On October 22, 2024, a preliminary ruling request was sent to the General Court.
Article in the EU VAT Directive
Articles 2, 9 and 13
Article 2 – Taxable transactions
Article 9
1. ‘Taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.
Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.
2. In addition to the persons referred to in paragraph 1, any person who, on an occasional basis, supplies a new means of transport, which is dispatched or transported to the customer by the vendor or the customer, or on behalf of the vendor or the customer, to a destination outside the territory of a Member State but within the territory of the Community, shall be regarded as a taxable person.
Article 13
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
- Establishment and Purpose: In 2003, the cities of Ghent and Antwerp, along with their public social welfare centers (OCMWs), established Digipolis as a public legal entity to manage, operate, and develop telematics services, aligning policies and strategies for mutual synergies.
- Membership and Structure: Initially, Ghent and Antwerp held shares in Digipolis, but a 2010 amendment allowed additional autonomous agencies to join without shares, broadening the association’s participant base.
- Services and VAT Audit: Digipolis provided ICT services to both members and non-members. A VAT audit for 2014-2016 led the Belgian State to claim VAT on fees charged to members, arguing these transactions were taxable, resulting in significant VAT and penalty claims.
- Subsequent VAT Payments and Dispute: For 2017-2020, Digipolis paid VAT on member fees but later reclaimed it, leading to a dispute with the Belgian State, which refused the refund, prompting legal action by Digipolis.
- Legal Proceedings: The Court of First Instance ruled against the VAT claims for 2014-2016 and reopened debates for 2017-2020. The case was escalated to the Court of Appeal, which referred questions to the European Court of Justice regarding VAT liability on services provided by Digipolis.
Question
- Are Articles 2, 9 and 13 of […] Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and the principle of neutrality infringed if those provisions are interpreted as meaning that, by joining a commissioning association, participants who have made a conferral of management are not liable for VAT when they avail themselves of the services of the commissioning association since, in the context of the conferral of management, the latter is deemed to be acting in place of its members, with the result that services provided by the commissioning association to the participants are deemed to be services provided to itself and thus there is no participation in trade/taxable transactions? In the light of these provisions, should a distinction be made in this respect between participants in the commissioning association for the purpose of Article 13 of […] Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and participants for the purpose of Articles 9 and 132 of […] Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax?
Source
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