On May 21, 2008, the ECJ issued the Order in the case C-456/07 (Mihal).
Context: Article 104(3), first subparagraph, of the Rules of Procedure – Sixth VAT Directive – Taxable persons – Article 4(5), first subparagraph – Bodies governed by public law – Bailiffs – Natural and legal persons
Article in the EU VAT Directive
Article 4(5) of the Sixth VAT Directive (Article 13 of the EU VQT Directive 2006/112/EC)
Article 13
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.
Facts
- Mr. Mihal exercises, in Slovakia, the profession of judicial officer. On July 7, 2004, he asked the Daňový úrad Košice V to order the cancellation of his registration as liable for VAT as from May 1 , 2004. This request was rejected by decision of July 20, 2004, at reason that the person concerned was a taxable person within the meaning of Law No 222/2004.
- On 6 October 2004, Mr Mihal brought an action before the Krajský súd Košice (Regional Court, Košice) seeking the annulment of that decision, which was dismissed on 9 March 2005. He then appealed to the Najvyšší súd Slovenskej republiky (Supreme Court of the Slovak Republic), relying on the direct effect of the Sixth Directive and, in particular, of Article 4(5) thereof.
Questions
AG Opinion
None
Decision
An activity carried out by an individual, such as that of judicial officer, is not exempt from value added tax simply because it consists in the performance of acts falling under the prerogatives of the public authority. . Even assuming that, in the performance of his duties, he performs such acts, the judicial officer, under the terms of legislation such as that at issue in the main proceedings, exercises his activity not in the form of a body governed by public law, not being integrated into the organization of the public administration, but in the form of an independent economic activity, carried out within the framework of a liberal profession, and, therefore, it cannot benefit from the exemption provided for in the first subparagraph of Article 4 (5) of Sixth Council Directive 77/388 / EEC of 17 May 1977,
Summary
An activity carried on by a private individual, such as that of a bailiff, is not exempt from value added tax merely because it consists in the performance of acts of the State. Even if the judicial officer performs such acts in the performance of his duties, under legislation such as that at issue in the main proceedings, he does not carry out his activities as a body governed by public law, since he is not part of the public authorities, but in the form of an economic activity as a self-employed person in the context of a liberal profession, and therefore does not qualify for the exemption provided for in the first subparagraph of Article 4(5) of the Sixth Council Directive (77/388/EEC) , of 17 May 1977,
Source:
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