C-348/87

STICHTING UITVOERING FINANCIELE ACTIES v STAATSSECRETARIS VAN FINANCIEN

OPINION OF MR ADVOCATE GENERAL MISCHO delivered on 20 April 1989 »

Mr President, 'Do the transactions which must be Members of the Court, exempted from turnover tax pursuant to Article 13(A)(1)(f) of the Sixth Directive cover the activities of a foundation which consist exclusively in the organization and performance of work which is related to tne 1. The Stichting Uitvoering Financiële activities of another foundation, against Acties (hereinafter referred to as 'SUFA') is reimbursement of expenses actually a foundation which, against reimbursement incurred, where the other foundation acts as of expenses actually incurred, organizes and an umbrella organization for a number of holds lotteries on behalf of the Stichting bodies exercising an activity which is exempt Algemene Loterij Nederland (hereinafter or for which they are not taxable and, solely referred to as 'ALN') which distributes the for those bodies, performs services as proceeds amongst a certain number of social defined in the aforesaid provision of the and cultural institutions affiliated to it. Sixth Directive?'

2. Under the Netherlands legislation implementing the Sixth Directive on VAT, 1 in particular Article 13 thereof, SUFA had 5. Article 13(A)(1)(f) of the Sixth Directive to pay VAT on the amount of the cost of provides: the abovementioned services to ALN during the month of April 1983.

'Without prejudice to other Community- 3. SUFA submitted a complaint against provisions, Member States shall exempt the that taxation to the Inspector of Taxes. It following under conditions which they shall then brought an action before the lay down for the purpose of ensuring the Gerechtshof (Regional Court of Appeal), correct and straightforward application of The Hague, before lodging an appeal to the such exemptions and of preventing any Hoge Raad (Supreme Court) of the possible evasion, avoidance or abuse: Netherlands.

6. The Commission is right to emphasize 'the Sixth Directive is characterized by its that the supplies of services referred to by general scope and by the fact that all that provision are exempt only if a whole exemptions must be expressly provided for series of conditions are met. It is evident and precisely defined' (paragraph 19 of the from the order for reference and from the decision). observations submitted to the Court that it is common ground that all those conditions are met by the services which ALN renders to its members. Moreover, the question referred by the Hoge Raad for a preliminary ruling expressly envisages that 10. As proof of the very general scope hypothesis. attributed to VAT, the Court pointed out that Article 2 of the Sixth Directive, relating to taxable transactions, refers not only to the importation of goods but also to the supply of goods or services effected for consideration within the territory of a 7. The documents before the Court also country, and that Article 4(1) defines a show that SUFA supplies services, against taxable person as any person who indepen­ reimbursement of the costs actually dently carries out any economic activity incurred, to one 'person' (ALN) whose ac­ specified in paragraph 2, that is to say all tivities are not subject to VAT. The supplies activities of producers, traders and persons of services in issue are directly necessary for supplying services (paragraphs 6 and 7 of the exercise of those activities. the decision).

8. Having regard to the foregoing, the 11. It follows that any exemptions, as question put to the Court may be divided exceptions to the general rule that VAT is into two parts: whether such supplies of levied on all economic activity, are to be services carried out by one foundation on interpreted strictly and must not exceed behalf of another foundation are carried out what is expressly and clearly provided for.

The aforesaid activities are exempt, therefore, only if they are carried out by 13. However, SUFA argues that it should particular bodies which, in the case of in fact receive exemption because it indent (f), must be 'independent groups of continues, in fact, to organize the lotteries persons'. on behalf of the institutions affiliated to ALN and would therefore qualify for the exemption if ALN had not been set up, and 16. SUFA may be regarded as constituting also because the activities which SUFA such a group of persons working directly on currently performs would certainly be behalf of the members of ALN only if ALN exempt if they were performed by ALN. is to be regarded simply as a screen between SUFA and the social and cultural institutions. That is a question of fact which falls within the jurisdiction of the national courts and it seems to have been resolved by 14. Those arguments cannot be accepted. the finding that the two bodies are inde­ They are both based on simple hypotheses pendent of each other. Moreover, the two which do not correspond to the facts: ALN foundations do not carry out the same acti­ exists and since the time of its creation vities: SUFA organizes and holds the SUFA has no longer been working directly lotteries, whereas ALN obtains permission for the social and cultural institutions, but on behalf of the institutions which are rather for ALN which alone reimburses the affiliated to it and distributes the proceeds expenses SUFA incurs in holding lotteries. of the lotteries amongst those institutions.

17. For all the above reasons and for the additional reasons given in their obser­ vations by the Netherlands Government and by the Commission of the European Communities , in which I concur , I conclude that the question referred by the