Stichting Regionaal Opleidingen Centrum Noord-Kennemerland/West-Friesland (Horizon College) v Staatssecretaris van Financiën.
Date: 2007-06-14
14. As a preliminary point, it should be noted that Article 13A of the Sixth Directive relates to the exemption from VAT of certain activities in the public interest. However, that exemption does not cover every activity performed in the public interest, but only those which are listed in that provision and described in great detail (see Case C‑149/97 Institute of the Motor Industry [1998] ECR I‑7053, paragraph 18; Joined Cases C‑394/04 and C‑395/04 Ygeia  [2005] ECR I‑10373, paragraph 16; and Case C‑401/05 VDP Dental Laboratory [2006] ECR I‑0000, paragraph 24).
15. According to the case-law of the Court, the exemptions provided for in Article 13 of the Sixth Directive 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 Case C‑349/96 CPP  [1999] ECR I‑973, paragraph 15; Case C‑240/99 Skandia  [2001] ECR I‑1951, paragraph 23; and Ygeia , paragraph 15).
16. The terms used to specify those exemptions 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 Case C‑287/00 Commission  v Germany  [2002] ECR I‑5811, paragraph 43, and Case C‑8/01 Taksatorringen  [2003] ECR I‑13711, paragraph 36). Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT (see Case C‑45/01 Dornier  [2003] ECR I‑12911, paragraph 42; Case C‑498/03 Kingscrest Associates and Montecello  [2005] ECR I‑4427, paragraph 29; and Case C‑106/05 L.u.P . [2006] ECR I‑5123, paragraph 24). Thus, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 13 should be construed in such a way as to deprive the exemptions of their intended effect (see, to that effect, Case C‑284/03 Temco Europe [2004] ECR I‑11237, paragraph 17, and also, in relation to university education, Commission  v Germany , paragraph 47).
18. Admittedly, as Horizon College essentially submits, the transfer of knowledge and skills between a teacher and students is a particularly important element of educational activity.
19. However, in view of the requirements of the case-law referred to in paragraphs 14 to 16 of this judgment, the fact that such a transfer is taking place is not, by itself, sufficient for the mere supply of a teacher to an educational establishment, for the purpose of carrying out teaching duties under the responsibility of that establishment, to be described as educational activity.
20. Indeed, as the Commission submitted, in essence, at the hearing, the educational activity referred to in Article 13A(1)(i) of the Sixth Directive consists of a combination of elements which include, along with those relating to the teacher/student relationship, also those which make up the organisational framework of the establishment concerned.
27. There is no definition in Article 13A(1)(i) of the Sixth Directive of the supply of services ‘closely related’ to education (see, as regards university education, Commission  v Germany , paragraph 46). Nevertheless, it is clear from the actual wording of the provision that it does not cover the supply of goods or services which are unrelated to ‘children’s or young people’s education, school or university education, vocational training or retraining’.
28. The supply of goods or services can be regarded as ‘closely related’ to education, and thus subject to the same tax treatment under Article 13A(1)(i) of the Sixth Directive, only where they are actually supplied as services ancillary to the education which constitutes the principal service (see, by analogy, Case C‑76/99 Commission  v France  [2001] ECR I‑249, paragraphs 27 to 30; Dornier , paragraphs 34 and 35; and also Ygeia , paragraphs 17 and 18).
29. It follows from the case-law of the Court that a service may be regarded as ancillary to a principal service if it does not constitute an end in itself, but a means of better enjoying the principal service (see, to that effect, in particular, Joined Cases C‑308/96 and C‑94/97 Madgett and Baldwin  [1998] ECR I‑6229, paragraph 24; CPP , paragraph 30; Dornier , paragraph 34; and Ygeia , paragraph 19).
34. First, both the principal activity of education and the supply of goods or services which are closely related to that activity must be provided by one of the bodies referred to in Article 13A(1)(i) of the Sixth Directive.
36. Moreover, it is clear from the first indent of Article 13A(2)(b) of the Sixth Directive that, in order for a supply of services or goods not to be precluded from being granted exemption as provided for, inter alia, in Article 13A(1)(i), the main transaction, to which that supply is closely linked, must itself also be an exempted transaction (see Case C‑415/04 Stichting Kinderopvang Enschede  [2006] ECR I‑1385, paragraph 22).
38. Second, as is also clear from the first indent of Article 13A(2)(b) of the Sixth Directive, the supply of services or goods which are closely related to the main transactions referred to, inter alia, in Article 13A(1)(i) may be granted exemption only if they are essential to the transactions exempted (see also, to that effect, Commission  v Germany , paragraph 48; Ygeia , paragraph 26; and Stichting Kinderopvang Enschede , paragraph 25).
39. In order to be described in those terms, the temporary supply of teachers, such as that at issue in the main proceedings, should be of a nature and quality such that, without recourse to such a service, there could be no assurance that the education provided by the host establishments and, consequently, the education from which their students benefit, would have an equivalent value (see, by analogy, Stichting Kinderopvang Enschede , paragraphs 27, 28 and 30).
40. In that regard, it should be observed, as the Netherlands Government has done, that there may well be commercial placement agencies whose services are not exempt and whose activities include the supply of teaching staff to schools or universities. In the main proceedings, for the supply of teachers by Horizon College to be regarded as essential to the education provided by the host establishments, it would have to be of a nature such that – owing, for example, to the qualifications of the staff in question or the flexibility of the terms of their supply – the same level and quality of teaching could not be assured simply by turning to such placement agencies.
41. It falls to the referring court, taking into account all of the specific facts of the dispute before it, to determine the essential character of the services supplied by Horizon College.
42. Third, according to the second indent of Article 13A(2)(b) of the Sixth Directive, the supply of services or goods is not to be granted exemption as provided for in Article 13A(1)(i) if its basic purpose is to obtain additional income for the organisation by carrying out transactions which are in direct competition with those of commercial enterprises liable for VAT.
43. That exclusion is a specific expression of the principle of fiscal neutrality, which precludes, in particular, treating similar supplies of services, which are thus in competition with each other, differently for VAT purposes (see Case C‑109/02 Commission  v Germany  [2003] ECR I‑12691, paragraph 20, and Ygeia , paragraph 32).
45. Finally, it should be noted that Article 13A(2)(a) of the Sixth Directive gives Member States the power to make the granting to bodies other than those governed by public law of the exemption provided for in, inter alia, Article 13A(1)(i) subject to one or more of the conditions set out in Article 13A(2)(a). It is for the referring court to verify whether such a power has been implemented in the Netherlands and, if so, whether such conditions are applicable in the main proceedings.