragraph 12).
24 Furthermore, although the Commission relied specifically on Article 13(A)(1)(i) of the Sixth Directive for the first time in the application, it was merely replying to a ground of defence raised also for the first time by the German Government in response to the reasoned opinion and, in so doing, it amended neither the definition nor the basis of the alleged infringement (see, to that effect, Case 211/81 Commission v Denmark [1982] ECR 4547, paragraph 16).
38 First, the German Government's argument according to which Article 2 of the Sixth Directive does not contain a definition of liability to VAT must be dismissed. As the Court recalled in Case 203/87 Commission v Italy [1989] ECR 371, paragraph 2, that provision defines the transactions which are to be subject to VAT as the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such and the importation of goods.
39 The Sixth Directive provides for exemptions from VAT for certain categories of those transactions, in particular in Title X thereof, which includes Article 13. In so far as an exemption is not provided for by the Sixth Directive, it constitutes a derogation from the general rule set out in Article 2 thereof. Such a derogation can comply with Community law only if it is authorised in accordance with the provisions of that directive (see, to that effect, Case 203/87 Commission v Italy, cited above, paragraph 10).
40 Therefore, national legislation exempting transactions from VAT, which is neither covered by an exemption laid down in the Sixth Directive nor authorised in accordance with an exception provided for by that directive, constitutes an infringement of Article 2 thereof.
43 In that connection, the terms used to specify the exemptions provided for by Article 13 of the Sixth Directive are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person (see, in particular, Case 348/87 Stichting Uitvoering Financiële Acties [1989] ECR 1737, paragraph 13; Institute of the Motor Industry, paragraph 17, and D., paragraph 15).
44 It is settled case-law that those exemptions constitute independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see, in particular, Case C-349/96 CPP [1999] ECR I-973, paragraph 15, and Case C-240/99 Skandia [2001] ECR I-1951, paragraph 23).
45 It must also be remembered that the aim of Article 13(A) of the Sixth Directive is to exempt from VAT certain activities which are in the public interest. That provision does not however provide exemption from the application of VAT for every activity performed in the public interest, but only for those which are listed and described in great detail in it (see, in particular, Institute of the Motor Industry, paragraph 18).
46 Also, Article 13(A)(1)(i) of the Sixth Directive does not contain any definition of the concept of services closely related to university education.
47 Nevertheless, that concept does not require an especially strict interpretation since the exemption of the supply of services closely related to university education is designed to ensure that access to the benefits of such education is not hindered by the increased costs of providing it that would follow if it, or the supply of services and of goods closely related to it, were subject to VAT (see, by analogy, in relation to Article 13(A)(1)(b) of the Sixth Directive, Case C-76/99 Commission v France [2001] ECR I-249, paragraph 23). However, if the undertaking by State universities of research projects for consideration is made subject to VAT, that does not have the effect of increasing the cost of university education.
48 In addition, contrary to the German Government's arguments, although the undertaking of such projects may be regarded as of great assistance to university education, it is not essential to attain its objective, that is, in particular, the teaching of students to enable them to pursue a professional activity. Indeed, many universities achieve this aim without carrying out research projects for consideration and there are other ways to ensure a link between university education and professional life.
49 Therefore, the undertaking by State universities of research projects for consideration cannot be regarded as an activity closely related to university education for the purposes of Article 13(A)(1)(i) of the Sixth Directive.
50 In relation to the German Government's argument concerning the simplification of the payment of VAT, it should be recalled that, according to settled case-law, although the introductory sentence of Article 13(A)(1) of the Sixth Directive states that Member States are to lay down the conditions for exemptions in order to ensure the correct and straightforward application of the exemptions and to prevent any possible evasion, avoidance or abuse, those conditions cannot affect the definition of the subject-matter of the exemptions envisaged (see, in particular, Case C-124/96 Commission v Spain [1998] ECR I-2501, paragraphs 11 and 12, and Case C-76/99 Commission v France, cited above, paragraph 26).