Belgocodex SA v Belgian State.
Date: 1998-12-03
16 As the Court has held previously, Member States may, by virtue of this power, allow persons benefiting from the exemptions provided for by the Directive to waive the exemption in all cases or within certain limits or subject to certain detailed rules (judgment in Case 8/81 Becker [1982] ECR 53, paragraph 38).
17 As the Commission also points out, it follows that the Member States have a wide discretion under Article 13B and C.  It is for them to assess whether they should or should not introduce the right of option, depending on what they consider to be expedient in the situation existing in their country at a given time.  The freedom to grant or decline to grant the right of option is not restricted in time or by the fact that a contrary decision had been adopted in the past.  Member States may therefore, within the sphere of their national powers, also revoke the right of option after having introduced it and return to the basic rule that letting and leasing of immovable property are exempt from tax.
18 Contrary to what the plaintiff in the main proceedings argues, this solution is not called in question by the principle of fiscal neutrality.  Admittedly, this principle, which is laid down in Article 2 of the First Directive and which is inherent in the common system of value added tax, requires, as the fourth and fifth recitals of the Sixth Directive state, that all economic activities should be treated in the same way (judgment in Case C-155/94 Wellcome Trust v Commissioners of Customs & Excise [1996] ECR I-3013, paragraph 38).
21 The Court there held that, if a Member State abolishes an exemption provided for by Article 28 of the Sixth Directive, it may not later reintroduce the exemption. However, that judgment concerned a provision of the Sixth Directive which is not comparable to Article 13C.  Article 28 concerns the transitional period which followed the adoption of the Sixth Directive.  During that period, Member States were allowed to continue to exempt from VAT certain transactions for a given period for the purpose of facilitating the transition and to allow a progressive adaptation of national laws in the areas in question (Case C-35/90 Commission v Spain, cited above, paragraph 9). Once the transitional period was over, the Member States were, however, required to abolish the exemptions completely, which precluded any possibility of restoring an exemption previously abolished.
26 It must be recalled in this regard that the principle of protection of legitimate expectations and the principle of legal certainty form part of the Community legal order and must be observed by the Member States when they exercise the powers conferred on them by Community directives. However, in the specific circumstances of the present case, it is not for this Court but for the national court to determine whether a breach of those principles has been committed by the retroactive repeal of a law in respect of which the implementing decree was never adopted.
27 In view of the foregoing, the answer to the question submitted must be that Article 2 of the First Directive does not preclude a Member State
- which has availed itself of the possibility provided for by Article 13C of the Sixth Directive and
- which has thus granted its taxpayers the right to opt for taxation of certain lettings of immovable property
from abolishing, by means of a subsequent law, that right of option and thus reintroducing the exemption.
It is for the national court to determine whether a breach of the principle of protection of legitimate expectations or of the principle of legal certainty has been committed by the retroactive repeal of a law in respect of which the implementing decree has not been adopted.