Petar Kezić s.p. Trgovina Prizma v Republika Slovenija.
Date: 2015-07-09
18. It is clear from the wording of Article 2(1) of the Sixth Directive that a taxable person must act ‘as such’ for a transaction to be subject to VAT. However, a taxable person carrying out a transaction in a private capacity does not act as a taxable person and such a transaction is not subject to VAT (see, to that effect, judgments in Armbrecht , C-291/92, EU:C:1995:304, paragraphs 16 to 18, and Bakcsi , C-415/98, EU:C:2001:136, paragraph 24).
19. It should also be recalled that, according to the Court’s settled case-law, a ‘taxable person’ is defined by reference to the term ‘economic activity’ which, under Article 4(2) of the Sixth Directive, encompasses 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 (see, to that effect, judgment in Słaby and Others , C-180/10 and C-181/10, EU:C:2011:589, paragraphs 43 and 44).
20. Moreover, where capital goods are used both for business and for private purposes the taxpayer has the choice, for the purposes of VAT, of (i) allocating those goods wholly to the assets of his business, (ii) retaining them wholly within his private assets, thereby excluding them entirely from the system of VAT, or (iii) integrating them into his business only to the extent to which they are actually used for business purposes (judgment in Charles and Charles-Tijmens , C-434/03, EU:C:2005:463, paragraph 23). Thus, such property may be excluded from the VAT system even if it is used partially for the needs of the economic activity of the taxable person, who is then, however, deprived of any right of deduction (judgment in Bakcsi , C-415/98, EU:C:2001:136, paragraph 27).
21. In addition, a taxable person who sells property, part of which he had chosen to reserve for his private use, does not act as a taxable person with respect to the sale of that part (see, to that effect, judgment in Armbrecht , C-291/92, EU:C:1995:304, paragraph 24). The taxable person must, however, throughout his period of ownership of the property in question, demonstrate an intention to retain part of it amongst his private assets (see judgment in Armbrecht , C-291/92, EU:C:1995:304, paragraph 21).
23. In this respect it is true that the mere exercise of the right of ownership by its holder cannot, in itself, be regarded as constituting an economic activity (see, to that effect, judgment in Słaby and Others , C-180/10 and C-181/10, EU:C:2011:589, paragraph 36). Furthermore, from that point of view, the fact that the subject-matter of the sale was acquired by the taxable person using his personal resources cannot have a decisive effect.
24. However, as regards the sale of building land, the Court has already stated that a relevant assessment criterion is the fact that the party has taken active steps to market property by mobilising resources similar to those deployed by producers, traders or persons supplying services within the meaning of Article 4(2) of the Sixth Directive, such as, in particular, the carrying out on that land of preparatory work to make development possible, and the deployment of proven marketing measures (see, to that effect, judgment in Słaby and Others , C‑180/10 and C‑181/10, EU:C:2011:589, paragraphs 39 and 40). Such initiatives do not normally fall within the scope of the management of private assets so that the sale of land designated for development in such a situation cannot be regarded as the mere exercise of the right of ownership by its holder (see, to that effect, judgment in Słaby and Others , C‑180/10 and C‑181/10, EU:C:2011:589, paragraph 41).