On March 14, 2019, the ECJ issued his decision in the case C-449/17 (A & G Fahrschul-Akademie GmbH). The case dealt with the VAT exemption of Motor vehicle driving tuition provided by a driving school.
Article in the EU VAT Directive
Article 132 (1) (i) and (j) of the EU VAT Directive 2006/112/EC
Article 132
1. Member States shall exempt the following transactions:
(i) the provision of children’s or young people’s education, school or university education, vocational training or retraining, including the supply of services and of goods closely related thereto, by bodies governed by public law having such as their aim or by other organisations recognised by the Member State concerned as having similar objects;
(j) tuition given privately by teachers and covering school or university education;
Facts
- The A & G Fahrschul-Akademie GmbH is a German company operating a driving school. The company declared its VAT-related transactions as part of its business.
- However, the company later applied for an adjustment of its own VAT Returns, arguing that its activities were actually exempt from VAT, based on the exemption for ‘educational services’ (article 132(1) i and j of the VAT Directive).
- The German tax authorities rejected the application of the company.
- The German Court asked several questions to the European Court of Justice, but the following question is the key question:
- Does the concept of school and university tuition in Article 132 (1) (i) and (j) of the VAT Directive include driving instruction for obtaining category B and C1 driving licenses?
Questions
1. Does the concept of school or university education in Article 132(1)(i) and (j) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax cover driving school tuition to acquire category B and category C1 driving licences?
2. If the answer to question 1 is in the affirmative:
Can the applicant be recognised as an organisation with similar objects for the purposes of Article 132(1)(i) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax on the basis of the provisions on the driving instructor examination and the issue of a driving instruction and driving school licence in the Law on driving instructors (Gesetz über das Fahrlehrerwesen) of 25 August 1969 (Bundesgesetzblatt I 1969, 1336), last amended by the Law of 28 November 2016 (Bundesgesetzblatt I 2016, 2722, Fahrlehrergesetz, Law on driving instructors), and of the public interest in the training of learner drivers to be safe, responsible and environmentally aware road users?
3. If the answer to question 2 is in the negative:
Does the term ‘tuition given privately by teachers’ contained in Article 132(1)(j) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax require that the taxable person be an individual trader?
4. If the answers to questions 2 and 3 are in the negative:
Is an instructor always providing tuition privately within the meaning of Article 132(1)(j) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax if he acts on his own account and at his own risk, or must further requirements be met to qualify as a private teacher?
AG Opinion
Article 132(1)(i) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that driving school tuition for the purpose of acquiring category B and category C1 driving licences is not covered by the concept of school or university education within the meaning of that provision.
Decision
The concept of ‘school or university education’, within the meaning of Article 132(1)(i) and (j) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, must be interpreted as not covering motor vehicle driving tuition provided by a driving school, such as that at issue in the main proceedings, for the purpose of acquiring driving licences for vehicles in categories B and C1 referred to in Article 4(4) of Directive 2006/126/EC of the European Parliament and of the Council of 20 December 2006 on driving licences.
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