On December 13, 2007, the ECJ issued its decision in the case C-408/06 (Götz).
Context: Sixth VAT Directive – Economic activity – Taxable persons – Bodies governed by public law – Milk-quota sales point – Transactions of agricultural intervention agencies and staff shops – Significant distortions of competition – Geographic market
Article in the EU VAT Directive
Article 4(5) of the Sixth VAT Directive (Article 13 of the EU VAT Directive 2006/112/EC).
Article 13 (Taxable persons)
1. States, regional and local government authorities and other bodies governed by public law shall not be regarded as taxable persons in respect of the activities or transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with those activities or transactions.
However, when they engage in such activities or transactions, they shall be regarded as taxable persons in respect of those activities or transactions where their treatment as non-taxable persons would lead to significant distortions of competition.
In any event, bodies governed by public law shall be regarded as taxable persons in respect of the activities listed in Annex I, provided that those activities are not carried out on such a small scale as to be negligible.
2. Member States may regard activities, exempt under Articles 132, 135, 136 and 371, Articles 374 to 377, Article 378(2), Article 379(2) or Articles 380 to 390b, engaged in by bodies governed by public law as activities in which those bodies engage as public authorities.
Facts
- The dispute in the main proceedings is between a Bavarian farmer, Mr Götz, and the Landesanstalt. With the aim of reducing surpluses of cow’s milk, the Landesanstalt centralised the applications of different producers in order to establish those who wanted to sell delivery reference quantities and those who wanted to buy them. That policy was based on Regulation No 3950/92, which established an additional levy to be paid by producers who delivered quantities of milk exceeding a given threshold.
- The process put in place by the Landesanstalt in 2001 was as follows. On set dates the ‘supplier’ producers submitted to the milk-quota sales point written offers to transfer delivery reference quantities, stating their price. On those same dates, the ‘demand-customer’ producers followed a symmetrical process, submitting a written offer to purchase a specific delivery reference quantity at a price of their choice. The milk-quota sales point was responsible for, first of all, comparing the offers and the applications and determining a mean price, which would make it possible for the prices of both parties to overlap approximately. Where necessary, all the amounts were reduced. Subsequently, the milk-quota sales point allocated 5% of the delivery reference quantities offered to the national reserve, then, in accordance with the procedure explained in detail by the national court, from which it is apparent inter alia that cash transfers were made to the milk-quota sales point itself, it reallocated and made payments in respect of the remaining delivery reference quantities.
- In 2001, Mr Götz, a milk producer and the owner of a farming business in Bavaria, wished to purchase a delivery reference quantity of 16 500 kg at a maximum price of DM 2/kg. The Landesanstalt informed Mr Götz, on 3 April 2001, that his purchase offer had been successful with effect from 1 April 2001 as the mean price was DM 1.58/kg. It issued an invoice, which did not show the VAT separately, in the name of Mr Götz. Mr Götz, whose activities were taxed under the UStG, lodged an administrative objection with the Landesanstalt by which he sought to have an invoice issued on which that tax appeared separately. The Landesanstalt dismissed that objection by decision of 29 August 2001 on the grounds of its status as a public authority and its role as a mere intermediary.
Questions
1. Is a “Milchquoten-Verkaufsstelle” (milk-quota sales point) set up by a German Land which transfers delivery reference quantities to milk producers for consideration:
(a) an agricultural intervention agency within the meaning of the third subparagraph of Article 4(5) of and Annex D(7) to [the Sixth Directive] which carries out transactions in respect of agricultural products pursuant to regulations on the common organisation of the market in those products, or
(b) a Verkaufsstelle (staff shop) within the meaning of the third subparagraph of Article 4(5) of and Annex D(12) to the Sixth Directive?
2. If Question 1 is to be answered in the negative:
(a) In circumstances such as those in the main proceedings, where in a Member State both public and private milk-quota sales points transfer delivery reference quantities for consideration, is it the case that when assessing whether the treatment of a Milchquoten-Verkaufsstelle of a body governed by public law as a non-taxable person would lead to “significant distortions of competition” within the meaning of the second subparagraph of Article 4(5) of the Sixth Directive the relevant geographic market is the transfer area defined by the Member State?
(b) When assessing whether the treatment of a public Milchquoten-Verkaufsstelle as a non-taxable person would lead to such “significant distortions of competition” is only the normal case of transfers independently of the land (by a Verkaufsstelle) to be taken into consideration, or are other types of transfers independently of the land (by farmers as taxable persons) also to be included even though they are only exceptional cases?
AG Opinion
None
Decision
1. A milk-quota sales point is neither an agricultural intervention agency within the meaning of the third subparagraph of Article 4(5) 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 2001/4/EC of 19 January 2001, read in conjunction with point 7 of Annex D thereto, nor a staff shop within the meaning of the third subparagraph of Article 4(5) of that directive, read in conjunction with point 12 of Annex D thereto.
2. The treatment of a milk-quota sales point as a non-taxable person in respect of activities or transactions in which it engages as a public authority, within the meaning of Article 4(5) of the Sixth Directive, as amended by Directive 2001/4/EC, cannot give rise to significant distortions of competition, by reason of the fact that it is not faced, in a situation such as that at issue in the main proceedings, with private operators providing services which are in competition with the public services. As that finding applies in respect of all milk-quota sales points operating within a given delivery reference quantity transfer area, defined by the Member State concerned, that area constitutes the relevant geographic market for the purpose of establishing whether there are significant distortions of competition.
Personal comments/VATupdate
Source: Curia
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