In both cases the Courts noted that the municipalities bear only risks of loss, without any prospect of profit. The Courts were therefore of the view that both municipalities were not carrying out an activity of an economic nature within the meaning of the second paragraph of Article 9(1).
The absence of liability to tax arising from the performance of transactions by a body governed by public law acting as a public authority – Given the Court concluded that such activities did not fall within the scope of the VAT Directive it considered that it was not necessary to determine whether that activity would also have been excluded from that scope under Article 13(1).
Source KPMG
See also
- C-612/21 Gmina O. (Municipality of O.) – A municipality is not a taxable person due to a project to increase the proportion of renewable energy sources
- C-616/21 Gmina L. (Municipality of L.) – A municipality is not a taxable person for contracting out removal of asbestos
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- For an overview of ECJ cases per article of the EU VAT Directive, click HERE
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