Finanzamt Frankfurt am Main V-Höchst v Deutsche Bank AG.
Date: 2012-07-19
18. According to the case-law of the Court, 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, inter alia, whether that transaction consists of two or more distinct supplies or one single supply (see, to that effect, inter alia, Case C-41/04 Levob Verzekeringen and OV Bank  [2005] ECR I-9433, paragraph 19, and Joined Cases C-497/09, C-499/09, C-501/09 and C-502/09 Bog and Others [2011] ECR I-1457, paragraph 52).
19. In that regard, the Court has held that there is a single supply, particularly where one element is to be regarded as constituting the principal service, whilst another is to be regarded as an ancillary service sharing the tax treatment of the principal service (see Case C-34/99 Primback  [2001] ECR I-3833, paragraph 45 and the case-law cited).
21. The Court has held that that is also the case 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 ( Levob Verzekeringen and OV Bank , paragraph 22).
31. As regards the exemption provided for in Article 135(1)(g) of Directive 2006/112, it must be pointed out that the concept of ‘management of special investment funds’ is not defined in Directive 2006/112. The Court has however stated that the transactions covered by that exemption are those which are specific to the business of undertakings for collective investment (Case C-169/04 Abbey National  [2006] ECR I-4027, paragraph 63).
32. In that regard, it is apparent from Article 1(2) of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 1985 L 375, p. 3), as amended by Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 (OJ 2002 L 41, p. 35), that they are undertakings the sole object of which is the collective investment in transferable securities and/or in other liquid financial assets of capital raised from the public, which operate on the principle of risk-spreading and the units of which are, at the request of holders, re-purchased or redeemed, directly or indirectly, out of those undertakings’ assets.
36. As regards the scope of Article 135(1)(f) of that directive, the Court has held that transactions in shares and other securities are transactions on the market in marketable securities and that trade in securities involves acts which alter the legal and financial situation as between the parties (see, to that effect, Case C-2/95 SDC  [1997] ECR I-3017, paragraphs 72 and 73, and Case C-259/11 DTZ Zadelhoff  [2012] ECR, paragraph 22).
37. The words ‘transactions … in … securities’ within the meaning of that provision refer, therefore, to transactions which are liable to create, alter or extinguish parties’ rights and obligations in respect of securities (see, in particular, Case C 235/00 CSC Financial Services  [2001] ECR I-10237, paragraph 33, and DTZ Zadelhoff , paragraph 23).
42. In that regard, it is established case-law that the terms used to specify the exemptions referred to in Article 135(1) of Directive 2006/112 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, inter alia, Case C-8/01 Taksatorringen  [2003] ECR I-13711, paragraph 36, and DTZ Zadelhoff , paragraph 20).
45. Lastly, it must be stated that that conclusion is not called into question by the principle of fiscal neutrality. As the Advocate General stated at point 60 of her Opinion, that principle cannot extend the scope of an exemption in the absence of clear wording to that effect. That principle is not a rule of primary law which can condition the validity of an exemption, but a principle of interpretation, to be applied concurrently with the principle of strict interpretation of exemptions.
51. The German Government, referring to paragraphs 31 and 32 of Case C-242/08 Swiss Re Germany Holding [2009] ECR I-10099, maintains the opposite. According to that Government, the Court stated, in that judgment, that the sound functioning and uniform interpretation of the common system of VAT require that the concepts of ‘insurance transactions’ and ‘reinsurance’ in the provisions of Sixth Directive 77/388 which correspond to Articles 56(1)(e) and 135(1)(a) of Directive 2006/112 are not defined differently depending on whether they are used in one of those provisions or the other. That reasoning should apply by analogy to ‘financial transactions’.
54. Inasmuch as the portfolio management carried out by Deutsche Bank in the main proceedings is a service of a financial nature and Article 56(1)(e) of Directive 2006/112 is not to be interpreted narrowly (see, to that effect, Case C-327/94 Dudda [1996] ECR I-4595, paragraph 21, and Levob Verzekeringen and OV Bank , paragraph 34 and the case-law cited), that activity must be regarded, as a financial transaction, as falling within the scope of Article 56(1)(e) of Directive 2006/112.