C-370/95

2. It is apparent from the order for reference in Case C-370/95 (hereinafter 'the order for reference') and the submissions of the appli- cants 2 that the questions referred by the 4. The characteristics of the two taxes are largely the same, as is apparent from the * Original language: French. 1 — Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uni- form basis of assessment (OJ 1977 L 145, p. 1). 3 — Case C-370/95. 2 — Page 2, paragraph 1, of the French translation of their writ- 4 — Cases C-370/95 and C-372/95. ten submissions. Although the questions referred by the 5 — See, in particular, page 6, point 6, and page 7, point 7, of the national court arise in three separate national proceedings, English translation of the order for reference (Case only Carcda SA and Femara have intervened in this case. C-370/95).

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following provisions of Law N o 5/1990 6 gambling, are accountable for the tax. The introducing the supplementary levy: taxable base is the gross revenue which casi- nos derive from gambling or the sums which players spend on gambling in the various buildings, places . of business or premises where games of chance, betting or gambling ' 1 . The supplementary levy applies to auto- are organized. matic type " B " or " C " 7 gaming machines and devices ... in respect of which the fiscal levy for 1990 fell due before this law entered into force.

6. The fiscal levy on gambling applies throughout the territory of Spain when the gambling is authorized or, failing that, 9. As regards the rate of the fiscal levy on organized. Organizers and undertakings, gambling, the national court states that 'there whose activities include the organization of is a general reference rate, which was origi- nally applied, of 20% on the income obtained ... which at a later stage was deferred by the application of charges sup- 6 — Law of 29 June 1990 (BOE of 30 June 1990, p. 3587). 7 — Law N o 5/1990 distinguishes amusement machines with posedly fixed in proportion to the turnover winnings (type 'B') and gaming machines (type 'C'). According to the explanations given at the hearing by the from the machine.' " The rate of the supple- applicants, type ' B ' machines marie ¡t pessime to win sums mentary levy is obtained by calculating the of money corresponding to a legally established minimum of 6 0 % of the sum played. The level of winnings of type ' C ' machines is higher and they may only be used in casinos. 8 — Article 38(2), point 2, of Law N o 5/1990, which amends 11 — Page 7, point 6, of the English translation of the order for Article 3(4) of Royal Decree Law N o 16/1977 of 25 Febru- reference. Article 38(2), point 1, of Law N o 5/1990 ary 1977 (BOE of 7 March 1977, p. 780). amended Article 3 of Decree Law N o 16/1977 by substitut- 9 — Pages 6 and 7 of the English translation. ing a fixed annual rate of PTA 375 000 for the rate of 20% 10 — Article 3 of Decree Law N o 16/1977. in respect of type ' B ' machines.

13. The Court has consistendy held that Article 33 'does not preclude the mainte- 'Without prejudice to other Community nance or introduction of stamp duties or provisions, the provisions of this directive other kinds of taxes, duties or charges which do not have the essential characteristics of VAT'. 1 7 Member States are even permitted 12 — Article 38(2X point 2(3), of Law N o 5/1990 provides that 'the amount of the tax is equal to the difference between the fixed rates set out in point 1 above and those specified by Decree Law N o 7/1989 of 29 December'. In respect of type 'B' machines, this amount is therefore the difference 15 — Page 7 of the French translation of the written submissions. between the fixed rate of PTA 375 000 and that of PTA 16 — Sec, in particular, page 15 of the French translation of the 141 750 (Article 39 of Decree N o 7/1989, BOE of 30 December 1989, p. 8325). written submissions of the Spanish Government, and page 12 of the French translation of the written submissions of 13 — Page 12 of the French translation of its written submissions. the Commission. 14 — Page 3, paragraph IV, of the English translation of the order 17 — Sec, recently, Case C-208/91 BeauLmde [1992] ECR 1-6709, for reference. paragraph 13.

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to apply taxes, duties or charges other than raises the question whether the fact that no turnover taxes concurrently with VAT. 18 document is issued to record the passing on affects the character of the Spanish taxes.

18 — Case 73/85 Kerrutt [1986] ECR 2219, paragraph 22, and Joined Cases 93/88 and 94/88 Wisselmk and Others [1989] E C R 2671, paragraph 14. 19 — Page 9, point 10, of the English translation of the order for reference. It should be noted that the applicants in the main proceedings also refer to the case-law of the Tribunal (2) May a tax which is levied as a fixed Supremo. As it held in its judgment of 19 December 1990, as cited on page 6, point 2, of the French translation of their charge of a large amount on the total written submissions, 'there is no doubt that the person ulti- turnover or revenue generated and mately accountable for the tax is the player, on to whom the fiscal burden is passed'. According to the judgments of which takes account of such turnover, if that court of 23 February and 5 May 1990, which are also cited by the applicants in the main proceedings, 'the it is ultimately paid by the consumer, be so-called "fiscal levy" on type " B " gaming machines is a regarded as a turnover tax although fixed annual rate calculated on the basis of the presumed yield of the machine'. there is no express record (invoice) 20 — Page 10 of the English translation of the order for reference. of passing on the tax to the consumer, The Audiência Nacional sutes that 'this concept of passing on gives rise to the doubts which have been set out below*. the transactions in question being

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CAREDA AND OTHERS v ADMINISTRACIÓN GENERAL DEL ESTADO

automatic, by the use of coins, and there above, 2I makes it clear that the Audiencia being a price for use. As so framed, does Nacional considers itself to be sufficiently it infringe Article 33 of the Sixth Direc- informed as to the existence and scope of tive 77/388/EEC on value added tax and some of the criteria laid down by the Court is it therefore incompatible with that to be able to interpret Article 33 of the Sixth directive?' Directive.

18. It is true that the last sentence of the sec- ond question, which is drafted in general terms, relates to the compatibility with Article 33 of the Sixth Directive of a tax exhibiting the characteristics of the fiscal charge on gambling and the supplementary 21. The Court has consistendy held, as levy. The wording of that sentence does not regards the extent of its jurisdiction in pro- make clear whether the national court's ceedings for a preliminary ruling, that 'the question is limited to that part of the Court's considerations which may have led a national interpretation of Article 33 which makes the court or tribunal to its choice of questions as passing on of the tax to the consumer part of well as the relevance which it attributes to the definition of turnover tax, or whether it such questions in the context of a case before also relates to the criteria applied by the it are excluded from review by the Court of courts when considering national taxes with Justice'. 2 2 Therefore, I do not consider it regard to Article 33 which were not men- appropriate for the Court to rule, as the tioned in the order for reference, or whether interveners suggest, on the relevance of the it simply concerns the interpretation of reasoning of the national court which led it Article 33 as a whole. to consider certain elements of the definition of turnover tax to have been established,

21 — See point 14 of this Opinion. 19. That uncertainty is dispelled on reading 22 — Cue 26/62 Van Gend en Loos [1963] ECR 1, 11. Sec ilso Casc 83/78 Pigs Marketing Board [1978] ECR 2347. para- the order for reference, which, as indicated graph 25.

26. Article 33 of the Sixth Directive is intended to ensure the coherence and conti- nuity of the common system by only autho- rizing taxes other than those which meet the 24. The first VAT directive 23 (hereinafter definition of turnover tax to be laid down by the 'First Directive') lays down the basic principles or that system. It states tnat tne aim of the system is 'to achieve such harmo- 24 — Third recital in the preamble to the directive. 25 — Fourth recital in the preamble to the directive. 26 — Second Council Directive 67/228/EEC of 11 April 1967 on the harmonization of legislation of Member States concern- 23 — First Council Directive 67/227/EEC of 11 April 1967 on ing turnover taxes — Structure and procedures for applica- the harmonization of legislation of Member Sutes concern- tion of the common system of value added tax (OJ, English ing turnover taxes (OJ, English Special Edition 1967, p. 14). Special Edition 1967, p. 16).

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Community law. The goal of harmonization vices in a way comparable to VAT if they would not be achieved if Member States exhibit the essential characteristics of VAT'. 2S were permitted to charge both VAT and other taxes and charges having the same characteristics.

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31. Therefore, a turnover tax, within the 34. That is apparent, moreover, from an meaning of Article 33 of the Sixth Directive, analysis of the VAT system. The concept of is one •which may be passed on to the con- 'passing on to the consumer' is one of the sumer. That being so, is it necessary for the characteristics of that tax, even though it is law to state this expressly? not expressly mentioned in the definition set out in the First Directive. That directive only refers to VAT as a tax 'on consumption' in order to express the idea that it is payable in respect of the transfer of goods or the provi- sion of services, not to indicate that liability IV — Express reference in the law to the for the tax transfers to the person receiving concept of 'passing on the tax to the con- the goods or services. From the above, it fol- sumer' lows that, what matters, more than the wording of the law itself, is the fact that the mechanism established enables a trader, in his dealings with consumers, to incorporate in the price charged, or to add to it, the amount of tax paid by him in respect of that 32. I do not accept the argument that a tax transaction, in such a way that the fiscal bur- may not be passed on, or that this should be den is not borne by him. considered to be the case, simply because a piece of legislation, such as the Spanish law at issue, does not expressly provide for it.

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national law does not expressly refer to the VAT, an invoice is evidence of the right to criteria defining turnover tax is not relevant deduction. It enables a taxable person to set in determining whether a particular tax is against the tax payable in respect of goods compatible with Article 33 of the Sixth produced or services rendered by him, the Directive'. 34 tax paid on each element of the cost price. In respect of the provision of most services, Article 18(l)(a) of the Sixth Directive makes the right to deduction subject to the taxable person holding an invoice drawn up in accordance with Article 22(3). V — Absence of documents recording the passing on of the tax to the consumer

36. Although satisfied that the taxes are passed on to the consumer and that they are 39. Article 22(3)(a) requires an invoice to be proportional to turnover, the national court issued in two circumstances: first, in respect none the less raises the question whether of goods and services supplied by a taxable those criteria are sufficient for the taxes to be person to another taxable person and second, characterized as turnover taxes, since there is in respect of payments on account made to a no express record of their being passed on to taxable person by another taxable person, the consumer. before the supply of goods or services is effected or completed.

37. It is not possible in practice for an invoice or other document serving as invoice to be issued to users of gaming machines because of the automatic and repetitive 40. In the field of VAT, therefore, the nature, over a short period of time, of the requirement that an invoice should be issued activity in respect of 'which tax is charged. does not concern dealings between a person providing services and the final consumer. Final consumers are not considered to be 'taxable persons' within the meaning of the Sixth Directive 3 5 and may not therefore

claim the right to deduction, so that the issue above, a tax which is levied as a fixed charge of an invoice would serve little purpose in of a large amount on the total turnover or that respect. The issue of an invoice cannot revenue generated and which takes account therefore constitute an obligation character- of such turnover may be regarded as a turn- izing turnover tax applicable to dealings over tax, even though there is no express between organizers of gambling and users of record of the tax being passed on to the con- gaming machines. sumer, it is on condition that the other crite- ria enabling the tax to be classified as a turn- over tax are also met. In addition to the matters raised in its decision, therefore, the national court must establish: 41. As worded, the question also expresses the idea that, in the absence of proof, the tax might be deemed not to be passed on to the consumer, notwithstanding that it actually is passed on. I do not accept that the condition — that the tax has a general character, which that the tax is to be passed on to the con- implies that it applies to every transaction sumer is not fulfilled merely because no pro- concerning the transfer of goods or the vision is made for any document to record provision of services; the fact, since the court could determine for itself whether that condition is fulfilled by analysing the way in which the tax at issue operates, which would reveal that the taxable person is able to pass it on. — that it is collected at each stage of the production and distribution process;

added tax: uniform basis of assessment and, in particular, Article 33 thereof, is to be interpreted as meaning that it is not necessary for a national law introducing a tax expressly to mention the possibility of 'passing the tax on to the consumer' in order for the passing on to be recognized as one of the essential characteristics of turnover tax. It is sufficient for that law to permit the tax to be passed on to the consumer, or at least not to prevent it.

The Sixth Directive (77/388) and, in particular, Article 33 thereof, is to be inter- preted as meaning that the classification as a turnover tax of a tax which is passed on to the consumer, is levied as a fixed charge of a large amount on the total turnover, and takes account of such turnover, is not subject to the requirement that the person providing services should draw up an invoice, or other document serving as invoice, which expressly records the passing on of the tax to the consumer.

The Sixth Directive (77/388) and, in particular, Article 33 thereof, is to be inter- preted as meaning that it only prevents the introduction or maintaining of a national tax exhibiting the features set out above if that tax has a general character, is charged at each stage of the production and distribution process and is imposed on the added value of services.

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