H. J. Glawe Spiel- und Unterhaltungsgeräte Aufstellungsgesellschaft mbH & Co. KG v Finanzamt Hamburg-Barmbek-Uhlenhorst.
Date: 1994-05-05
5 Glawe believed that the Finanzamt should have taken as the taxable amount only the stakes actually remaining in the cash boxes of the machines, that is to say, the sums inserted, less both VAT and the winnings paid out to players. It therefore entered an objection against the Finanzamt' s notice of assessment. When that objection was dismissed, Glawe brought an action before the Finanzgericht Hamburg, which has referred the following questions to the Court for a preliminary ruling:
"1. In the case of gaming machines offering the possibility of winning, is the taxable amount for the purposes of Article 11 A(1)(a) of the Sixth Directive the total stakes inserted without deduction of the winnings automatically paid out to players?
2. If the winnings paid out must be deducted:
Does the principle of individual taxation require that winnings should be deducted only to the extent of the individual stake for a game or a series of games?
3. If Question 1 is answered in the negative:
Do the winnings automatically paid out constitute wholly or partly - to the extent of the individual stake for a game or series of games - rebates for the purposes of Article 11 A(3)(b) of the Sixth Directive?"
8 In its judgment in Case C-126/88 Boots v Commissioners of Customs and Excise [1990] ECR I-1235, at paragraph 19, the Court held that that latter provision is merely an application of the rule laid down in Article 11 A(1)(a) of the Sixth Directive, as interpreted, in particular, in the judgment in Case 230/87 Naturally Yours Cosmetics v Commissioners of Customs and Excise [1988] ECR 6365, at paragraph 16, according to which the taxable amount is the consideration actually received.
9 In the case of gaming machines such as those concerned in the main proceedings, which, pursuant to mandatory statutory requirements, are set in such a way that they pay out as winnings on average at least 60% of the stakes inserted, the consideration actually received by the operator in return for making the machines available consists only of the proportion of the stakes which he can actually take for himself.
12 Since the proportion of the stakes which is paid out as winnings is mandatorily fixed in advance, it cannot be regarded as forming part of the consideration for the provision of the machine to the players, nor as the price for any other service provided to the players, such as giving them the opportunity of winning or the payment of winnings itself.
13 The answer to the first question in the reference should therefore be that Article 11 A(1)(a) of the Sixth Directive must be interpreted as meaning that, in the case of gaming machines offering the possibility of winning, the taxable amount does not include the statutorily prescribed proportion of the total stakes inserted which corresponds to the winnings paid out to the players.
14 It follows from that answer that there is no need to reply to the second and third questions submitted for a preliminary ruling, which are based on the assumption that the proportion of the stakes which corresponds to the winnings paid out forms part of the consideration for the service provided and must be included in the taxable amount.