Flashback on ECJ cases C-231/94 (Faaborg-Gelting-Linien A/S): Restaurant transactions on board ship – Place of taxable transactions.

On May 2, 1986, the ECJ issues his decision on C-231/94 (Faaborg-Gelting-Linien A/S) related to the place of supply of restaurant services on board of ship. The case also dealt with the question of the existence of a Fixed Establishment

Article in the EU VAT Directive

Article 5(1) , 6, 8 and 9(1) of the Sixth VAT Directive

Facts

The Danish ferry operator Faaborg-Gelting-Linien A/S offers on its scheduled services between the ports of Faaborg in Denmark and Gelting in Germany meals for consumption. Faaborg-Gelting-Linien A/S did not charge German VAT on these meals, as it was of the opinion that its services are taxed where it is established, i.e. Denmark.
At dispute was whether the catering operations were the delivery of goods then had to be regarded as the provision of a service. If the restaurant operation had to be qualified as a service, was the the question of where this service was taxed.
The Court holds that restaurant services must be regarded as a service, and that, in accordance with Article 9(1) of the Sixth Directive, the service is must be deemed to have been provided at the place where the provider of the services has established his place of business.
The Court refers to its previous judgment in Günter-Berkholz and paragraphs 17 and 18 and finds that the fixed place of business of the ship’s operator a usable connecting point for taxation.
In that judgment, the Court confirms that, for the purposes of determining the place of supply of services the seat of operations is and can be the preferred place of business considered another establishment of the service provider as the place of to designate a service if that device has a certain degree of resistance by having at its disposal, on a permanent basis, the human and technical resources which are are necessary for certain services.

Questions

1. What rules does the Sixth Directive 77/388/EEC contain for the taxation of transactions for the supply of foods for consumption on the spot (restaurant transactions)?
2. If there are no such rules, what rules of Community law apply to restaurant transactions on board means of transport plying between Member States with differing national rules on the place of taxation of such transactions?
3. If there are no such rules of Community law, can individual Member States maintain their differing rules on restaurant transactions or on the place of supply of such transactions, if those Member States by agreement avoid double taxation of the transactions in the individual case?

AG Opinion

The supply of food and drink to be consumed on the spot on board a ferry plying between two Member States, accompanied by restaurant services, constitutes a supply of services within the meaning of Article 6(1) and Article 9(1) of the Sixth Directive. The supply of such services is taxable in the Member State in which the provider of the services has established his business.

Decision

Restaurant transactions are to be regarded as supplies of services within the meaning of Article 6(1) of the Sixth Directive, which, under Article 9(1) of the directive, are deemed to be carried out at the place where the supplier has established his business.

Personal comments/VATupdate

The Court confirms that, for the purposes of determining the place of supply of services, the seat of operations is and can be the preferred place of business considered another establishment of the service provider as the place of to designate a service if that device has a certain degree of resistance by having at its disposal, on a permanent basis, the human and technical resources which are are necessary for certain services.

Source: Curia

Similar ECJ cases