4.1. Article 4, paragraph c, of the Implementation Decree on Value Added Tax 1968 (hereinafter referred to as “the Decree”) states that expenses incurred for import duties and other taxes and charges are not included in the compensation, as far as relevant in this case. The second ground of appeal rightly challenges the Court’s interpretation of this provision, which suggests that expenses can only be considered as incurred if the recipient of the service has the authority to pay the tax to the collecting authority.
The Decree was enacted after a consistent jurisprudence had been established by the Tariff Committee regarding Article 5, paragraph 5, of the 1940 Value Added Tax Decree and Article 11, paragraph 4, letter d, of the 1954 Value Added Tax Act – which used the same concepts as later Article 4, paragraph c, of the Decree. The essence of this jurisprudence can be summarized as follows: taxes that are proportionally owed by the service provider and are separately and proportionally charged to the recipient of the service qualify as incurred expenses.
It must be assumed that when the Decree was enacted, there was no intention to interpret the concept of incurred expenses more restrictively than the Tariff Committee had done until then. If the legislator had intended to give a more limited meaning to that concept, considering the aforementioned case law, it should have been expressed in the text of the Decree. Therefore, the limitation adopted by the Court as mentioned above cannot be accepted.
Similarly, the Inspector’s position in his memorandum before the Court, claiming that the relevant provision of the Decree is consistent with paragraph 13, fourth paragraph, of Annex A to the Second Directive of the Council of the European Economic Community of 11 April 1967 on the harmonization of legislation of the Member States regarding value added tax (hereinafter referred to as “the Second Directive”), is incorrect. The wording of Article 4 of the Decree indicates that this provision is not aligned with the aforementioned paragraph 13.
4.2. From the Court’s ruling, it appears that the appellant operates a campground within the municipality of [Z]. The appellant separately charged its guests a tourist tax of 0.25 guilders per person per overnight stay on the invoices, based on the municipality of [Z]’s Regulation on the levy and collection of a tourist tax. Considering the aforementioned regulation and Articles 1, 2, 4, and 5 thereof, in conjunction with the considerations set forth in 4.1 above, it follows that the tourist tax charged by the appellant to its guests should be considered as incurred expenses within the meaning of Article 4, paragraph c, of the Decree.
4.3. The Secretary of State’s memorandum implies the argument that paragraph 13, fourth paragraph, of Annex A to the Second Directive should be understood in such a way that only those taxes paid by customs agents and other intermediaries in their own name upon importation may be excluded from the tax base by the Member States.
Even if this argument were correct, it does not imply that the appellant cannot claim the application of the relevant provision of the Decree. According to the case law of the Court of Justice of the European Communities, as summarized in its judgment of 25 January 1983, case 126/82, Dutch Jurisprudence 1984, number 326, individuals can rely on a provision of a directive in court whenever the provisions of the directive are unconditionally and sufficiently precise, and the Member State has not properly implemented the directive within its national legislation. Neither this case law nor Article 189 of the Treaty establishing the European Economic Community provides any indication to support the view that the tax administration of a Member State can invoke a Council directive against a taxpayer when a provision of national legislation invoked by that taxpayer is contrary to that directive.
Therefore, the Supreme Court finds it clear that the application of Article 4, paragraph c, of the Decree is not prevented by the law of the European Communities in favor of the appellant.
4.4. From the foregoing, it follows that the second ground of appeal is well-founded.
Source: uitspraken.rechtspraak.nl
