Levob Verzekeringen BV and OV Bank NV v Staatssecretaris van Financiën.
Date: 2005-10-27
18. As a preliminary point, it must be borne in mind that the question of the extent of a transaction is of particular importance, for VAT purposes, both for identifying the place where the taxable transactions take place and for applying the rate of tax or, where appropriate, the exemption provisions in the Sixth Directive (Case C‑349/96 CPP  [1999] ECR I‑973, paragraph 27).
19. According to the Court’s case-law, where a transaction comprises a bundle of features and acts, regard must be had to all the circumstances in which the transaction in question takes place in order to determine, firstly, if there were two or more distinct supplies or one single supply and, secondly, whether, in the latter case, that single supply is to be regarded as a supply of services (see, to that effect, Case C‑231/94 Faaborg‑Gelting Linien  [1996] ECR I‑2395, paragraphs 12 to 14, and CPP , paragraphs 28 and 29).
20. Taking into account, firstly, that it follows from Article 2(1) of the Sixth Directive that every transaction must normally be regarded as distinct and independent and, secondly, that a transaction which comprises a single supply from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system, the essential features of the transaction must in the first place be ascertained in order to determine whether the taxable person is making to the customer, being a typical consumer, several distinct principal supplies or a single supply (see, by analogy, CPP , paragraph 29).
21. In that regard, the Court has held that there is a single supply in particular in cases where one or more elements are to be regarded as constituting the principal supply, whilst one or more elements are to be regarded, by contrast, as ancillary supplies which share the tax treatment of the principal supply ( CPP , cited above, paragraph 30, and Case C‑34/99 Primback  [2001] ECR I‑3833, paragraph 45).
22. The same is true where two or more elements or acts supplied by the taxable person to the customer, being a typical consumer, are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split.
23. In the context of the cooperation required by Article 234 EC, it is indeed for the national courts to determine whether such is the situation in a particular case and to make all definitive findings of fact in that regard.  Nevertheless, it is for the Court to provide the national courts with all the guidance as to the interpretation of Community law which may be of assistance in adjudicating on the case pending before them.
24. With regard to the dispute in the main proceedings, it is apparent, as held by the Gerechtshof te Amsterdam whose decision was the subject of the appeal in cassation pending before the referring court, that the economic purpose of a transaction such as that which took place between FDP and Levob is the supply, by a taxable person to a consumer, of functional software specifically customised to that consumer’s requirements.  In that regard, and as the Netherlands Government has correctly pointed out, it is not possible, without entering the realms of the artificial, to take the view that such a consumer has purchased, from the same supplier, first, pre-existing software which, as it stood, was nevertheless of no use for the purposes of its economic activity, and only subsequently the customisation, which alone made that software useful to it.
25. The fact, highlighted in the question, that separate prices were contractually stipulated for the supply of the basic software, on the one hand, and for its customisation, on the other, is not of itself decisive.  Such a fact cannot affect the objective close link which has just been shown with regard to that supply and that customisation nor the fact that they form part of a single economic transaction (see, to that effect, CPP , paragraph 31).
27. Secondly, with regard to the question whether such a single complex supply is to be classified as a supply of services, it is vital to identify the predominant elements of that supply (see, inter alia, Faaborg‑Gelting Linien , paragraph 14).
28. Apart from the importance of the customisation of the basic software to make it useful for the professional activities of the purchaser, the extent, duration and cost of that customisation are also relevant elements in that regard.
29. On the basis of these different criteria, the Gerechtshof te Amsterdam correctly concluded that there was a single supply of services within the meaning of Article 6(1) of the Sixth Directive, since those criteria in fact lead to the conclusion that, far from being minor or ancillary, such customisation predominates because of its decisive importance in enabling the purchaser to use the software customised to its specific requirements which it is purchasing.
32. In that regard, Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for tax purposes.  Whereas Article 9(1) lays down a general rule on the matter, Article 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied.  The object of those provisions is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non-taxation (see inter alia Case C‑452/03 RAL (Channel Islands) and Others  [2005] ECR I‑0000, paragraph 23 and case‑law cited).
33. In respect of the relationship between the first two paragraphs of Article 9 of the Sixth Directive, the Court has already held that Article 9(1) in no way takes precedence over Article 9(2).  In every situation, the question which arises is whether it is covered by one of the instances mentioned in Article 9(2); if not, it falls within the scope of Article 9(1) ( RAL (Channel Islands) and Others , paragraph 24 and case-law cited).
34. To that extent, the argument that Article 9(2)(e) of the Sixth Directive should, as an exception to a rule, be narrowly construed must be rejected (Case C­108/00 SPI  [2001] ECR I‑2361, paragraph 17).
37. It is apparent from the Court’s case-law that Article 9(2)(e), third indent, of the Sixth Directive does not refer to professions, such as those of lawyers, consultants, accountants or engineers, but to the services supplied by those professionals and similar services.  The Community legislature has used the professions mentioned in that provision as a means of defining the categories of services to which it refers (Case C­‑145/96 von Hoffmann  [1997] ECR I‑4857, paragraph 15).