Macdonald Resorts Ltd v The Commissioners for Her Majesty’s Revenue & Customs.
Date: 2010-12-16
16. It should be recalled that, under Article 2(1) of the Sixth Directive, ‘the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such’ is to be subject to VAT. In that regard, the Court has already held that a supply of services is effected ‘for consideration’, within the meaning of that provision, 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 (Case C-16/93 Tolsma  [1994] ECR I-743, paragraph 14; Case C-172/96 First National Bank of Chicago  [1998] ECR I-4387, paragraph 26; and Case C‑174/00 Kennemer Golf  [2002] ECR I-3293, paragraph 39).
22. However, that distinction does not prevent the same criterion from being used for its assessment, namely the members’ ultimate intention when they pay for the services received ( RCI Europe , paragraph 29).
26. According to the case-law of the Court, the basis of assessment for a supply of services is everything which makes up the consideration for the service supplied and a supply of services is taxable only if there is a direct link between the service supplied and the consideration received by the supplier (see, to that effect, Case 102/86 Apple and Pear Development Council  [1988] ECR 1443, paragraphs 11 and 12, and Tolsma , paragraph 14).
31. As follows from the judgment in Case C-419/02 BUPA Hospitals and Goldsborough Developments  [2006] ECR I-1685, in order for VAT to be chargeable, all the relevant information concerning the chargeable event, namely the future delivery of goods or future performance of services, must already be known and therefore, in particular, the goods or services must be precisely identified. Therefore, payments on account of supplies of goods or services that have not yet been clearly identified cannot be subject to VAT ( BUPA Hospitals and Goldsborough Developments , paragraph 50).
40. It should be added that the Member States are not powerless if the taxable person fails to cooperate. The principle of a common system of VAT does not preclude the introduction of measures penalising irregularities committed when declarations are made as to the amount of VAT due. On the contrary, Article 22(8) of the Sixth Directive provides that Member States may impose other obligations which they deem necessary for the correct levying and collection of the tax (Case C‑502/07 K-1 [2009] ECR I-161, paragraph 20).
45. As a preliminary point, it should be noted that 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, inter alia, Case C-472/03 Arthur Andersen [2005] ECR I‑1719, paragraph 24; Case C‑415/04 Stichting Kinderopvang Enschede [2006] ECR I‑1385, paragraph 13; and Case C‑89/05 United Utilities  [2006] ECR I-6813, paragraph 21).
46. According to settled case-law, the fundamental characteristic of the concept of ‘letting of immovable property’ for the purposes of Article 13B(b) of the Sixth Directive lies in conferring on the other party to the contract, for an agreed period and for payment, the right to occupy property as if that person were the owner and to exclude any other person from enjoyment of such a right (see, to that effect, Case C-326/99 ‘Goed Wonen’ [2001] ECR I-6831, paragraph 55; Case C‑108/99 Cantor Fitzgerald International [2001] ECR I-7257, paragraph 21; and Case C‑275/01 Si nclair Collins  [2003] ECR I-5965, paragraph 25). In order to determine whether a contract falls within that definition, account should be taken of all the characteristics of the transaction and the circumstances in which it takes place. The decisive factor in this regard is the objective character of the transaction at issue, irrespective of how that transaction is classified by the parties (see, to that effect, Cantor Fitzgerald International , paragraph 33).
50. As the Court stated in Case C-346/95 Blasi  [1998] ECR I-481, paragraphs 20 to 22, the words ‘sectors with a similar function’ should be given a broad construction, since their purpose is to ensure that the provision of temporary accommodation similar to, and hence in potential competition with, that provided in the hotel sector is subject to tax. In defining the classes of provision of accommodation which are to be taxed by derogation from the exemption for the leasing or letting of immovable property, in accordance with Article 13B(b)(1) of the Sixth Directive, the Member States enjoy a margin of discretion. It is consequently a matter for the Member States, when transposing that provision, to introduce those criteria which seem to them appropriate in order to draw the distinction between taxable transactions and those which are not, that is the leasing and letting of immovable property.