Gmina Wrocław v Dyrektor Krajowej Informacji Skarbowej.
Date: 2021-02-25
That decision was based on the fact that the reasons relied on by the referring court were not such as to demonstrate that the conditions laid down in Article 105(1) of the Rules of Procedure were satisfied in the present case (see, by analogy, judgment of 16 July 2020, Addis, C‑517/17, EU:C:2020:579, paragraph 42).
In addition, the large number of cases whose proceedings have been suspended pending the Court’s decision on the present reference for a preliminary ruling is not capable, as such, of constituting an exceptional circumstance that could justify the application of an expedited procedure (see, to that effect, orders of the  President of the Court of 8 March 2012, P,  C‑6/12, not published, EU:C:2012:135, paragraph 8; of 31 March 2014, Indėlių ir investicijų draudimas and Nemaniūnas, C‑671/13, not published, EU:C:2014:225, paragraph 10;  and of 28 November 2017, Di Girolamo, C‑472/17, not published, EU:C:2017:932, paragraph 15).
It should be noted at the outset that the VAT Directive establishes a common system of VAT based on, inter alia, a uniform definition of taxable transactions (judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 30 and the case-law cited).
In that regard, according to settled case-law, the concept of ‘supply of goods’ referred to in Article 14(1) of the VAT Directive does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law, but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner (judgment of 15 May 2019, Vega International Car Transport and Logistic, C‑235/18, EU:C:2019:412, paragraph 27 and the case-law cited).
Therefore, while Article 14(1) of the VAT Directive defines generally the concept of ‘supply of goods’,  it can be concluded from a literal interpretation of paragraph 2 of that article, in particular the expression ‘in addition to the transaction referred to in paragraph 1’, that paragraph 2 refers to other transactions which, while being classified as ‘supplies of goods’, have characteristics different from those referred to in Article 14(1) of that directive. In particular, the definition of the transactions that are 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 (see, to that effect, judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 35). On the other hand, Article 14(2)(a) of the VAT Directive refers explicitly to the transfer of ownership of that property (see, to that effect, judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 40).
It therefore follows from the wording and structure of Article 14 of the VAT Directive 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  thereof (see, to that effect,  judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 36).
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 (judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 37).
In that regard, it is clear from the Court’s case-law that, in order for there to be a ‘payment of compensation’ for the purposes of Article 14(2)(a) of the VAT Directive, it is irrelevant, having regard to the  lex specialis  nature of that provision, that such a payment has all the constitutive elements of the concept of supply of goods for ‘consideration’ referred to in Article 2(1)(a) of that directive  (see, to that effect, judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 44).
In the third place, it is clear from the case-law of the Court that, in order to determine whether the condition relating to the payment of compensation is satisfied, it is necessary only to establish that  the compensation at issue is directly linked to the transfer of ownership and that its payment has become effective, which it is for the national court to determine (see, to that effect, judgment of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 45).
The application of Article 13(1) of the VAT Directive requires a prior finding that the activity in question is economic in nature. If the existence of an economic activity within the meaning of the second subparagraph of Article 9(1) of that directive is established, then the applicability of the exception concerning bodies governed by public law provided for in the first subparagraph of Article 13(1) of that directive must be examined (see, by analogy, judgments of 29 September 2015, Gmina Wrocław, C‑276/14, EU:C:2015:635, paragraph 30; of 29 October 2015, Saudaçor, C‑174/14, EU:C:2015:733, paragraph 31; and of 13 June 2018, Gmina Wrocław, C‑665/16, EU:C:2018:431, paragraph 47).
As regards the concept of ‘exploitation’ for the purposes of the second subparagraph of Article 9(1) of the VAT Directive, it is clear  from the case-law of the Court that, in accordance with the requirements of the principle of neutrality of the common system of value added tax, that concept refers to all transactions, whatever may be their legal form, by which it is sought to obtain income from the goods in question on a continuing basis  (judgments of 6 October 2009, SPÖ Landesorganisation Kärnten, C‑267/08, EU:C:2009:619, paragraph 20  and the case-law cited, and of 2 June 2016, Lajvér, C‑263/15, EU:C:2016:392, paragraph 24  and the case-law cited).
Whilst demonstrating that the scope of the concept of ‘economic activity’ is very wide, the analysis of the wording of Article 9(1) of the VAT Directive also clarifies the objective character of that concept, in the sense that the activity is considered per se and without regard to its purpose or results (see, to that effect, judgment of 13 June 2019, IO (VAT – Activities of a member of a supervisory board), C‑420/18, EU:C:2019:490, paragraph 31 and the case-law cited).
It cannot be inferred from the Court’s case-law that the fact of taking active steps to market property is a necessary condition for an activity relating to property asset management to be regarded as being carried out for the purpose of obtaining income therefrom on a continuing basis and therefore to be classified as ‘economic’ (see, to that effect, judgment of 13 June 2019, IO (VAT – Activities of a member of a supervisory board), C‑420/18, EU:C:2019:490, paragraph 29 and the case-law cited).
With regard to the question whether, in a case such as that in the main proceedings, the Municipality of Wrocław is to be regarded as a taxable person acting as such within the meaning of Article 9(1) of the VAT Directive, or as a public authority for the purposes of the first subparagraph of Article 13(1) of that directive, it should be borne in mind, as a preliminary point, that,  in derogation from the general rule on treatment as taxable persons laid down in Article 9(1) of that directive, Article 13(1) of that directive excludes local government authorities from the capacity as a taxable person in respect of activities or economic transactions in which they engage as a public authority, unless their treatment as non-taxable persons leads to significant distortions of competition (judgment of 29 September 2015, Gmina Wrocław, C‑276/14, EU:C:2015:635, paragraph 29  and the case-law cited).
The Court has also made it clear that the subject matter or purpose of the activity in question is in that regard irrelevant and that the fact that the pursuit of that activity involves the use of powers conferred by public law shows that that activity is subject to a public law regime (judgment of 29 October 2015, Saudaçor, C‑174/14, EU:C:2015:733, paragraph 70 and the case-law cited).