C-60/96

COMMISSION v FRANCE

OPINION OF ADVOCATE GENERAL COSMAS delivered on 20 March 1997 *

1. This case concerns an action brought by entitled 'Exemptions within the territory of the Commission under Article 169 of the the country', provides as follows: Treaty against the French Republic for fail­ ure to fulfil its obligations under Article 2 of the Sixth VAT Directive 1 in respect of the tax treatment of the letting of tents, caravans or mobile homes. 'B. Other exemptions

I — The Sixth Directive Without prejudice to other Community pro­ visions, Member States shall exempt the fol­ lowing under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible evasion, avoidance or abuse: 2. Article 2(1) of the Sixth Directive pro­ vides that the supply of goods or services effected for consideration within the terri­ tory of the country by a taxable person act­ ing as such is to be subject to VAT. (a) [...]

(b) the leasing or letting of immovable prop­ erty excluding:

3. Title X concerns exemptions for certain activities. Section B of Article 13, which is

Member States may apply further exclusions to the scope of this exemption;

4° The occasional, permanent or seasonal letting of accommodation which is furnished or fitted for residential use. 2 ...'.

However, the exemption does not apply to: II — The national legislation at issue

[...]

4. In France the supply of services for con­ sideration by a taxable person acting as such is subject to VAT by virtue of Article 256 of the Code General des Impôts (General Tax (b) The provision of furnished or fitted pre­ Code; hereinafter 'the Code'). mises where the operator supplies — in addition to overnight accommodation — breakfast, the daily cleaning of the pre­ 2 — The last subparagraph of Article 4(3)(a) of the Sixth Direc­ mises, the supply of household linen and tive states that 'a building', as used in the directive, shall be taken to mean 'any structure fixed to or in the ground'. reception facilities for clients, and is

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6. According to an administrative circular of 11 April 1991, issued by the French fiscal legislation department, 3 concerning the scope of VAT, exemptions therefrom and the 8. The French Government denied the 4 letting of accommodation furnished or fitted Commission's charges. Specifically, it main­ for residential use: tained that, in certain circumstances, the pro­ vision of caravans and mobile homes cannot be assimilated to the letting of movable property since they constitute genuine fixed installations with no permanent means of locomotion, within the meaning of the crite­ ria laid down by the French Conseil d'État. '[C]aravans, tents, mobile homes and light- Furthermore, the national legislation at issue framed leisure dwellings which are genuine prevented any distortion of competition as a fixed installations, specially adapted for resi­ result of applying a different tax treatment to dence and used exclusively as living quarters, persons letting caravans and mobile homes, must also be regarded as residential premises, on the one hand, and persons letting immov­ whereas the letting by the hour, day, week or able property, which is exempt from VAT, on month of touring caravans, camper vans, the other. barges, boats and so on must be regarded as the letting of corporeal movable property which is compulsorily subject to VAT ...'.

9. Unconvinced by the French Govern­ ment's arguments, the Commission sent it a 7. In the Commission's view, by exempting reasoned opinion on 8 November 1994 fur­ from VAT the letting of certain forms of ther explaining the reasons why it considered movable property (tents, caravans, mobile

10. In its reply to the reasoned opinion, fol­ lowing an experts' report on the letting of tents, caravans and mobile homes for resi­ dential use, the French Government con­ 5 curred with the Commission's position. It also undertook to rescind the contested 12. The Commission maintains that it administrative circular of 11 April 1991 and received no official notification that the to lay down detailed rules for the levying of French legislation at issue had been VAT on such lettings. Lastly, it stated that amended. However, it was informed that the the measures taken following consultations French authorities were continuing to give with the operators concerned would be com­ effect to the circular of 11 April 1991, on the municated to the Commission as soon as basis of which taxable persons supplying the possible. services concerned had been issued with revised VAT assessments. Consequently, tak­ ing the view that the letting of tents, caravans or mobile homes must be subject to VAT, the

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COMMISSION v FRANCE

Commission brought an action against the III — Form of order sought by the Com­ French Republic on 5 March 1996 for failure mission to fulfil its obligations.

15. In its application, the Commission claims that the Court should:

13. The French Government states that on 10 April 1996 it sent to the office of the French Permanent Representative to the European Communities, for onward com­ (a) declare that, by introducing and main­ munication to the Commission, written noti­ taining in force an administrative provi­ fication of the legislative amendments indi­ sion extending to the letting of certain cating that the new provisions would enter forms of movable property the exemp­ into force on 1 January 1996, the date on tion from VAT which is restricted by which the provisions of the administrative Community law exclusively to the let­ circular in question ceased to have effect. ting of immovable property, the French Republic has failed to fulfil its obliga­ tions under Article 2 of Council Direc­ tive 77/388/EEC of 17 May 1977 (Sixth VAT Directive);

(b) order the French Republic to pay the 14. Moreover, a circular of 18 July 1996 costs. entitled 'Reduced rate applicable to the sup­ ply of accommodation on camping sites', drafted by the fiscal legislation department of the French Ministry of Economic and Financial Affairs, further established that the provision of tents, caravans, mobile homes IV — Findings and light-framed leisure dwellings on regis­ tered camping sites would thenceforth be subject to VAT at the normal rate, although it could be subject to a reduced rate on cer­ tain conditions set out in that circular. 8

18. In the light of the Court's approach, it 20. Consequently, there is no need to con­ seems to me that the legislative amendment sider to what extent, by adopting Law No introduced after the expiry of the time-limit 95-1347 and the new administrative circular set by the Commission in its reasoned opin­ of 18 July 1996 — both of which post-date ion cannot be taken into account. In other the expiry of the period prescribed — the words, the question whether the French French Republic fulfilled its obligations Republic failed to fulfil its obligations under under Article 2 of the Sixth Directive with Article 2 of the Sixth Directive must be con­ respect to the levying of VAT on the letting sidered on the basis of the national legisla­ of tents, caravans and mobile homes; nor is tion in force at the time when the period there any need to consider to what extent the prescribed in the reasoned opinion expired. contested circular of 11 April 1991 continued to be applied even after the adoption of the new Law, in breach of the obligations laid down in Article 2. 9 — The Commission's reasoned opinion is dated 8 November 1994 and the letter of France's Permanent Representative forwarding the French Government's reply to the Commis- sion is dated 9 January 1995. However, the memorandum containing the French Government's reply bears no date. 10 — See in particular Case C-302/95 Commission v Italy [1996] 11 — For guidance, sec paragraphs 13 and 20, respectively, of the ECR I-6765, paragraph 13, and Case C-289/94 Commission judgments in Cases C-302/95 and C-289/94, cited in foot- v Italy [1996] ECR I-4405, paragraph 20. note 10 above.

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