C-327/94

DUDDA ν FINANZAMT BERGISCH GLADBACH

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 25 April 1996 *

Introduction comprise, in particular, the provision of opti- mum sound levels and sound quality for concerts and similar events. While his busi- ness is established in Germany, most of the events for which he provides his services take place abroad. 1. In this preliminary reference, the Court is asked to interpret for the first time the scope of the first indent to Article 9(2)(c) of the Sixth Directive on Value Added Tax (hereinafter 'VAT'). The reference poses the question whether the provision of acoustic services for concerts can be regarded as a cultural, artistic, entertainment or similar activity or, in the alternative, as the provision of a service which is ancillary to such an activity. 3. The plaintiff contracts for his work with the organizer of each event. His work nor- mally involves having to attend to the com- plete sound-engineering arrangements for the event in question. To accomplish this Factual and legal context task the plaintiff initially carries out meas- urements to enable him to determine what equipment is required and how it can be used in order to achieve the optimum sound level and sound quality, or certain sound effects. For certain events, notably the (i) Factual background 'Klangwolke' ('cloud of sound') projects in 1986, the sound performances had to be coordinated with other effects, such as film, laser displays and fireworks. The plaintiff also gives advice on plans of this kind. Fur- thermore, the plaintiff supplies the organizer 2. According to the order for reference, Mr with the equipment which he deems to be Jürgen Dudda, the plaintiff in the main pro- necessary, together with the personnel ceedings (hereinafter 'the plaintiff'), supplies required both to set up and to operate that sound-engineering services within the frame- equipment. Sometimes the equipment work of his one-man business. These services belongs to the plaintiff and sometimes it has to be hired from other suppliers. The plain- tiff receives a single payment from the * Original language: English. organizer for all his services.

(ii) Community law 6. Article 9 of the Directive deals with the 'supply of services'. Article 9(1) provides the general rule whereby:

5. Title VI of the Directive concerns the 'The place where a service is supplied shall 'place of taxable transactions'. The reasoning be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is sup- plied or, in the absence of such a place of 1 — OJ 1977 L 145, p. 1. 2 — The defendant altered its statement of the plaintiff's tax business or fixed establishment, the place liability during the course of the proceedings before the where he has his permanent address or usu- national court, and the plaintiff changed his pleadings accordingly, but this docs not affect the present reference. ally resides.'

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DUDDA ν FINANZAMT BERGISCH GLADBACH

7. Article 9(2) of the Directive provides for a where the transport takes place, having number of specific cases. The present pro­ regard to the distances covered; ceedings directly concern the interpretation of Article 9(2)(c), and in particular the provi­ sion in its first indent that:

— Article 9(2)(d), which provides that the service of hiring out of movable tangible property, other than forms of transport, from one Member State for use in 'the place of the supply of services relating another, is deemed to be supplied at the to: place of utilization; and

O P I N I O N O F MR FENNELLY — CASE C-327/94

in Article 9(2)(e) and carried out by a tax- 'entertainment'. They served directly to able person resident abroad. When the entertain the audience at the event, because taxable transaction is effected by a taxable the entertainment value of the event would person resident abroad Member States have been lost without his services. Any may adopt arrangements whereby tax is other interpretation of the UStG would be payable by someone other than the tax- contrary to Article 9(2)(c), first indent, of the able person residing abroad. Inter alia a Directive. According to the plaintiff, any tax representative or other person for activity at his business establishment is at whom the taxable transaction is carried most preparatory in nature and of secondary out may be designated as such other per- importance. The plaintiff relied, in the alter- son. The Member States may also provide native, on the provisions of the UStG which that someone other than the taxable per- correspond to Article 9(2)(d) and (e) of the son shall be held jointly and severally Directive, arguing that his services included liable for payment of the tax; the hiring out of equipment under the former provision, and consultancy services and the supply of staff under the latter. 4

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DUDDA ν FINANZAMT BERGISCH GLADBACH

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OPINION OF MR FENNELLY — CASE C-327/94

of ancillary services' in that provision may and also supplying the requisite equip- dictate a different tax assessment of the ment and the necessary operating staff? plaintiff's services from that under the UStG, read on its own. It recognizes, thus, the pos- sibility that Article 9(2)(c), first indent, cov- ers services by third parties which are 'ancil- lary' to the artistic, entertainment or similar activity and that such an interpretation would override section 3a(l) of the UStG. 5 In this regard, the national court finds that 'the plaintiff's services are not only a necess- (b) Does it make any difference if he has ary prerequisite for the respective artistic undertaken in addition to coordinate performance or entertainment, but are by the sound effects to be produced with their very nature arranged precisely so as to his assistance with certain visual effects realize that performance in the most effective produced by other persons?' manner'. In the absence of any detailed examination of the proper interpretation of 'ancillary services' for the purpose of Article 9(2)(c), first indent, of the Directive in either case-law or academic writings, it decided on 17 October 1994 to refer the fol- lowing questions to the Court: 6

The national court decided to defer consider- ation of questions arising from the provi- sions of the UStG corresponding to Article 9(2)(d) and (e) of the Directive.

'(a) Does a person who, at artistic or Observations submitted to the Court entertainment events, carries out the sound-engineering of the performance supply a service within the meaning of Article 9(2)(c) of the Sixth E E C Direc- tive where his task consists in choosing and operating the equipment used and adjusting it to the particular acoustic 14. Written observations were submitted by conditions and the desired sound effects the German and Italian Governments and by the Commission. By letter of 15 March 1995, the defendant opted not to submit any observations but associated itself with those 5 — This section corresponds to Article 9(1) of the Directive. to be submitted by the German Govern- 6 — The reference was registered with the registry of the Court on 12 December 1994. ment. The German Government and the

Commission also presented oral observations 16. For the sound-engineering service at at the hearing on 7 March 1996. Their obser­ issue in the main proceedings to be regarded vations may be summarized as follows. as coming within the scope of Article 9(2)(c), first indent, of the Directive, the German Government takes the view that it must be capable of being classified as: (i) artistic; (ii) entertainment; (iii) an activity similar to an artistic or entertainment activity; or The German Government (iv) coming within the reference in that provision to 'where appropriate, the supply of ancillary services' to such artistic or entertainment activities. It notes that these provisions have not yet been interpreted by the Court and, so, refers to the German academic writings mentioned by the national court in its order for reference. 1 0 It 15. The German Government refers to the also refers to a decision of the German legislative history of Article 9 of the Direc­ Bundesverfassungsgericht (Federal Constitu­ tive. Noting that the Commission's proposal tional Court), according to which the essence of 29 June 1973 7 would have taxed the sup­ of an artistic service comprises a liberal ply of services exclusively at the place of creation within which impressions, establishment of the supplier, the Govern­ experiences and elements perceived by the ment submits that a number of exceptions to artist are brought directly to the attention of this general rule were introduced during the the audience by means of a certain method legislative process because of fears that dis­ of expression. 1 1 Entertainment services are tortions of competition would arise if pro­ those which satisfy less rigorous criteria; viders of certain services were able to alter namely, those services which serve to amuse the tax regime applicable to them simply by a large section of the population without moving their place of establishment. This meeting artistic criteria. In the Government's was acknowledged in the judgment of the opinion, these definitions may be used in Court in Trans Tirreno Express ν Ufficio Pro­ the interpretation of the Directive because vinciale IVA. 8 Accordingly, the Government the terms at issue are not susceptible of a submits that Article 9(2), as a derogation special definition within the framework of from the general rule (the 'Grundregel') Community law. expressed in Article 9(1), should be inter­ preted strictly. Whenever doubts arise as to the classification of an activity within the scope of the derogating provision, the gen­ eral rule should be applied. It avers that this conclusion conforms with the conception of Article 9(1) endorsed by the Court in Berkholz ν Finanzamt Η amb ur g-Mitte- 17. Applying these definitions to the services Altstadt. 9 provided by the plaintiff, the German

Government submits that they cannot be In its opinion, the words '... and where classified as either artistic or entertainment appropriate, the supply of ancillary services' because they merely serve to create the tech- can only be interpreted as referring to nical conditions which permit the expression services, other than the principal service, of the relevant artistic or entertainment which are provided by the provider of activity. N o r can they be regarded as 'simi- the principal service. This interpretation lar' to an artistic or entertainment activity. would cover all services of an ancillary Only services which are comparable to artis- character provided by the relevant artist or tic services can be regarded as 'similar' for entertainer, rather than services which are the purposes of Article 9(2)(c), first indent: it ancillary to the provision of the relevant must be something essentially personal, artistic or entertainment service. According capable of being provided at various loca- to the Government, while the wording of tions and which does not depend on the Article 9(2)(c), first indent, is not unambigu- place of establishment of the provider. This ous in this respect, it is only this narrower is not the case with the provision of technical interpretation which would accord with equipment and operative personnel, such as the objective of the provision of allowing in the case of the plaintiff's activities: his artists and entertainers to have a single activities can be equated with the provision location for VAT purposes for all services, to a musician of a recording studio and per- principal and ancillary, which they provide sonnel, which a large majority of the repre- sentatives in the VAT Advisory Committee in the context of each performance. This considered to be governed by Article 9(1) of would have the merit of simplicity for all the Directive. 12 involved, including Member State fiscal administrations. However, in response to questions from the Court at the oral hearing, the German Government had difficulty in indicating the sorts of ancillary services that might be provided by persons engaged in artistic, entertainment, sporting and other activities governed by Article 9(2)(c), first indent. 13 O n the other hand, the German Government submitted that, if the wider view of the provision were retained, it would be difficult to limit the scope of the excep- tion to the general rule — it might extend to services minimally connected with the prin- cipal artistic or other event, such as those of 18. With regard to whether the plaintiff's hotels or restaurants, as well as to the more services can be considered to be ancillary directly-related services of stage-builders, to artistic or entertainment services, the bodyguards, make-up artists, and so on. Fur- German Government submits that this calls thermore, the reference to the words 'where for a close examination of the wording of Article 9(2)(c), first indent, of the Directive.

21. The Italian Government initially observes that the question has not been appropriately worded. Article 9(2)(c), first indent, of the Directive is not concerned with the artistic, entertainment or other char- acteristics, as such, of services. O n the con- 19. The German Government also expressed trary, according to the Government, the pro- its concern about the possibility of tax eva- vision gives Member States a wide sion if Article 9(2)(c), first indent, were to be discretionary power to determine the partic- read widely, due to the difficulty in keeping ular services which can be assimilated to track of the provision of services at a variety artistic services: in the light of the hetero- of locations. There was no evidence that the geneity of the services involved, the plaintiff had actually paid VAT in the various Community legislature could not otherwise Member States where the concerts in ques- have regulated the situation. The Italian tion took place. It would be simpler for Government proposes that the Court turnover tax to be collected by the fiscal respond to the question referred to the authorities of the State of establishment of effect that it is for the national legislatures to service-providers such as the plaintiff. determine the services that can be regarded as accessory to artistic services for VAT purposes.

The Commission

20. In so far as the second question is con- cerned, the German Government does not 22. The Commission points out, by way of consider that the fact that a service-provider introduction, that Article 9(2)(c), first indent, may have to synchronize sound effects with of the Directive is a rule designed to resolve

23. The Commission submits that the ques­ tions referred by the national court can only be answered in the affirmative. Given that the terms 'cultural', 'artistic' and 'entertain­ ment' activities are all found in Article 9(2)(c), first indent, of the Directive, 24. In response to questions from the Court without any distinction being drawn at the oral hearing, the Commission stated between them, the Commission submits that that the case did not concern attempted no particular artistic or cultural level is avoidance through reliance on Article 9(2) of required. The Commission draws further the Directive, against which Articles 21 and 22(7) provide safeguards which are operable

14 — The Commission cites the judgments of the Court in Case C-68/92 Commission ν France [1993] ECR I-5881, Case 15 — The agent for the Commission submitted at the oral hearing C-69/92 Commission ν Luxembourg [1993] ECR that at least some of the plaintiff's activities might be con­ I-5907 and Case C-73/92 Commission ν Spain [1993] sidered to be artistic or entertainment, by analogy with the ECR I-5997 (hereinafter 'the Advertising Cases') in support skill required of, and the status normally accorded to, inter of this submission. alia, record producers.

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DUDDA ν FINANZAMT BERGISCH GLADBACH

through cooperation between Member State 27. In Berkholz, the Court stated: fiscal administrations.

Consideration of the questions referred to the Court

(i) Article 9(1) and (2) of the Directive 28. In Hamann, the Court interpreted Article 9(2)(d) of the Directive in the light of its objects, in particular those of preventing distortions of competition arising from the 26. The Court has stated on a number of different VAT rates applied by the Member occasions that paragraph (2) provides for States, and of the practical need (if VAT were derogations, 16 or exceptions, 17 to a rule of to be collected) for a regime for the hiring general application, stated in Article 9(1) of out of forms of transport different from that the Directive. While the description of Arti­ applied to other equipment hire. There is no cle 9(2) in such terms is asserted by the Ger­ intimation of the priority, as a matter of man Government to imply that it should be interpretative principle, of the first paragraph strictly construed, the Court has never over the second. O n the contrary, the Court expressly adopted this approach. The Court indicated that no particular argument of has also spoken of the two paragraphs of principle supports the general rule in Arti­ Article 9 of the Directive in terms which do cle 9(1) against the more sector-specific pro­ not give rise to any such implication. visions of Article 9(2): the general rule was adopted, it said, 'for the sake of simplifica­ tion'; 1 9 however, other practical consider-

16 — See Trans Tirreno Express, cited in footnote 8 above, para­ graph 16 of the judgment. 17 — Trans Tirreno Express, cited in footnote 8 above, para­ graph 17 of the judgment; Case 51/88 Hamann ν Finan­ 18 — Cited in footnote 9 above, paragraph 14 of the judgment. zamt Hamburg-Eimsbüttel [1989] ECR 767, paragraph 17. 19 — Cited in footnote 17 above, paragraph 17 of the judgment.

30. The Court also read Article 9(2)(b) of the Directive in the light of its objects in Trans Tirreno Express, on the practical basis that transport services were a case 'where the fiction that the services are supplied at the supplier's place of establishment is inappro- priate'. 24 Transport services, which are liable 29. In the Advertising Cases, the Court to be effected on the territory of more than spoke of the Article as a whole as 'a rule of one Member State, require 'a different crite- conflict which determines the place of taxa- rion, which essentially must make it possible tion of advertising services and, conse- to determine the jurisdiction of each of the quently, delimits the powers of the Member States involved for tax purposes'. 25 The lan- States'. 22 In those cases, Advocate General guage of the Court in this case, as well as in Gulmann expressly rejected a restricted (and the Advertising Cases and in Hamann, tends linguistically tenable) interpretation of the to affirm the independent value of Arti- ambiguous term 'advertising services' in cle 9(2), alongside Article 9(1), in achieving Article 9(2)(e) of the Directive in favour of a the objects of the VAT regime. This could be wider (and equally tenable) interpretation, in undermined by the automatic application of the light of the objects of the provision. 23 Article 9(1) of the Directive in cases of

20 — The need to prevent distortion of competition, and the 24 — Cited in footnote 8 above, paragraph 16 of the judgment. interest in ease and reliability of collection. 25 — Paragraph 17 of the judgment. Furthermore, the Court implicitly rejected (as Advocate General Sir Gordon Slynn 21 — Paragraph 13 of his Opinion. did expressly, at p. 235 of his Opinion) the argument of the 22 — Cited in footnote 14 above: France, paragraph 14 of the Commission for a narrow reading of Article 9(2)(b) of the judgment; Luxembourg, paragraph 15; Spain, paragraph 12. Directive as applying only to the transport of passengers 23 — Paragraphs 14 and 19 of his joint Opinion. (see paragraph 11 of the judgment).

32. I also wish to comment on the conten­ 31. I conclude, therefore, that the provisions tion of the German and Italian Governments of Article 9(2) of the Directive should be that Member States have a discretion with read in the light of their objects. A narrow regard to the definition of the various reading of its terms should not be favoured categories of services mentioned in over a wider, equally tenable interpretation, Article 9(2)(c), first indent, of the Directive. if the latter is more consistent with those This contention does not appear to me to be objects. This position can be contrasted with sustainable. Differences between Member that relating to exemptions from the VAT States about the categorization of particular regime under Article 13 of the Directive. activities could lead to conflicts of jurisdic­ These 'are to be interpreted strictly since tion between Member States (or to denial of they constitute exceptions to the general jurisdiction by Member States), contrary to principle that turnover tax is levied on all the very purpose of Article 9 of the Direc­ services supplied for consideration by a tax­ tive. The Court stated in the Advertising able person'. 2 7 Article 9, on the other hand, Cases 'that "advertising services" is a Com­ concerns only the allocation of the place of munity concept which must be interpreted taxation, and, to the extent possible, it will uniformly in order to avoid instances of be read in order to ensure, inter alia, that double taxation or non-taxation which may result from conflicting interpretations'. 2 8 The same reasoning applies to the provisions 26 — Cited in footnote 9 above, paragraph 17 of the judgment. of Article 9(2)(c), first indent, of the Direc­ The Court continued: '[R]egard is to be had to another tive, which must also receive a Community establishment from which the services arc supplied only if the reference to the place where the supplier has established his business docs not lead to a rational result for tax purposes or creates a conflict with another Member State.' 27 — Case 348/87 Stichting Uitvoering Financiële Acties ν Staatssecretaris van Financiën [1989] ECR1737, para- 28 — Cited in footnote 14 above: France, paragraph 14 of the graph 13 of the judgment. judgment; Luxembourg, paragraph 15; Spain, paragraph 12.

33. This concludes my preliminary remarks. I will now turn to the substantive analysis of the applicable law. 35. However, it is clear that it would stretch intolerably the language of the Directive to describe as artistic or entertainment activities the plaintiff's preparations for the sound- reproduction of musical events and the arrangements for the supply of staff and equipment. As he concludes a single contract with event organizers, for the supply of all his services for a single price, it would run contrary to the interests in simplicity of administration and ease of collection (and 34. A plausible case may be made for the prevention of tax-avoidance) which the description of some of the plaintiff's activi­ Court has identified as relevant factors when ties, in the context of musical events, as interpreting Article 9 of the Directive to seek being artistic or entertainment. When he unnecessarily to separate the various ele­ operates, or guides the operation of equip­ ments of the plaintiff's business, in order to ment to achieve optimum sound level and define for each one a distinct place of supply. sound quality, and to coordinate sound and I reserve my position on whether this can visual effects, he may (as the agent for the ever be necessary, or possible (for example, Commission suggested) be compared to a in cases where the various elements of a ser­ record producer. While the instruments he vice for which a single price is charged would, taken individually, fall under differ-

29 — Sec Case C-30/89 Commission ν France [1990] ECR 1-691, paragraph 23 of the judgment; see also the Opinion of 1 February 1996 of Advocate General Cosmas in Case 30 — Many artistic or entertainment activities demand technical C-231/94 Faaborg-Gelting Linien A/S ν Finanzamt Flens­ skill as well as creative judgment, the expression of which is burg [1996] ECR 1-2395, paragraph 12. served by such skill.

37. The national court is, I think, correct in its identification of the purpose underlying the creation of a special regime for artistic, 36. If the plaintiff's preparatory activities entertainment and other similar activities and his arrangements for the supply of staff under Article 9(2)(c), first indent, of the and equipment can be defined as services Directive. As I have already indicated above, ancillary to the supply of artistic, entertain­ the national court viewed the personal nature ment or similar activities, then so too can his of the service provided as a criterion for the services in operating that equipment, and in definition of 'similar activity'. Suppliers of coordinating sound and visual effects. If the services consisting essentially of the applica­ latter are not artistic or entertainment, they tion and realization of personal qualities, would still fall within the scope of knowledge or skills could easily move their Article 9(2)(c), first indent, of the Directive. central management to low-tax locations if Indeed, it can also be plausibly argued, con­ their services were not deemed to be sup­ trary to the argument presented in the para­ plied at the place where those services are graph immediately above (but consistently physically carried out. Therefore, the plain­ with the view of the national court), that the tiff cannot be deemed to supply a service similar to artistic, entertainment, sporting or other services expressly identified in the pro­ 31 — Where a transaction has a number of elements, which taken vision, because his business is not as mobile individually might fall under different provisions of the VAT regime, the better course may be to subsume the sec­ ondary elements into the principal (if the various elements can be so distinguished). This was the course recommended by Advocate General Cosmas in paragraph 14 of his Opin­ ion in Faaborg-Gelting Linien, cited in footnote 29 above, 32 — It will emerge in the analysis that follows why I do not in which he considered the 'service' aspects of a ship-board attach the same significance to the term 'similar activities' in restaurant service to have priority over the 'goods' aspect. the provision in question.

39. The German Government argues that the object of preventing distortion of compe­ tition through the tax avoidance of highly mobile service-providers should also dictate 38. An 'ancillary service' is ordinarily under­ the interpretation of 'ancillary services', the stood, in English, to provide essential sup­ inclusion of which in Article 9(2)(c), first port to, or to be subordinate or subservient indent, is qualified by the condition 'where to, a central service or industry. 3 3 The aspect appropriate'. Thus, it submits that the term of subservience appears to predominate in 'ancillary' should be understood as relating the definition of the French term 'accessoire', to the provider of the principal service and although it can also indicate that a service so not to the principal service as such. This described is essential to, because it com­ interpretation would cover all services of an pletes, a principal service. 3 4 The German ancillary character provided by the relevant term 'zusammenhängenden' also suggests artist or entertainer, rather than all services dependence. It has not been suggested that which are ancillary to the provision of the any of the other language versions gives rise relevant artistic or entertainment service. to a different possible construction. The This would prevent the over-extensive appli­ plaintiff's services, to which the present case cation of Article 9(2)(c), first indent, and refers, comply with both meanings of the would ensure simplicity in the VAT affairs of terms 'ancillary' and 'accessoire': they pro­ the artists and entertainers involved. vide an essential and direct support to the staging of musical events, and they are

requires either that part of the legislative text tainers and others specified in the provision be treated as superfluous, or that it be inter­ are also personal in nature, and thus highly preted inconsistently with its professed mobile (as is the case in respect of promo­ objective; and it is contrary to the wider tional activities), they should, on this view, objects of Article 9(2) of the Directive. First, be defined as 'similar activities', so that the the German Government's argument is lin­ additional reference to 'ancillary services' is guistically implausible. Article 9(2)(c), first otiose. If, on the other hand, these additional indent, refers to a variety of service activities, services are not essentially personal and rather than to persons engaged in those ser­ mobile in nature, and require a stable estab­ vice activities. It seems more logical, there­ lishment, it would defeat the central (and fore, to read 'ancillary services' as being ser­ exclusive) object of the provision contended vices ancillary to those activities, rather than for by the German Government if they were as being restricted to additional activities of to come within its scope. the service-providers engaged in those prin­ cipal activities. I would not exclude from the definition additional services f r o m the m a i n service-provider merely because the exam­ ples proffered in the course of the present proceedings are unconvincing. 35 However, such services should be 'ancillary' in the sense of directly supporting that service.

44. The overall aim of Article 9(2) is to establish a special regime for allocation of the place of supply of services 'where the 43. Artistic, entertainment, cultural and cost of the services is included in the price of sporting services are consumed, in large part, the goods'. 40 The Court has indicated that by members of the public who are not tax- the same approach should apply where the able persons. 37 These services tend, however, cost of services is included in the price of a to be purchased through an intermediary, the downstream service, as is indicated in the event organizer, who will arrange the venue, quotation immediately below. If artistic or publicity, performers and (crucially for the entertainment services are provided to the provision of services for consideration) ticket public through the services of an event organ- sales. 38 They will normally be directly con- izer, and by their nature are physically pro- sumed at the place of provision, through the vided at the place of consumption, it seems simple fact of the presence of the consumer logical that these inputs into a downstream at the performance (although broadcast links service provided to the public at that place may also permit consumption in other be subjected to a single VAT regime and, to the greatest extent possible, to a uniform rate of turnover tax at the point of provision, 36 — This appears to be the case in respect of the organizer of which will also be the rate applied to the one of the events to which the plaintiff contributed, who was established in Germany although the event took place elsewhere. Sec footnote 4 above. 37 — This is less true, I think, of educational services, and prob- ably much less so of scientific services. However, I do not 39 — Where an event is broadcast, even in the case of 'pay-per- seek to set out a comprehensive analysis of all the objects view' broadcasts, it is the broadcaster who will pay the served by the provision in question; I am concerned only organizer for the right to transmit coverage of the event. I with those which are relevant to the present case. do not examine here the question of where the broadcasting 38 — I omit for present purposes the possibility that the mount- of services governed by Article 9(2)(c), first indent, of the ing of an artistic or other event is partially funded by spon- Directive is deemed to occur. I also exclude from the sorship, franchise or advertising revenues. Such transactions present analysis questions arising from the provision of may be better governed by the provision on 'advertising artistic or entertainment services for recording purposes, services' in Article 9(2)(e), second indent, of the Directive, which services are ultimately consumed by the public only which, as wc have seen, is widely interpreted. Such financial after the distribution of discs, cassettes or other media support should not, in any event, undermine the descrip- which can be classified as goods for the purpose of turnover tion of how artistic or other services are provided to the tax. public for gain (provided some entry charge is paid). 40 — Seventh recital in the preamble to the Directive.

45. As regards administration of turnover tax in the place where the principal artistic or 46. This analysis should, at least, apply where the essential support services for the event in question share in the mobility of the 41 — Cited in footnote 14 above: France, paragraph 15 of the judgment; Luxembourg, paragraph 16; Spain, paragraph 13. principal artists and entertainers. By this I Emphasis added, to highlight the applicability of the prin­ mean that, even if they require a fixed estab­ ciple to downstream services as well as goods. The principle actually operates more clearly under Article 9(2)(c), first lishment in one place for logistical purposes, indent, of the Directive than under Article 9(2)(c), as the principal and appropriate ancillary input services will as such services are not as intrinsically per­ always be taxed at the place of provision and consumption. sonal as those of the principal service- 42 — Advocate General Gulmann highlighted these kinds of con­ siderations in paragraph 20 of his Opinion in the Advertis­ providers, the service in question (with the ing Cases: 'There is also a more practical reason for prefer­ exception of preparatory or incidental mat­ ring this interpretation of the term "advertising services". It prevents advertising agencies from dividing up the invoices ters) is physically provided at the place which they send to their clients into, on the one hand, those relating to advertising services in the narrow sense and on where the principal event occurs and is 'con­ which VAT is payable in the client's country of residence, sumed'. Furthermore, the plaintiff's services and, on the other, those which arc not regarded as relating to advertising services and on which VAT is payable in the conform to a relatively narrow definition of advertising agency's own country of residence.' The prob­ lem was exacerbated in that case because the recipient of an what is ancillary, as they are directly, physi­ agency's services which were not defined as advertising ser­ vices was not able in all cases to obtain reimbursement of cally necessary to the presentation of the VAT paid in respect of them in another Member State. artistic or entertainment events to which

47. It is not necessary, for the purposes of the present case, to examine the appropriate- ness of extending the scope of Article 9(2)(c), first indent, of the Directive to providers of essential services which are entirely carried out at places other than the place of perfor- mance of the principal artistic or other ser- vice, or at only one place. Furthermore, I am mindful of the concern of the German Gov- ernment that 'ancillary services' should not 48. As was indicated above, 4 5 sec- be so defined to have virtually unlimited tion 3a(2)(3)(a) of the UStG does not reproduce the reference to ancillary services in Article 9(2)(c), first indent, of the Direc- 43 — The reference in the English version of Article 9(2)(c), sec- tive. However, the national court stated in ond indent, to 'ancillary transport services, such as loading, unloading, handling and similar activities' supports the clas- the order for reference that if the plaintiff's sification as 'ancillary' of activities which provide a direct, services were deemed to fall within the scope f)hysical support to the principal service. However, not all anguage versions use the same terms in both cases; for of the latter provision, the rules of the example, the German version employs the term 'zusam- menhängenden Tätigkeiten' in the first indent of Article 9(2)(c) of the Directive, and 'Nebentätigkeiten' in the second. O n the other hand, the French version uses the term 'accessoire' in both cases. The inclusion of the plain- tiff's entire service within the scope of Article 9(2)(c), first 44 — As these presumably have a fixed establishment from which indent, of the Directive is also reinforced by the fact that a their services arc supplied at the place where the artistic or number of its individual elements, such as the hiring out of entertainment event takes place, the application of Arti- equipment and the supply of staff, would be subject, if cle 9(1) and Article 9(2)(c), first indent, of the Directive undertaken alone, to other special arrangements under Arti- should have precisely the same effect. cle 9(2), paragraphs (d) and (c) respectively. 45 — Sec footnote 3 above.

This conclusion applies where the service in question consists in choosing and operating the equipment used and adjusting it to the particular acoustic conditions and the desired sound effects and also supplying the requisite equipment and the necessary operating staff, as well as where it consists, in addition, in coordinating the sound effects to be produced with his assistance with certain visual effects pro­ duced by other persons.

46 — See generally Case 14/83 Von Colson ν Land Nordrhein- Westfalen [1984] ECR 1891; Case C-106/89 Marleasing ν La Comercial Internacional de Alimentación [1990] ECR I-4135.

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