Súdny dvor Európskej únie·24.3.1988

C-10/87

ECLI:EU:C:1988:175

Súd: Súdny dvor Európskej únie
IČS: 61987CC0010
Zdroj: eur-lex.europa.eu ↗

OPINION OF MR VILAÇA — CASE 10/87

OPINION OF MR ADVOCATE GENERAL DA CRUZ VILAÇA delivered on 24 March 1988 *

Mr President, importation exemption from VAT for race Members of the Court, horses imported from Ireland for a maximum period of two years for training or racing in the United Kingdom, even though the sale of the horses in question is 1. I — The High Court of Justice, Queen's exempt from VAT in Ireland. Bench Division, London, wishes to determine the correct interpretation of certain provisions of the Seventeenth Council Directive (Directive 85/362/EEC) 4. Essentially, the parties to the main of 16 July 1985 1 on exemption from proceedings differ as to whether or not the value-added tax on the temporary goods (in this case racehorses) which the importation of goods other than means of legislation of the exporting State exempts transport. from VAT are to be regarded as 'acquired subject to the rules governing the application of value-added tax in the Member State of exportation' (see the 2. The essential purpose of the questions articles cited) and whether or not such submitted is to determine whether or not goods may therefore benefit from exemption from United Kingdom temporary importation exemption from value-added tax should be granted where a VAT in the importing Member State. horse is purchased with the benefit of exemption from value-added tax under Irish legislation and is thereupon temporarily imported into the United Kingdom. 5. In view of that problem of interpretation, the High Court decided to submit to the Court for a preliminary ruling the questions which are set out in the Report for the 3. The proceedings before the national Hearing. court concern an application lodged by an English company specializing in auctions of thoroughbred horses, Tattersalls Ltd, which is based in Suffolk, challenging the interpre tation of Articles 10 (c) and 11 (b) of the 6. II — Only the applicant in the main Seventeenth Directive adopted by the proceedings (Tattersalls Ltd) considers that Commissioners of Customs and Excise, goods must be regarded as 'acquired subject who , pursuant to Article 5 of the Value- to the rules governing the application of added Tax (Temporarily Imported Goods) value-added tax in the Member State of Relief Order 1985, 2 grant a temporary exportation' only where tax was paid at the time of acquisition. If, however, it was not * Translated from the Portuguese. so paid, the acquisition does not, in the 1 — OJ L 192, 24.7.1985, p. 20. applicant's view, comply with the rules on 2 — Superseded as from 1 January 1987 by a 1986 order containing the same provisions. the application of VAT.

THE QUEEN v CUSTOMS AND EXCISE, EX PARTE TATTERSALLS LTD

7. It is clear that the literal content of the 10. Thus, provision for that exemption is provisions in question points to a different validly included in the rules on the interpretation. application of VAT in the exporting Member State.

11. Adopting a logical interpretative 8. Although the wording is somewhat 3 approach, we must conclude that, if the different, Articles 10 (c) and 11 (b) make legislature had intended to grant a the exemption subject to the same temporary exemption only in cases where conditions: the acquisition was subject to tax in the exporting country, it would have expressed itself in an entirely different manner (by (a) the goods must have been acquired saying, for example, that VAT should have subject to the value-added tax rules in been paid or that the acquisition should the State of exportation; have been subject to application of the tax). It did not do so because it was in fact seeking to apply a different solution. (b) an exemption from VAT must not have been granted in respect of those goods by virtue of their being exported.

12. Furthermore, it must be borne in mind that this matter falls within the area of fiscal law characterized by rules defining the incidence of the tax, in relation to which certain legal writers — in homage to the 9. The purchase of a thoroughbred horse principle nullum vectigal sine lege or in which, under the rules in force in Ireland, is compliance with the principle that taxes exempt from VAT there cannot be regarded must be legal or conform to prescribed legal as taking place in contravention of those types — reject as unacceptable not only the rules. They in turn are in conformity with application of rules by analogy but also the Community law, which provides for the adoption of an extensive interpretation. exemption in question during the transi tional period on the conditions laid down in Article 28 (3) (b) in conjunction with point 4 of Annex F to the Sixth Council Directive (77/388/EEC) of 17 May 1977, 4and those 13. Even if that approach is not conditions are satisfied in Ireland. accepted — and if it is conceded moreover that certain traditional principles of 3 — The difference derives from the fact that in one case domestic tax law cannot be transposed (Article 10) the various requirements are formulated posi- tively as conditions for the grant of the exemption and in without amendment into the field of the other case (Article 11) they are expressed negatively as Community tax — it must be recognized conditions for the exemption to be withheld. The English version of the directive also uses two different expressions: that there is no agreement, even among the in Article 10 (c) 'subject to the rules 'and in Article 11 (b) most 'permissive' writers, that an extensive 'pursuant to the rules'. No importance should be attached to this difference of terminology, particularly since it is interpretation can be taken so far as to wholly absent from other versions (for example the French and Iulian language versions). dispense with any link to the literal meaning 4 — OJL145 , 13.6.1977, p. I. of the provision.

OPINION OF MR VILAÇA — CASE 10/87

14. By virtue of what is known in German that the latter incorrectly expressed the law as the 'Andeutungstheorie', 5it is usually legislature's intention? considered that extensive interpretation is limited by the 'possible meaning' of the letter of the law and that, therefore, that method of interpretation can only attribute 18. The applicant seeks to draw that to the provision in question a meaning conclusion from the necessary link between which, although not perfectly expressed in the two parts of Articles 10 (c) and 11 (b). the wording of the provision, nevertheless somehow fits in with it, albeit in a less than felicitous way. 6 19. In its view, Article 10 (c) calls for cumulative fulfilment of the two conditions laid down for the availability of temporary 15. It appears that the interpretation put importation exemption. In the applicant's forward by the applicant in the main view, the second condition (the goods did proceedings displays the characteristics of a not benefit from exemption by virtue of corrective or even partially repealing inter being exported) is only meaningful if the pretation, 7 in so far as it conduces to first condition refers to an owner who, excluding an exemption which can clearly when purchasing goods, paid VAT in the be granted within the letter of the law. Member State of exportation. If an exemption had been granted at the time of purchase, there would not be any VAT 16. Is it justified in this case to have from which the owner could have been recourse — an approach adopted in exempted by virtue of the goods having particular by the German courts in certain been exported. decisions 8— to an interpretation which openly goes against the letter of the law, in order to avoid 'an absurd and economically indefensible result'? 20. That is without doubt clever reasoning, but it is fallacious.

17. Or — if we do not wish to be so radical — is it acceptable to say that it is 21. It is true that, under the general system necessary, as a result of considering the of value-added tax, the rule is that taxable rational or teleological element of the inter transactions are subject to tax (Article 2 of pretation, that is to say the meaning and the Sixth Directive) and exemption is the purpose of the rules at issue or their place exception; it is therefore acceptable to say within the general scheme of the tax system, that the usual situation under the first part to adopt a different interpretation from that of the paragraph is that the transaction in which prima facie flows from the literal the Member State of exportation is subject wording of the provision, thus concluding to VAT.

5 — See the references given in Karl English, Einfiihrung in das juristische Denken, 4th edition, Kohlhammer Verlag, 1968, pp. 82, 104, 105, 146 and 149 (Portuguese translation of the 13th edition: Introdução ao Pensamento Jurídico, 22. But, since the exemptions are bindingly Gulbenkian, 1965, pp. 119, 162 « seq., 239 and 243). provided for in Community law, that is not 6 — See J. M. Cardoso da Costa, Curso de Direito Fisca/, Almedina, 1970, p. 191, note (1) and p. 193, note (2). the only situation in which the goods are 7 — See J. Oliveira Ascensão, O Direito — introdução e Teoria acquired 'in accordance with the rules Geral, Gulbenkian, 1980, p. 373 et seq. 8 — See the reference in Kruse, Steuerrecht, I, Munich, 1973, governing the application of VAT in the paragraph 8. Member State of exportation'.

THE QUEEN » CUSTOMS AND EXCISE, EX PARTE TATTERSALLS LTD

23. The introduction of the copulative which I advocate is correct. Article 11 (b) conjunction 'and' linking the two parts of provides that temporary importation that paragraph therefore indicates the exemption is not to be granted either where requirement (second condition) that, where the goods were not acquired pursuant to the there is an exemption in the Member State rules governing the application of VAT or of exportation, that exemption should not where, although those rules were complied be ascribable to the exportation of the with, the goods benefited from exemption goods. That of itself confirms that from VAT by virtue of being exported. compliance with the rules governing the application of value-added tax mentioned in the first part of the provision covers the hypothesis of exemption from the tax, 26. It is entirely clear that two separate situ without which the limitation of the ations are envisaged in which temporary condition laid down in the second part to importation exemption cannot be cases where the exemption is granted granted — non-compliance with the VAT because the goods have been exported rules or exemption by reason of would become incomprehensible. In other exportation — not two stages in the same words, if the first part already meant that process, as the applicant in the main the temporary importation exemption from proceedings appears to presume. VAT is not granted for a transaction which is legally exempt from VAT in the Member State of exportation, it would not be necessary to lay down a new condition to 27. It was, however, on the basis of that the effect that that exemption is only presumption that the applicant, focusing its withheld where the goods have benefited attention on Article 11 (b), reaffirmed its from an exemption from VAT by reason of position at the hearing, insisting once more the exportation thereof. Thus, it is the that only if the two parts of the provision applicant's interpretation which ultimately are interpreted in conjunction with each deprives the provision of any meaning. other can they have any coherent meaning.

24. The second part of the paragraph, read in conjunction with the first part, therefore 28. In the applicant's view, the second part seems to mean that, if for any reason the of the paragraph relates to cases where, owner paid VAT at the time of purchase, he VAT having been paid at the time of would not be able to benefit from a acquisition in the Member State of temporary importation exemption if the exportation in accordance with the rules transaction was exempt by reason of being governing the application of the tax in that an export transaction; and that, if, having State, the tax paid is, by way of a second being granted an exemption, he did not pay stage, reimbursed at the time of exportation. "the tax, that exemption must not have derived from the fact that the goods were exported. In other words, the grant of an exemption by virtue of the goods in 29. The first part of the paragraph thus question having been exported is excluded refers, according to the applicant, to those in any case. cases where VAT was not paid at the time of acquisition because the transaction was exempt from VAT: in those circumstances, 25. The wording used in Article 11 (b) the importer cannot benefit from a fresh appears to confirm that the interpretation exemption upon temporary importation.

OPINION OF MR VILAÇA — CASE 10/87

30. There is an error in the applicant's temporary importation exemption under the argument — and the United Kingdom was Seventeenth Directive, it did so because it right to draw attention to it. intended or accepted that an exemption on that basis should be able to co-exist with the remaining cases of exemption. 31. Tattersalls argues from the premiss that the VAT is first paid in respect of the acquisition of the goods and is then reim bursed upon exportation. 35. Ultimately, the significance of the regime provided for in the Seventeenth Directive is that, in the case of temporary 32. However, that is not how the general importation, the goods continue during the system operates: goods acquired for period concerned to be subject to the rules exportation constitute a category of goods governing VAT in the State of exportation, of which the purchase is exempt from VAT, regardless of whether those conditions as provided for in Article 15 of the Sixth involve the actual application of the tax or Directive. It is the actual deliveries of goods provide for an exemption, and whether the which the seller or the purchaser dispatches rate of VAT in the country of exportation is or transports outside the territory of the equal to, or greater or less than (and even country of exportation which, in accordance considerably less than) the rate applicable in with paragraphs (1) and (2) respectively of the country of importation. Article 15 of the Sixth Directive, are exempt from VAT.

36. The justification for the exemption under Articles 10 and 11 of the Seventeenth 33. The logic underlying the structure of Directive (and it is here that Tattersalls Article 11 (b) of the Seventeenth Directive makes a fundamental error) is not the fact (and of Article 10 (c)) is, therefore, that the tax has been paid in the country of different from that attributed to it by exportation but rather the fact that the Tattersalls, in so far as it is based on the importation is temporary — and that following idea: if the goods are not consideration is valid both when the intended for exportation, the purchaser will acquisition of the goods was subject to VAT pay the tax if tax is due; exemption by in the State of exportation and when it was reason of exportation will be granted only if not as a result of being exempted for some the exportation is definitive, it then being reason other than definitive exportation (for pointless to grant temporary importation exemption from the tax in the State of example, as occurs in this case where the importation. exemption is of the kind provided for in Articie 28 (3) of the Sixth Directive), and where the goods were acquired by in heritance or donation or the transaction was 9 34. That — and that alone — was the only carried out by a non-taxable person. The case of exemption in respect of the contrary argument put forward by the acquisition of goods which Articles 10 and applicant at the hearing, derived from the 11 sought to exclude from the benefit of fact that it is possible for the owner of a temporary importation exemption from mare to export temporarily, for training or VAT in the country of importation. The legislature was certainly not unaware of the 9 — This follows from the fact that, once again, it is 'the rules existence of exemptions other than those governing the application of VAT' (in particular Article 2 of the Sixth Directive, which is necessarily transposed into granted in respect of exportation: although national legislation) which exclude the levying of taxation it excluded only the latter from the grant of in the case of transactions in which no consideration is paid and those carried out by non-taxable persons.

THE QUEEN v CUSTOMS AND EXCISE, EX PARTE TATTERSALLS LTD

to be limited and temporary) of the racing in an another Member State, a colt provision which enables Ireland, by way of to which that mare has given birth, can derogation from the general scheme of the easily be turned against it: according to the Sixth Directive, to exempt the purchase of applicant's interpretation, that colt could thoroughbred horses from VAT. not be allowed to run a single race in another Member State without paying the VAT applicable in that State, unless it had been subject to tax in the State of exportation merely by reason of having been born! 39. As long ago as 4 December 1984, the Commission submitted to the Council a proposal for an Eighteenth Directive on VAT 11which removed from Annex F to the 37. The justification for temporary Sixth Directive deliveries of thoroughbred importation exemptions of this kind is given horses and greyhounds. However, the in the preamble to the Seventeenth Council did not adopt the Commission's Directive, as was pointed out by several of proposal, and the derogation therefore the parties to the proceedings: '. . . it is remains. Tattersall's interpretation is important to reduce fiscal barriers to the basically an attempt to remedy, with respect movement of goods within the Community to this case, the practical effects of the in order to facilitate the supply of services Council's omission, arrogating to itself the and thus develop and strengthen the internal latter's legislative power. Such a procedure market' (first recital); and ' ... the widest is not lawful and accordingly, as possible exemption from value-added tax Community law stands at the present time, for goods temporarily imported from one we must accept the existence of a distortion Member State to another will contribute of competition, which is no less disturbing towards the realization of this objective' than that which is brought about by the lack (second recital). of uniformity of rates of taxation in the various Member States, but is just as inevitable.

38. I am not unaware of the fact that when the scheme of the Seventeenth Directive was worked out account was not taken of the temporary exemptions provided for in 40. That conclusion cannot be countered by Annex F to the Sixth Directive and that, in reliance upon Article 14 (2) of the Sixth such cases, the application of the regime Directive, the second subparagraph of provided for in the Seventeenth Directive which provides that the Member States may gives rise to distortions in trade and compe adapt their national provisions in order to tition, brought about by differences in the minimize distortions of competition pending rules on tax incidence as between the 10 the entry into force of the Community tax Member States. But the solution is to be rules referred to in the first subparagraph of found not by proposing an interpretation of that provision, which are intended to define the Seventeenth Directive which gives rise the scope of the exemptions provided for in to consequences not intended by it, but Article 14 (1). It was pursuant to Article rather by bringing to an end the validity 14 (2) that, with respect to temporary (which, from the outset, was acknowledged imports, the Seventeenth Directive laid down rules governing, at Community level, 10—In the present case no such distortions would occur if the position was such that the United Kingdom was able to grant the same exemption under Article 28 of the Sixth 11 — OJ C 347, 29.12.1984, p. 3. Directive.

OPINION OF MR VILAÇA —CASE 10/87

the grant of the exemption provided for in make certain that the benefit of the Article 14 (1) (c). It is not therefore exemption is not granted to any person possible to base on the second subparagraph who, by tax evasion or avoidance, has failed of Article 14 (2) any argument capable of to comply with the tax rules applicable to overriding the express provisions of the the acquisition of goods. Seventeenth Directive and of Article 28 (3) (b) and Annex F of the Sixth Directive.

43. Contrary to the applicant's view, it does not appear to be the case that the need to verify the fulfilment of that condition by the importing Member State makes it impossible 41. The cases of distortion resulting from to apply the provision or gives rise to a this system are, moreover, limited by the requirement which cannot be satisfied. conditions imposed by the Seventeenth Directive for the grant of the temporary importation exemption. Article 10 (c) and Article 11 (b) each form part of a set of conditions which define the scope of that 44. On the one hand, it is doubtful whether regime, the conditions being particularly the requirement of compliance with the restrictive in the case of Article 11, that is to rules governing the application of VAT, laid say where the goods in question belong to a down in the first part of the subparagraphs person established within the territory of the in question, is to be understood as referring Member State of importation — a situation to anything other than the latest acquisition, that appears to cause Tattersalls particular that is to say the acquisition by the person concern in so far as it gives rise to distortion who exports or temporarily imports the which is liable to affect it adversely. One of goods. Apparently, the legislature did not the conditions imposed in the latter case is, wish to require verification of compliance for example, that the temporary importation with the VAT rules by the seller of the exemption is not granted if the importer is goods or by the subsequent owners thereof. 1 not a taxable person. 2 That is what appears from the terms used in the directive and is the reasonable inference to be drawn from them.

42. The interpretation proposed by the applicant for the first part of the paragraphs 45. In any event, there is nothing to in question having been rejected, it is clear indicate that verification of that kind would that those provisions can only mean that, in give rise to any particular difficulties. order to benefit from temporary importation exemption, the owner of the temporarily imported goods must have complied with the rules governing the application of VAT in the Member State of exportation. The 46. Proof of compliance with the VAT rules purpose of the provisions is therefore — as at the time of purchase may be required was emphasized by the Commission — to directly, particularly since, in the normal course of events, the temporary importation 12 — The official Portuguese translation of the directive is is effected by the person who acquires the defective at this point. goods or was already the owner thereof.

THE QUEEN v CUSTOMS AND EXCISE, EX PARTE TATTERSALLS LTD

47. Moreover, Community law provides, in December 1979, amending Council case of doubt, for cooperation and mutual Directive 77/799/EEC of 19 December assistance between the tax authorities in the 1976, 14 the obligations concerning Member States, in order to combat tax cooperation and exchange of information evasion and avoidance. Since the adoption enabling taxes to be levied correctly apply of Council Directive 79/1070/EEC of 6 also to value-added tax.

48. III — In those circumstances, I propose that the Court should give the following answer to the questions submitted by the High Court:

'Article 10 (c) and Article 11 (b) of the Seventeenth Directive on value-added tax must be interpreted as meaning that temporary importation exemption is granted in respect of goods of which the acquisition in the Member State of exportation was lawfully exempted from value-added tax, provided that the said exemption was not granted by virtue of the goods in question being exported.'

13 — OJ L 331, 27.12.1979, p. 8. 14 — OJ L 336, 27.12.1977, p. 15.