C-173/88

OPINION OF MR JACOBS — CASE 173/88

OPINION OF MR ADVOCATE GENERAL JACOBS delivered on 17 May 1989 *

My Lords, (b) the leasing or letting of immovable property excluding:

1. In this reference from the Højesteret (Danish Supreme Court) the question arises 1. the provision of accommodation, as whether VAT should be charged on the defined in the laws of the Member letting of individual, closed garages under States, in the hotel sector or in the terms of Article 13B(b) of the Sixth sectors with a similar function, VAT Directive (Council Directive 77/388/ including the provision of accommo­ EEC of 17 May 1977 on the harmonization dation in holiday camps or on sites of the laws of the Member States relating to developed for use as camping sites; turnover taxes — Common system of value-added tax: uniform basis of assessment, Official Journal 1977, L 145, p. 1)·

2. the letting of premises and sites for parking vehicles;

2. Article 13 of the Sixth VAT Directive is entitled 'Exemptions within the territory of the country'. Article 13A is headed 'Exemptions for certain activities in the 3. lettings of permanently installed public interest'. Article 13B is headed equipment and machinery; 'Other exemptions' and provides as follows:

7. It appears from the documents in the case that the garage complex concerned Member States may restrict the scope of this comprises two buildings each with 12 right of option and shall fix the details of its garages which were erected at the same time use.' as a building development of 37 terraced houses. Some of the garages are let to residents of the housing development whilst others are let to residents in the same neigh­ bourhood. They are lock-up garages which 4. Article 13B must be read in the light of are partitioned and each has its own door. the seventeenth recital of the preamble to Similar sorts of garages may be seen behind the Directive: houses or blocks of flats throughout Europe. Mr Henriksen made it clear at the oral hearing that he owned only the garages and not any of the houses. 'Whereas Memi er States should be able, within certain limits and subject to certain conditions, to take or retain special measures derogating from this Directive in order to simplify the levying of tax or to avoid fraud or tax avoidance.'

8. In the national proceedings, at first instance the Østre Landsret (Eastern Division of the High Court) held that the 5. The Sixth VAT Directive was letting of such garages was not subject to implemented in Denmark by Law No 204 tax. The Court considered that, in of 10 May 1978, which incorporated the accordance with the natural linguistic substance of the provisions of, among meaning of 'site for parking' in the Danish others, Article 13B(b) of the Directive. law, the exclusion from the exemption

OPINION OF MR JACOBS — CASE 173/88

SKATTEMINISTERIET v HENRIKSEN

11. If this case had fallen to be decided on ground car-park of the kind found in city the basis of the English language version of centres. Only by extension, perhaps, would the Directive taken alone, I would have had the term 'emplacement pour le station­ little difficulty in reaching the conclusion nement des véhicules' be apt to cover a that garages of the kind in issue in this case building such as a garage. fall within the exclusion denoted by the words 'premises and sites for parking vehicles' and that the letting of such garages was liable to VAT, possibly subject to an exception of the kind suggested by the Commission where the letting of the garage was merely ancillary to the letting of other property such as a house or flat. I shall 14. The other language versions seem closer consider in due course the issues which to the French than to the English on this might arise on that view. point. The Danish has 'pladser til parkering af køretøjer', literally 'places [or sites] for parking vehicles'; the Dutch has 'verhuur van parkeerruimte voor voertuigen'; the German has 'der Vermietung von Plätzen für das Abstellen von Fahrzeugen' and the Italian has 'delle locazioni di aree destinate al parcheggio dei veicoli', all of which seem to have similar connotations to the French. 12. But it is clear in this case that there are Thus of the six versions of the Directive variations in the different language versions authentic at the time of its adoption, all of the Directive and it is necessary, except the English one can be taken to therefore, to consider the several language indicate that the exclusion is at least versions, and also to seek to place the primarily confined to the letting of places, provisions in issue in the context of the or spaces, for parking; a meaning which, in Directive as a whole, seen in the light of its the English text, would have been better objectives. expressed by the term 'sites', rather than 'premises and sites', for parking vehicles.

16. The history of the text is unhelpful in of all goods and services is subject to VAT, this respect, although it may be mentioned if effected for consideration by a taxable that the Commission's proposal for a person acting as such, unless expressly Directive (which also went far wider in exempted. The provisions for exemption excluding from the exemption the letting of must be interpreted restrictively since they industrial and commercial property) referred constitute an exception to the basic principle only to 'contracts for the supply of parking of the Directive: see for example the facilities' in the English or 'des contrats de judgment of 15 March 1989 in Case 51/88 parking' in the French text {Bulletin of the Hamann v Finanzamt Hamburg-Eimsbüttel European Communities, Supplement 11/73, [1989] ECR 767, paragraph 19. It could be p. 43). argued on that basis that the exemption from the basic rule (for the leasing or letting of immovable property) should be inter­ preted restrictively and that the exclusion from the exemption (for the letting of premises and sites for parking) should be interpreted broadly, since that would result in the application of the basic rule. However, even on such a broad reading, I do not consider that the terms of the 17. The provisions must also be seen in exclusion can be extended to include closed their context. The immediate context garages without departing substantially from provides little assistance, since the other the normal meaning of the words used in exclusions specified in Article 13B(b)(2) are most of the language versions. Moreover, in a motley set, with no guiding principle a Directive intended to be applied uniformly apparent. On the other hand, the exemption throughout the Community by the tax auth­ provided for by Article 13B(b) is very orities of the Member States, and in which broadly expressed, extending as it does to the exemptions are expressly designed to be the leasing or letting of all immovable applied in a 'straightforward' manner, it is property subject to the specified exclusions. appropriate that the terms used should be In the context of that broadly worded given, where possible, their ordinary exemption, it would seem excessive to meaning. Consequently the aims of the interpret the exclusion relating to the letting Directive in that respect support the view of sites for parking vehicles so widely as to that the exclusion relating to the letting of extend it to a transaction which appears to sites for parking should not be interpreted fall outside its terms, and in so doing to give as extending to the letting of closed garages. it a meaning which would be contrary to the prevailing sense of the text.

garages rather than any other form of context, that the exclusion does not apply to parking. The Government also argues that the letting of individual closed garages of such an exemption would give rise to the kind in issue in this case, and that the difficult problems of demarcation between first question referred must be answered in different types of parking place. But similar the negative. difficulties would arise if the letting of closed garages were not exempt, since, as the Commission accepts, even if the letting of garages were to be treated as generally subject to VAT, exceptions might have to be made where the letting was ancillary to the letting of other immovable property such as a house. The anomalies that would thus arise are well illustrated by the facts of the present case, where some of the garages are let to residents of the houses which form part of the development in which the garage 21. On the view I take of the first question, complex is located, while other garages in the second question referred does not arise. the same complex are not. The Commission If however the view were taken that the proposes as a criterion that VAT should be letting of garages of the kind in issue is levied in respect of a garage only when a excluded from the exemption, then in my separate price is specified for the letting of view the second question would have to be the garage, but that criterion could plainly answered in the affirmative. The effect of itself give rise to anomalies or even to abuse. the exclusion would be that such a letting The Commission's view would lead to was subject to VAT, and the Directive results which are no easier to reconcile with permits of no discretion in that respect. The 'the purpose of ensuring the correct and only possibility of discretion arises under the straightforward application of the final words of Article 13B(b), which allow exemptions and of preventing any possible Member States to apply further exclusions evasion, avoidance or abuse'. The to the scope of the exemption, but do not Commission also draws a distinction, based allow Member States to derogate from the on a survey of the practice of certain exclusions specified. The discretion allows Member States, between residential garages Member States to extend liability to VAT, and commercial lettings. That distinction not to restrict it. does not seem persuasive, when it is recalled that the letting of commercial property generally is exempt from VAT under the Directive. Although under Article 13C Member States may allow taxpayers a right of option for taxation in cases of letting and leasing of immovable property, the provisions of Article 13C also make no distinction between commercial and other property.

23 . Accordingly in my opinion the questions referred should be answered as follows :

Article 13B(b) of Council Directive 77 / 388 / EEC of 17 May 1977 on the harmon­ ization of the laws of Member States relating to turnover taxes (the Sixth VAT Directive) must be interpreted as meaning that the letting of individual closed garages is not subject to VAT , unless a Member State has itself adopted specific legislative measures to extend liability to VAT to such lettings.