Lajvér Meliorációs Nonprofit Kft. and Lajvér Csapadékvízrendezési Nonprofit Kft. v Nemzeti Adó- és Vámhivatal Dél-dunántúli Regionális Adó Főigazgatósága (NAV).
Date: 2016-06-02
20


It must be recalled that, although Directive 2006/112 gives a very wide scope to VAT, only activities of an economic nature are covered by that tax (see, inter alia, judgments of 26 June 2003 in MKG-Kraftfahrzeuge-Factoring, C‑305/01, EU:C:2003:377, paragraph 39; 26 June 2007 in T-Mobile Austria and Others, C‑284/04, EU:C:2007:381, paragraph 34; and 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 34).
21


According to Article 2 of Directive 2006/112 concerning taxable transactions, together with the importation of goods, the intra-Community acquisition of goods, the supply of goods and the supply of services effected for consideration within the territory of the country by a taxable person are subject to VAT. Furthermore, under Article 9 of that directive, ‘taxable person’ means any person who independently carries out an economic activity, whatever the purpose or results of that activity (see, inter alia, judgments of 26 March 1987 in Commission v Netherlands, 235/85, EU:C:1987:161, paragraph 6; 16 September 2008 in Isle of Wight Council and Others, C‑288/07, EU:C:2008:505, paragraphs 26 and 27; and 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 35).
22


Likewise, the analysis of the terms ‘supply of goods’ and ‘supply of services’ shows that those terms, which define, in part, taxable transactions under Directive 2006/112, are objective in nature and apply without regard to the purpose or results of the transactions concerned (see, to that effect, judgment of 12 January 2006 in Optigen and Others, C‑354/03, C‑355/03 and C‑484/03, EU:C:2006:16, paragraph 44).
23


‘Economic activity’ is defined in the second subparagraph of Article 9(1) of Directive 2006/112 as including all activities of producers, traders and persons supplying services, inter alia the exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis (see, inter alia, judgments of 26 June 2007 in T-Mobile Austria and Others, C‑284/04, EU:C:2007:381, paragraph 33; 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 36; and 20 June 2013 in Finanzamt Freistadt Rohrbach Urfahr, C‑219/12, EU:C:2013:413, paragraph 16).
24


In that regard, it is important to point out that, under the second subparagraph of Article 9(1) of Directive 2006/112, in accordance with the requirements of the principle of neutrality of the common system of value added tax, the term ‘exploitation’ refers to all transactions, whatever may be their legal form, by which it is sought to obtain income from the goods in question on a continuing basis (see, to that effect, judgments of 26 June 2007 in T-Mobile Austria and Others, C‑284/04, EU:C:2007:381, paragraph 38, and 13 December 2007 in Götz, EU:C:2007:789, paragraph 18).
26


The basis of assessment for a supply of services is everything which makes up the consideration for the service provided and a supply of services is therefore taxable only if there is a direct link between the service supplied and the consideration received. It follows that a supply of services is effected ‘for consideration’ within the meaning of Article 2(1)(c) of Directive 2006/112, and hence is taxable, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient (judgments of 3 March 1994 in Tolsma, C‑16/93, EU:C:1994:80, paragraphs 13 and 14; 21 March 2002 in Kennemer Golf, C‑174/00, EU:C:2002:200, paragraph 39; and 6 October 2009 in SPÖ Landesorganisation Kärnten, C‑267/08, EU:C:2009:619, paragraph 19).
28


In the first place, it is apparent from the order for reference that the activity at issue in the main proceedings is the operation of agricultural engineering works including a water disposal system, a reservoir and a rainwater collection system. Such an activity is to be regarded as falling within the concept of ‘economic activity’ as defined in the second subparagraph of Article 9(1) of Directive 2006/112 if it is engaged in for the purposes of obtaining income on a continuing basis.
29


The question whether that activity is designed to obtain income on a continuing basis is an issue of fact that must be assessed having regard to all the circumstances of the case, which include, inter alia, the nature of the property concerned (see judgments of 19 July 2012 in Rēdlihs, C‑263/11, EU:C:2012:497, paragraph 33, and 20 June 2013 in Finanzamt Freistadt Rohrbach Urfahr, C‑219/12, EU:C:2013:413, paragraph 19).
32


In that respect, although it is not certain that the applicants in the main proceedings had begun operating the agricultural engineering works on the date they claimed the right to deduct input VAT, it should be recalled that a person who has the intention, confirmed by objective evidence, of commencing independently an ‘economic activity’ within the meaning of Article 9 of Directive 2006/112 and incurs the first investment expenditure for those purposes must be regarded as a taxable person (see, by analogy, judgments of 21 March 2000 in Gabalfrisa and Others, C‑110/98 to C‑147/98, EU:C:2000:145, paragraph 47, and 8 June 2000 in Breitsohl, C‑400/98, EU:C:2000:304, paragraph 34).
33


In addition, since the prospective operating fee is planned to be charged for a period of eight years, it must be regarded as falling within the scope of ‘a continuing basis’ within the meaning of the case-law cited in paragraph 23 above.
35


On the one hand, it should be noted that it is clear both from the wording of the second subparagraph of Article 9(1) of Directive 2006/112 and from the case-law of the Court that, for a finding that the exploitation of tangible or intangible property is carried out for the purpose of obtaining income therefrom, it is irrelevant whether or not that exploitation is intended to make a profit (see, inter alia, judgment of 20 June 2013 in Finanzamt Freistadt Rohrbach Urfahr, C‑219/12, EU:C:2013:413, paragraph 25). Thus, the fact that, on account of their legal form, the applicants in the main proceedings may engage in commercial activities only on an ancillary basis is irrelevant to the finding that they are engaging in an economic activity designed to obtain income on a continuing basis.
36


On the other hand, the effect of the possible pursuit of the activity at issue in the main proceedings on an ancillary basis on the economic nature of that activity must be determined by examining all the circumstances in which the agricultural engineering works are operated in order to determine whether they are actually used for the purpose of obtaining income on a continuing basis (see, to that effect, judgments of 26 September 1996 in Enkler, C‑230/94, EU:C:1996:352, paragraph 27, and 19 July 2012 in Rēdlihs, C‑263/11, EU:C:2012:497, paragraph 34).
38


Lastly, the fact that the investments were largely financed by aids granted by the Member State and the European Union cannot have a bearing on whether or not the activity pursued or planned by the applicants in the main proceedings is to be regarded as an economic activity, since the concept of ‘economic activity’ is objective in nature and applies not only without regard to the purpose or results of the transactions concerned but also without regard to the method of financing chosen by the operator concerned, which also holds true in relation to public subsidies (see, as regards the prohibition of limiting the right to deduct, judgments of 6 October 2005 in Commission v France, C‑243/03, EU:C:2005:589, paragraphs 32 and 33, and 23 April 2009 in PARAT Automotive Cabrio, C‑74/08, EU:C:2009:261, paragraphs 20 and 26).
41


The fact that, in the context of that activity, the maintenance of the public roads in order to ensure that the water flows freely constitutes a legal obligation can have no bearing on the assessment as to whether the activity at issue in the main proceedings is effected ‘for consideration’, such a fact not being liable to call into question the classification of such an activity as a ‘supply of services’ or the direct link between the service provided and the consideration given for it.
42


It has been held that the fact that the activity in question consists in the performance of duties conferred and regulated by law in the public interest is irrelevant for the purposes of determining whether that activity can be classified as a supply of services effected for consideration (see, to that effect, judgments of 12 September 2000 in Commission v France, C‑276/97, EU:C:2000:424, paragraph 33, and 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 40). Furthermore, it has also been held that even where the activity in question is designed to fulfil a constitutional obligation exclusively and directly incumbent upon the Member State concerned, the direct link between the supply of services and the consideration received cannot be called into question by this fact alone (see, to that effect, judgment of 29 October 2015 in Saudaçor, C‑174/14, EU:C:2015:733, paragraph 39).
45


It should be noted that the fact that the price paid for an economic transaction is higher or lower than the cost price, and, therefore, higher or lower than the open market value, is irrelevant for the purpose of establishing whether it was a transaction effected for consideration (see, to that effect, judgments of20 January 2005 in Hotel Scandic Gåsabäck, C‑412/03, EU:C:2005:47, paragraph 22; 9 June 2011 in Campsa Estaciones de Servicio, C‑285/10, EU:C:2011:381, paragraph 25; and 27 March 2014 in Le Rayon d’Or, C‑151/13, EU:C:2014:185, paragraphs 36 and 37).
46


Therefore, such a fact is not such as to affect the direct link between the services supplied or to be supplied and the consideration received or to be received, the amount of which is determined in advance on the basis of well-established criteria (see, to that effect, judgment of 29 October 2015 in Saudaçor, C‑174/14, EU:C:2015:733, paragraph 36).
48


In such a context, the operating fee, even at a modest amount, can constitute remuneration for the service supplied by the applicants in the main proceedings to the owners of the land on which the works are situated, in accordance with the judgments of 3 March 1994 in Tolsma (C‑16/93, EU:C:1994:80, paragraphs 13 and 14); 21 March 2002 in Kennemer Golf (C‑174/00, EU:C:2002:200, paragraph 39); and 6 October 2009 in SPÖ Landesorganisation Kärnten (C‑267/08, EU:C:2009:619, paragraph 19).
50


In addition, it is, according to the circumstances, for that court to ensure that the transaction at issue in the main proceedings is not a wholly artificial arrangement which does not reflect economic reality and is set up with the sole aim of obtaining a tax advantage (see, to that effect, judgments of 27 October 2011 in Tanoarch, C‑504/10, EU:C:2011:707, paragraph 51, and 12 July 2012 in J.J. Komen en Zonen Beheer Heerhugowaard, C‑326/11, EU:C:2012:461, paragraph 35).