Flashback on ECJ cases C-428/02 (Fonden Marselisborg Lystbådehavn) – The concept of rental of immovable property also includes the rental of berths for mooring boats in the water

On March 3, 2005, the ECJ issued its decision in the case C-428/02 (Fonden Marselisborg Lystbådehavn).

Context: Sixth VAT Directive – Article 13B(b) – Exemptions – Leasing of immovable property – Letting of premises and sites for parking vehicles – Mooring berths for boats – Land storage sites for boats.

Article in the EU VAT Directive

Articles 13(B)(b) of the Sixth VAT Directive (Article 135(1)(l) and 135(2) of the EU VAT Directive 2006/112/EC).

Article 135 (Exemptions for other activities)
1. Member States shall exempt the following transactions:
(l) the leasing or letting of immovable property.

2. The following shall be excluded from the exemption provided for in point (l) of paragraph 1:
(a) the provision of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites;
(b) the letting of premises and sites for the parking of vehicles;
(c) the letting of permanently installed equipment and machinery;
(d) the hire of safes.
Member States may apply further exclusions to the scope of the exemption referred to in point (l) of paragraph 1.

Facts

FML is responsible for the management of the pleasure boat port of Marselisborg. That independent institution lets water-based mooring berths and land sites for the winter storage of boats.
Mooring berths may be let on a yearly or monthly basis or for a shorter period of one to several days.
Where a mooring berth is let on an annual basis the lessee acquires the right to use a specific and identifiable mooring berth and is entitled to use the common facilities at the port, such as toilets and washing facilities. The mooring berths are adjusted to fit the size of the boats. Each one is individually numbered and is marked with fencing, y-beams or pontoon bridging with y-beams. If the lessee of a berth does not wish to use it for a period exceeding 24 hours, it is made available to visitors without reimbursement.
Long-term lessees of mooring berths with a right to a land site must pay an annual site fee and must lodge a deposit which is calculated, inter alia, according to the size of the boat. On the other hand, no deposit is required for letting a mooring berth without a right to a land site. However, the annual rent is higher in this case.
Where a mooring berth is let on a monthly basis a monthly hire charge is payable but no deposit is required. The lessee is, in principle, guaranteed a specific numbered mooring berth adapted to the size of his boat.
Short-term letting is provided for visitors who receive only mooring berths in the port for one or several days. No deposit is required for this type of letting.
As regards the letting of storage sites, the user is able to acquire the right to use a particular site for the winter storage of his boat. That site consists of a cradle, that is, a structure on which the boat is placed, which is numbered, to which the lessee has free access in order to tend and prepare his boat.
The dispute in the main proceedings results from the fact that, following an inquiry in 1999 by FML to the Regional Tax Authority, Århus (Denmark), the latter took the view that the income from letting mooring berths was subject to VAT. FML contested that decision before the Landsskatteret (Denmark).
In its order of 6 December 2000, the Landsskatteret held that the letting of water-based mooring berths could not benefit from the VAT exemption provided for by Article 13(1), point 8, of the Momsloven, on the ground that that activity could not be regarded as a letting of immovable property. It held that a boat owner does not rent a specific and identifiable area or parts of immovable property but merely acquires a right of use, which consists of having a mooring berth for his boat in the port.
On the other hand, as regards winter storage of boats, the Landsskatteret held that that activity is not subject to VAT because it may be treated as a ‘letting of immovable property’ for the purposes of Article 13(1), point 8, of the Momsloven. It held that a boat owner rents, for a price determined by the surface occupied, a specific and identifiable area to which he has free access during the winter. That letting is not covered by the exemption concerning ‘the letting of premises and sites for parking vehicles’, because boats are not covered by the term ‘vehicles’ within the meaning of Article 13B(b)(2) of the Sixth Directive.

Questions

1. Must Article 13B(b) of the Sixth VAT Directive … be construed as meaning that the term ‘letting of immovable property’ includes the letting of a boat site consisting of a section of a land-based port area and of a defined and identifiable water-based area?

2. Must Article 13B(b)(2) of the Sixth Directive be construed as meaning that the term “vehicles” includes boats?

AG Opinion

(1) The term ‘leasing or letting of immovable property’ within the meaning of Article 13B(b) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment encompasses both the letting of a clearly delimited area of a port basin as a mooring berth for boats and a defined storage site for a boat on land.

(2) Article 13B(b)(2) of the Sixth Directive also applies to the leasing of mooring berths and storage sites for boats.

Decision

1. Article 13B(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 92/111/EEC of 14 December 1992, must be interpreted as meaning that the concept of letting of immovable property includes the letting of both water-based mooring berths for pleasure boats and land sites for storage of boats on port land.

2. Article 13B(b)(2) of Sixth Directive 77/388, as amended by Directive 92/111, must be interpreted as meaning that the definition of ‘vehicles’ includes boats.

Summary

Moorings for boats in water – Storage of boats on shore

The concept of rental of immovable property also includes the rental of berths for mooring boats in the water and of places for garaging these boats on the shore on the port site.

The term ‘vehicles’ also includes boats.

Source