C-167/95

LINTHORST, POUWELS AND SCHERES ν INSPECTEUR DER BELASTINGDIENST

OPINION OF ADVOCATE GENERAL FENNELLY delivered on 28 November 1996

1. The Court is asked in this preliminary fixed establishment from which the service is reference to interpret the scope of certain supplied or, in the absence of such a place of provisions of Article 9 of the Sixth VAT business or fixed establishment, the place Directive. 1 The question referred essentially where he has his permanent address or usu­ requires the Court to decide where the pro­ ally resides. vision of veterinary services to cattle-farming undertakings in one Member State (Belgium) by a veterinary partnership, which is estab­ lished in business and has its fixed establish­ ment in another Member State (the Nether­ lands), should be regarded as having been supplied for VAT purposes. 2. However:

I — Legal and factual context

...,

2. The relevant provisions of Article 9 of the Sixth Directive are as follows: (c) the place of the supply of services relat­ ing to:

'In order to avoid double taxation, non- taxation or the distortion of competition the Member States may, with regard to the sup­ ply of services referred to in [Article 9] 2(e) ..., ... consider:

(e) the place where the following services are supplied when performed for cus­ (a) the place of supply of services, which tomers established outside the Commu­ under this Article would be situated nity or for taxable persons established in within the territory of the country, as the Community but not in the same being situated outside the Community * country as the supplier, shall be the place where the effective use and enjoyment of where the customer has established his the services take place outside the Com­ business or has a fixed establishment to munity; which the service is supplied or, in the absence of such a place, the place where he has his permanent address or usually resides:

(b) the place of supply of services, which under this Article would be situated out­ side the Community, as being within the territory of the country where the effec­ tive use and enjoyment of the services take place within the territory of the country.'

— services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar ser­ vices, as well as data processing and the supplying of information, 3. According to the Gerechtshof, 's-Herto- genbosch (Regional Court of Appeal, 's-Hertogenbosch, hereinafter 'the national court'), the Wet op de Omzetbelasting 1968 ' (Law on Turnover Tax 1968, hereinafter

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5. Linthorst claimed before the national court that the place where the Belgian ser­ vices were supplied should, pursuant to the third and fourth indents of Article 9(2)(c) of the Sixth Directive, be regarded as the place where they were physically carried out, which was in Belgium. In the alternative, it submitted that under Article 9(2)(e), the place of supply should be deemed to be the 4. The partnership, Linthorst, Pouwels and place where the customers had established Scheres, the appellant in the main proceed­ their places of business, which, equally, was ings, is established at Ell in the Nether­ in Belgium. The tax authorities submitted lands. 3 It operates a general veterinary prac­ that the main rule in Article 9(1) was appli­ tice through its partners, all of whom are cable and that the partnership was correctly veterinary surgeons. For VAT purposes, it is subjected to VAT on the Belgian services at considered an undertaking (ondernemer) its place of establishment in the Netherlands. within the meaning of Article 7 of the Law. During February 1994 (hereinafter 'the rel­ evant tax period'), it charged cattle farmers, established in Belgium and with no fixed establishment outside Belgium, a total of H F L 5 110 for veterinary services. The ser­ vices (hereinafter 'the Belgian services'), which did not include the supply of medica­ ments, related to animals located in Belgium 6. The national court points out that, since and were performed by the partnership in the place where a service is deemed to be Belgium. For the relevant tax period, the supplied under Article 9 of the Sixth Direc­ partnership included, in its overall declara­ tive circumscribes the power of a Member tion of liability to VAT of H F L 32 037, a State to tax that service, a Community-law sum of H F L 894, which represented VAT at interpretation of that provision is necessary 17.5% on the amount of H F L 5 110 invoiced so as to obviate situations of either double for the Belgian services. The partnership, taxation or non-taxation to which divergent having made an unsuccessful administrative national interpretations might give rise. Whilst unconvinced that any of the provi­ sions of Article 9(2) invoked by the partner­ ship in the present case was applicable, the 2 — Reference is made to a law of 28 December 1978, Staatsblad national court, noting that the Belgian 677. 3 — I shall refer to it either as 'Linthorst' or 'the partnership'. authorities are of the view that the fourth

II — Observations

'It follows that, when Article 9 is interpreted, Article 9(1) in no way takes precedence over

7. Written observations were submitted by 4 — Case C-327/94 Jürgen Dudda ν Finanzamt Bergach Glad­ Linthorst, the Kingdom of the Netherlands, bach [1996] ECR I-4595, paragraph 20 of the judgment (hereinafter 'Dudda'). the Federal Republic of Germany, the Italian 5 — In this respect, therefore, the emphasis placed on behalf of Republic and the Commission, who, with Italy and the Netherlands on this interpretative approach is mistaken. the exception of Linthorst and Germany, 6 — Dudda, paragraph 20 of the judgment. also submitted oral observations. 7 — Ibid., paragraph 21 of the judgment.

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Article 9(2). In every situation, the question insignificant proportion of the services of which arises is whether [a transaction] is veterinary surgeons are supplied to individu­ covered by one of the instances mentioned in als so that there is no supply between taxable Article 9(2); if not, it falls within the scope of persons, even if, as I shall discuss later, vet­ Article 9(1).' erinary services are to be included in Article 9(2) (e), third indent. However, this does not appear to arise on the facts of the present case, where the supplies are to cattle farmers.

11. The first submission advanced by the 8 — The seventh recital states that: '... the determination of the interested party is that the Belgian services place where taxable transactions are effected has been the may be classified as 'valuations of movable subject of conflicts concerning jurisdiction as between Mem­ ber States, in particular as regards supplies of goods for tangible property'. This argument is based, assembly and tne supply of services; ... although the place where a supply of services is effected should in principle be in the first instance, on the Dutch text of the defined as the place where the person supplying the services third indent of Article 9(2)(c) of the Sixth has his principal place of business, that place should be defined as being in the country of the person to whom the Directive, and in particular the words 'in services are supplied, in particular in the case of certain ser­ vices supplied between taxable persons where the cost of the verband met', which may be rendered in services is included in the price of the goods ...'. English as 'in connection with' or in French 9 — D udda, paragraph 23 of the judgment It is clear from para­ graph 24 of the judgment that tne same rationale applies to as 'en rapport avec'. In fact, the English the supply of services whose cost is included by the recipient employs the words 'relating to' and the 'in the price of the complete service paid for by the final consumer ...'. French text reads 'ayant pour objet'. Both of

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these imply a purposive link between the ser- (ii) — Article 9(2)(c), fourth indent — work vices provided and the valuation of the prop- on movable tangible property erty. I accept the classification of animals as 'movable tangible property', since the civil law of most legal systems regards the owner- ship of animals as similar to the ownership of inanimate chattels. However, I agree with the national court that the services envisaged by the draftsman were those of experts in valuation work, such as insurance claims assessors, and not those of experts in animal health care.

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national court would confine the fourth pursuit, none the less, of the objective of a indent to work on movable tangible prop­ uniform Community interpretation. erty itself and, supported by Germany, takes the view that the provision should not be interpreted too broadly, since such an inter­ pretation would have the effect of rendering the third indent redundant.

12 Article 28(3)(b) to maintain, for a period, any existing ship contends. It is true that the Court has national exemptions of such services from VAT. This autho rization was, however, repealed by Article 1 of the Eigh occasionally interpreted a provision of the teenth Council Directive 89/465/EEC of 18 July 1989 on the harmonization of the laws of the Member States relating Sixth Directive by emphasizing in particular to turnover taxes — Abolition of certain derogations pro one of its authentic texts, where that is not in vided for in Article 28(3) of the Sixth Directive, 77/388/EEC; OJ 1989 L 266, p. 21. conflict with the others, 13 but always in 15 — Reference is made, inter alia, to the provisions of VAT exemptions on the temporary importation of goods into the Community.

. . in order to be given veterinary treatment'. Such Belastingdienst Grote Ondernemingen [1996] ECR 1-1721, specific references to veterinary services indicate, in its paragraph 24 of the judgment, where the Dutch text, sup view, that, had the legislator wished to include such services ported by the punctuation in three other texts, was relied within the scope of the fourth indent, it would expressly upon. have done so.

18. I am satisfied that the work of veterinary surgeons should be viewed globally and by reference to the common understanding of the nature and purpose of that work, and not 17. The work of veterinary surgeons in its by reference to the incidental fact that actu­ common social understanding comprises ally it involves work on animals. The mere much more than merely the physical treat­ fact that some of the work effected by the ment of animals. As noted in footnote 14 partnership may involve, in a purely literal above, the Community legislature initially sense, work on movable tangible property granted Member States the possibility of cannot, in my opinion, affect this approach. exempting 'the treatment of animals by vet­ The physical aspects of the examinations and erinary surgeons' (emphasis added). More­ operations carried out on animals by veteri­ over, under Article 13(A)(1)(c), Member nary surgeons, as part of the service provided States are, without any limitation as to time, to their clients, do not exhaustively define required to exempt 'the provision of medical the nature of that service, since they presup­ care in the exercise of the medical and para­ pose the intellectual qualification, experience medical professions as defined by the Mem­ and judgement of the relevant practitioner. I ber States concerned'. In my opinion, these am therefore convinced that it. cannot be specific references to 'treatment' and 'care' classified as coming within the fourth indent of Article 9(2)(c).

16 — The Commission cites paragraphs 19 and 20 of the judg­ ment in Case 139/84 Van Dijk's Boekhuis ν Staatssecretaris van Financiën [1985] ECR 1405in support of this 17 — Case 122/87 Commission ν Italy [1988] ECR 2685, para­ approach. graph 9 of the judgment.

19. Finally, Linthorst argues that veterinary services should be included as 'similar ser­ vices' in the expression 'services of consult­ ants, engineers, consultancy bureaux, law­ yers, accountants and other similar services' in the third indent of Article 9(2)(e) of the Sixth Directive. The national court is of the 'cultural, artistic, sporting, scientific, educa­ view that, in the light of the difference in tional, entertainment or similar activities, nature between the whole of the services including the activities of the organizers of provided by a veterinary surgeon and the such activities, and where appropriate, the services provided by 'consultants' or 'other supply of ancillary services ...'. similar services', veterinary services cannot fall within that provision. The partnership submits that its services may, by reference both to the extensive meaning of the concept of advice and the partially advisory nature of veterinary services, be regarded as at least similar to those of consultants. Germany contends that, whereas the list of activities enumerated in Article 9(2)(e), third indent, comprises only those which are carried out in an independent manner, it does not follow that all such activities should be regarded as falling within its scope; if the legislator had wished to include the services habitually It is important to emphasize that the techni­ provided by veterinary surgeons, it would cal acoustic and sound engineering services have done so expressly. at issue in that case were held to be 'ancil­ lary' to the artistic or entertainment nature of the principal activities. In its judgment in Dudda, the Court thus made brief reference only to the phrase 'similar activities' and stated that 'it is not only services relating inter alia to artistic and entertainment activi­ ties but also services relating to merely simi- lar activities that fall within its scope'. 18 20. At first sight, there is no obvious answer to this dilemma. The reason for excluding these services from Article 9(2)(c) is, at least 18 — Paragraph 25 of the judgment (emphasis added).

21. I do not find it easy to interpret the services pursuant to Article 13(A)(1)(c). expression 'merely similar activities'. 19 Pre- They would, if included, undoubtedly have sumably, the Court is saying that it is been 'similar' to veterinary services. In the enough for activities to be 'similar' to artistic result, there is no class of activity in the cata- or entertainment activities to bring them logue which is 'similar' to the normal activi- within the indent. The Court does not, on ties of a veterinary surgeon, and, in my opin- the other hand, seek to establish, in the terms ion, no common element other than the of the first indent, any class or genus of unsatisfactory notion of liberal professions activities such as could call for the applica- can be identified to which those activities tion of the ejusdem generis principle of con- could be assimilated. struction. 20 The application of that principle presupposes that it is possible to identify, from the matters enumerated in the legal text under scrutiny, a genus which precedes the general words. 21 The search is essentially for a sufficiently common element to permit the identification of a recognizable class.

An inter- pretation which seeks to compare the myriad of possible forms of modern consultancy work with the social and intellectual prestige — based generally on high standards of edu- 22. Indeed — as I have already stated in cational attainment and strict regulation of respect of the fourth indent of ethical and professional behaviour — of the Article 9(2)(c) 22 — and having regard to the traditional liberal professions would strain express transitional exemption expressly pro- considerably the language of the indent. The vided pursuant to Article 28(3)(b) and omission of medical services, of course, Annex F to the Sixth Directive for the treat- flows naturally from the exemption of such ment of animals by veterinary surgeons, if the legislator had wished to include the ser- vices of veterinary surgeons in the indent, as it clearly did with the services of lawyers, it 19 — For example, the French text of the judgment reads: 'des would expressly have done so.

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In the absence of a genus in the indent, as covering veterinary services. It does not, discussed in the preceding paragraph, it is for example, indicate that the draftsman necessary to examine whether such veteri­ intended that all professional or otherwise nary activities are similar to any of the activi­ independently provided services that are ties listed in the indent. The reference to supplied on an intra-Community basis 'other similar services' cannot be construed between taxable persons should, in the as a reference to the professional status of words of Article 9(2)(e), be taxed at 'the the service providers of some of the services place where the customer has established his business or has a fixed establishment'. Fur­ listed, such as lawyers — since both veteri­ thermore, the seventh recital in the preamble nary surgeons and lawyers could broadly be to the Sixth Directive 2 6 is also of little assis­ classified as members of liberal professions tance, since it indicates, as the Court con­ — but, on the contrary, must be interpreted firmed in D udda, that the objective of the as only covering those services which are alternative rules set out in Article 9(2) is 'to similar — in terms of the concrete aspects of establish a special system for services pro­ the service actually provided — to any one vided between taxable persons where the of the preceding expressly listed service cost of the services is included in the price of activities. The similarity, such as it is, the goods'. 2 7 The mere fact that the Belgian between the nature of the services provided services were probably incorporated by the by veterinary surgeons and those of consult­ recipients into the price of the 'goods' which ants, or 'consultancy bureaux' in particular, they later supplied to other parties cannot that arises from the advisory aspects of some of the work of veterinary surgeons is not sufficient, in my opinion, to bring them within the scope of the indent.

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alone determine that the place of supply of such rather than in a specialist advisory those services was Belgium. capacity, cannot be interpreted as falling within the third indent of Article 9(2)(e).

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27. Moreover, it has not been suggested that place of supply of its services must be where the partnership in this case has a fixed estab­ it has established its business, namely, as the lishment outside the Netherlands, whether in national court has already found, in the Belgium or elsewhere. It follows that the Netherlands.

IV — Conclusion

28. Accordingly, I recommend that the question referred by the Gerechtshof, 's-Hertogenbosch be answered as follows:

Article 9 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmo­ nization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, should be interpreted as meaning that the place where a veterinary surgeon who provides his services in more than one Member State should be deemed to supply his services is the place where he has established his business, unless the supplier has a fixed establishment in another Member State and provides the relevant services from that fixed estab­ lishment.