Minister Finansów v Gmina Wrocław.
Date: 2018-06-13
30


At the outset it must be recalled that the VAT Directive establishes a common system of VAT based on, inter alia, a uniform definition of taxable transactions (judgment of 11 May 2017, Posnania Investment, C‑36/16, EU:C:2017:361, paragraph 25 and the case-law cited).
35


In that regard, while Article 14(1) of the VAT Directive defines generally the concept of a ‘supply of goods’, it can be concluded from a literal interpretation of Article 14(2), in particular the expression ‘in addition to the transaction referred to in paragraph 1’, that paragraph 2 refers to other transactions that are also regarded as a ‘supply of goods’. It follows that, while grouping them under the same concept of a ‘supply of goods’, the EU legislature intended to distinguish the transaction referred to in Article 14(2)(a) of the VAT Directive from that referred to in Article 14(1) of that directive, as those two transactions are not defined in the same terms. In particular, the definition of the transaction that is the subject of Article 14(2)(a) of that directive does not make any reference to the ‘right to dispose of tangible property as owner’, as referred to in Article 14(1) of the same directive.
36


Thus, it follows from the wording and structure of Article 14 of the VAT Directive, as the Advocate General noted in point 47 of his Opinion, that, as against the general definition set out in paragraph 1 thereof, paragraph 2 of that article constitutes a lex specialis, the conditions for the application of which are independent of those in paragraph 1.
37


Thus, in order to qualify as a ‘supply of goods’ within the meaning of Article 14(2)(a) of the VAT Directive, three cumulative conditions must be satisfied. First, there has to be a transfer of a right to ownership. Second, that transfer has to be by order made by, or in the name of, a public authority or in pursuance of the law. Third, there has to be payment of compensation.
40


In that regard, Article 14(2)(a) of the VAT Directive refers not to the transfer of the power to dispose of property as owner, which is the case in paragraph 1 of that article, but, more explicitly, to the transfer of ownership of that property (see, with regard to Article 14(2)(b), judgment of 4 October 2017, Mercedes-Benz Financial Services UK, C‑164/16, EU:C:2017:734, paragraph 31).
43


With regard to the consideration for the relevant transaction, it follows from the settled case-law of the Court that the fact that a supply of goods is made ‘for consideration’, within the meaning of Article 2(1)(a) of the VAT Directive, presupposes the existence of a direct link between the goods supplied and the consideration received (see, to that effect, judgment of 7 October 2010, Loyalty Management UKand Baxi Group, C‑53/09 and C‑55/09, EU:C:2010:590, paragraph 51 and the case-law cited). Such a direct link exists only if there is a legal relationship between the supplier and the purchaser entailing reciprocal performance, the price received by the supplier constituting the value actually given in return for the goods supplied (see, to that effect, judgment of 11 May 2017, Posnania Investment, C‑36/16, EU:C:2017:361, paragraph 31 and the case-law cited). Further, that consideration must have a subjective value that is actually received and is capable of being expressed in monetary terms (see, to that effect, judgments of 19 December 2012, Orfey, C‑549/11, EU:C:2012:832, paragraphs 44 and 45 and the case-law cited, and of 7 November 2013, Tulică and Plavoşin, C‑249/12 and C‑250/12, EU:C:2013:722, paragraph 33 and the case-law cited).
44


However, as the Advocate General noted, in essence, in point 61 of his Opinion, it is irrelevant whether, in order for there to be a ‘payment of compensation’ within the meaning of Article 14(2)(a) of the VAT Directive, it is necessary that such a payment have all the constitutive elements of the concept of ‘consideration’ referred to in Article 2(1)(a) of that directive, due to the first of those provisions being a lex specialis, as follows from paragraph 36 of this judgment. Those constitutive elements have been identified by the Court not in the context of the interpretation of Article 14(2)(a) of the VAT Directive, but in that of Article 2(1) of that directive.
45


It follows from the order for reference that the compensation at issue in the main proceedings is directly linked to the transfer of the ownership of the immovable property from the Municipality to the Public Treasury. In that respect, provided that the payment of that compensation has become effective, which is a matter for the referring court to verify, it is irrelevant that that payment was made by way of an internal accounting transfer within a single budget.
47


Second, the Municipality’s status as taxable person for VAT purposes is not called into question by the referring court. Pursuant to Article 9(1) of the VAT Directive, ‘taxable person’ means any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis is in particular to be regarded as an ‘economic activity’.