The ECJ issued the preliminary ruling in the case C-433/24 (Galerie Karsten Greve).
Context:
Articles in the EU VAT Directive
Article 311(1)(2) and 316(1)(b) of Council Directive 2006/112/EC
Article 311
1. For the purposes of this Chapter, and without prejudice to other Community provisions, the following definitions shall apply:
(2) ‘works of art’ means the objects listed in Annex IX, Part A;
Article 316
1. Member States shall grant taxable dealers the right to opt for application of the margin scheme to the following transactions:
(b) the supply of works of art supplied to the taxable dealer by their creators or their successors in title;
Facts & Background
The French tax authorities audited Galerie Karsten Greve, an art gallery business, and questioned their application of the margin taxation scheme to the resale of artworks acquired from Studio Rubin Gideon, a UK-based company. As a result, additional assessments for VAT were issued for the period from January 1 to December 31, 2014. The case revolves around the interpretation of provisions in the VAT Directive and the French General Tax Code. The key issue is whether Studio Rubin Gideon, as a legal person, can be considered the “creator” of the paintings for the purpose of applying the VAT margin scheme. The Court of State has referred the case to the Court of Justice of the European Union for a preliminary ruling to clarify these questions.
Questions
(1) Must the provisions of Article 316(1)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, combined with those of Article 311(1)(2) thereof and those of Part A of Annex IX thereto, be interpreted as precluding a legal person such as a company from being regarded, within the meaning and for the purposes of those provisions, as the ‘creator’ of a painting?
(2) If the first question is answered in the negative, which criteria must be taken into account to allow a legal person such as a company to be regarded, within the meaning and for the purposes of those same provisions, as the ‘creator’ of a painting (such as, in the case of a company, the company being subject to a particular legal regime, the fact that the natural person who painted the painting holds some or all of the company’s share capital, the exercise by that person of management functions within the company, and so on)
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