C-145/96

3. The Finanzamt Trier (Tax Office, herein- 2. The plaintiff in the main proceedings after 'the defendant') claimed VAT from the (hereinafter 'the plaintiff'), Professor von- plaintiff on the fees paid to him by the ICC. Hoffmann, is Professor of Civil Law at the His objections were rejected as unfounded. University of Trier, Germany. During the He appealed to the Finanzgericht Rheinland- years 1987, 1988 and 1989 he served as an Pfalz (Finance Court, Rhineland-Palatinate, arbitrator at the International Chamber of hereinafter 'the national court'), which deter- Commerce (hereinafter 'the I C C ) , which is mined, firstly, that the plaintiff, in acting as an arbitrator, was a supplier of services in the pursuit of an independent occupation and, * Original language: English. 1 — Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member Sutes relating to turnover taxes — Common system of value added tax: uni- form basis of assessment (hereinafter 'the Sixth Directive'); 2 — The order for reference docs not say whether the parties OJ 1977 L 1 « , p. 1. were established inside or outside the Community, or both.

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O P I N I O N O F MR F E N N E L L Y — CASE C-145/96

moreover, that the services were provided to mere consultant'. Thus, as regards German the I C C . 3 law, the national court held that the place of supply of the plaintiff's services was Ger­ many.

3 — This decision was apparently based on Paragraphs 1(1)(1) and 3(a)(1) of the Umsatzsteuergesetz 1980 (Law on Turn­ over Tax 1980, hereinafter 'the UStG'); see BGBl, p. 1953. 4 — See Paragraph 3(a)(3), read in conjunction with Paragraph 3(a)(2)3(a), of the UStG, which, according to the 'Is Article 9(2)(e) of Title VI of the Sixth national court, provides that the place where 'artistic, scien­ tific, educational, sporting, entertainment or similar services, EEC Directive (third group: "services of including the services of organizers', are deemed to be p r o ­ consultants, engineers, consultancy bureaux, vided is that where the supplier carried out his acűViries. lawyers, accountants and other similar ser­ 5 — The national court took the view that the services provided by the plaintiff could not, in German law at least, be vices, as well as data processing and the sup­ regarded as applied science activities, which would be tax­ able, as scientific services, at the place of supply. plying of information") to be interpreted as 6 — See paragraph 3(a)(4)3 of the UStG. including the services of an arbitrator?'

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VON HOFFMANN v FINANZAMT TRIER

B — Community legislation he has his permanent address or usually resides:

6. Article 9 of the Sixth Directive concerns the 'supply of services'. The relevant provi- sions for this case are as follows:

' 1 . The place where a service is supplied shall be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is supplied or, in the absence of such a place of business or fixed establishment, the place — services of consultants, engineers, consul- where he has his permanent address or usu- tancy bureaux, lawyers, accountants and ally resides. other similar services, as well as data pro- cessing and the supplying of information,

'As regards the relationship between Article 9(1) and Article 9(2), the Court has III — Analysis already held that Article 9(2) sets out a num- ber of specific instances of places where cer- tain services are deemed to be supplied, whereas Article 9(1) lays down the general rule on the matter. The object of those provi- sions is to avoid, first, conflicts of jurisdic- tion, which may result in double taxation, A — The reUtionship between Article 9(1) and, secondly, non-taxation, as Article 9(3) and (2) indicates, albeit only as regards specific situ- ations ... . 9

"... the determination of the place where tax- able transactions are effected has been the subject of conflicts concerning jurisdiction as between Member States, in particular as regards supplies of goods for assembly and the supply of services; ... although the place where a supply of services is effected should in principle be defined as the place where the B — The effect of Article 9(2)(e) in Germany person supplying the services has his princi- pal place of business, that place should be defined as being in the country of the person to whom the services are supplied, in par- ticular in the case of certain services supplied between taxable persons where the cost of the services is included in the price of the goods."

11. The issue of the direct effect of Article 9(2)(e) of the Sixth Directive has been raised in certain of the observations submit- The overall purpose of Article 9(2) of the ted to the Court. I do not think that it is Sixth Directive is accordingly to establish a necessary, however, to express any view o n special system for services provided between that issue, since it is clear from the order for taxable persons where the cost of the services reference that the national court, quite prop- is included in the price of the goods.' erly, intends to ensure that the UStG, which implements the Sixth Directive in Germany, is interpreted and applied in conformity with the Court's interpretation of Article 9(2)(e).

10 — Case C-167/95 Maatschap Linthorst, Pouwels and Scheres v Inspecteur der Belastingdienst/Ondernemingen Roermond [1997] ECR1-1195 (hereinafter 'Linthorst'). See in ren- 10. After the hearing in the present case, the erai paragraphs 10 and 11 of the judgment and, regarding the interpretation of Article 9(2)(c), paragraphs 19 to 23; see interpretation given in Dudda of the rela- also paragraphs S to 10 and 19 to 25, respectively, of my tionship between Article 9(1) and (2) of the Opinion.

D — Services under Article 9(2)(e), third indent, of the Sixth Directive 14. The application of Article 9(2)(e) of the Sixth Directive depends, of course, on the recipient of the services being established either outside the Community or as a taxable person within the Community; matters which are to be determined by the national court, with the assistance of this Court, if 17. The proper approach to the interpreta- requested. According to the information tion of the third indent of Article 9(2)(e) has provided by the Commission at the hearing, now been explained by the Court in its judg- the I C C is exempt from the payment of VAT ment in Linthorst. It had been contended under French law but circulates a notice stat- that veterinary services should be included as ing that, though fees of arbitrators do not include VAT, any arbitrator, liable to pay that tax, may seek to recover it directly from 11 — Case C-352/95 Phytheron International v Jean Bourdon the parties. [1997] ECR 1-1729, paragraphs 12 and 14 of the judgment.

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V O N H O F F M A N N v FINANZAMT TRIER

18. The plaintiff argues that there is a com- mon element linking the services listed in the third indent of Article 9(2)(e), namely that they are all specialized services of high qual- ity whose provision is entrusted to the pro- fessionals concerned by reason of special confidence in their personal integrity and technical competence, which applies particu- larly to a professor of law selected as an arbi- 20. Before coming to a conclusion on that trator. In Linthorst, however, the Court issue, I shall make some general observations ruled that '... the only common feature of the on the services of arbitrators, prompted par- disparate activities mentioned ... is that they ticularly by a remark in the Commission's all come under the heading of Uberal profes- written observations that it is so rare for sions', but it went on to state that, 'if the lawyers to practise as arbitrators in private Community legislature had intended all tribunals that the legislature had not men- activities carried out in an independent man- tioned them specifically. Admittedly, those ner to be covered by that provision, it would observations were made prior to the judg- have defined them in general terms'. 1 3 This ment in either D udda or Linthorst, and are based on the assumption that the third indent constituted an enumeration by way of example of independent services. However, I 12 — Sec paragraph 21 of the Opinion. For an exposition of the ejusdem generis principle, see, for example, Bennion, Statu- am surprised that it should be considered tory Interpretation (Butterworths, 2nd ed. 1992), pp. 860 et rare for lawyers to act as arbitrators. In the seq. 13 — Loc. cit, paragraph 20 of the judgment. common-law countries, at least, it is by no

means unusual for a lawyer to act as an arbi- 22. In my opinion, a lawyer, in independent trator in private arbitrations. It is, indeed, practice, who undertakes the role of an arbi- common practice. The parties to private arbi- trator, is chosen for his legal expertise, just as trations are, of course, free to specify the engineers or accountants are, as the United qualifications, if any, of their arbitrator(s). Kingdom argued, chosen for professional The arbitration agreement will often assign expertise in their respective professions.

cerned. However, even if the plaintiff does not meet this test, by being a lawyer as 21. As counsel for the United Kingdom pointed out, in some Member States, such as the United Kingdom and Ireland, there are even two separate branches of the legal pro- fession which traditionally concentrate o n providing different types of legal services. It is difficult, therefore, to imagine that, by adopting the generic term 'lawyers', the Community legislator intended only that 14 — I agree, therefore, with the views expressed by the Bundes- those services provided by lawyers acting o n finanzhof in its judgment of 17 November 1960 (Case IV behalf of a particular client would be cov- 135/58 U, BundessteucrbUtt III 1961, p. 60) to the effect that lawyers are chosen as arbitrators precisely because they

. . [and that] the lawyer may equally pro- vide advice to several parties who consult him collectively' less, act broadly in the interests of the parties and 'he may also attempt to reconcile the opposing interests of several parties to a transaction, when they have a com- to the arbitration, who, moreover, have cho- mon interest in seeing their points of disagreement sen arbitration as a means of obtaining a final resolved'.

defined in Article 2 of Directive 77/249/EEC Directive, particularly Article 9, as inter- (namely a 'Rechtsanwalt' in Germany) he preted by the Court in Dudda. 2° can equally be considered to act as a consult- ant, which is a word of broad import or, as I suggested in my Opinion in Linthorst, of 'indeterminate ... scope'. , s Persons providing independent services as arbitrators can there- fore, in my view, be regarded as 'consult- ants', or their practices as 'consultancy bureaux': I agree with the United Kingdom 24. If they are not actually lawyers' or con- that the inclusion of these descriptions indi- sultants' services, I think the plaintiff's cates that the legislative intention was to give activities fall within the scope of 'other simi- wide scope to the indent of Article 9. lar services', in the sense of being similar to those of a lawyer. It follows from Linthorst that the general approach to be adopted to the interpretation of the third indent of Article 9(2)(e) of the Sixth Directive is that, in order for services which are allegedly similar to one of the listed services actually to fall within the expression 'and other simi- lar services', they must be capable of being regarded as sufficiently similar to one or other of the 'principal and habitual activi- ties' 21 of the professions expressly listed in the indent. The present case concerns a pro- 23. I also agree with the view expressed by fessor of civil law. It is, thus, necessary to the United Kingdom that it would be illogi- compare the services of such an arbitrator cal, particularly from the perspective of the with those normally provided by lawyers. If parties to the arbitration (and thus poten- such services are similar to 'services of law- tially damaging to the choice of the Commu- yers', it will not be necessary to examine nity as a venue for international arbitra- whether they may, alternatively, be regarded tions), ' 9 if the services provided by as similar to the 'services of consultants'. arbitrators were to be deemed to be supplied at a different place from those of the lawyers often engaged to act on behalf of the parties during the arbitration. The exclusion of arbi- trators from the third indent would, as the United Kingdom also observed, have the effect (leaving aside any special role for the ICC) of imposing VAT on arbitrators' fees to be paid by parties established wholly out- 25. In Dudda, in respect of the expression side the Community. This would not accord 'similar activities' used in Article 9(2)(c) of with the scheme and purpose of the Sixth the Sixth Directive in conjunction, inter alia,

26. I do not think that the fact that arbitral services differ from services normally pro- vided by lawyers — that is to say, the resolu- tion of a dispute as opposed to the provision of advice — precludes arbitral services from being regarded as similar to those of lawyers. The 'principal and habitual activities' 23 of 'lawyers' comprise the provision of manifold forms of advice to their clients and negotia- tions on their clients' behalf, as well as rep- resentation in legal proceedings. 29. Finally, certain doubts were raised, espe- cially at the hearing, as to whether, if Article 9(2)(e) of the Sixth Directive were found to apply, the plaintiff would, conse- quently, be able to avoid paying VAT. I do not accept that the plaintiff may be seeking to avoid tax. If, as I think it should, the Court finds that Article 9(2)(e) is applicable, I think it is clear that Article 21(l)(b) obliges Member States to require the person to 27. However, having already taken the view whom Article 9(2)(e) services have been that, subject to the national court's findings regarding the professional status of the plain- tiff, the arbitral services in this case are law- 24 — The Court stated at paragraph 21 of its judgment in yers' services, I have no doubt that, in the Linthorst that: 'Moreover, if tne legislature had intended alternative, they are similar to lawyers' ser- that provision to cover the medical profession generally, as an activity carried out in an independent manner, it would vices. have included it in the list, since, as the national court and the Advocate General in paragraph 22 of his Opinion per- tinently observe, other provisions of the Sixth Directive, such as in particular the transitional exception provided pursuant to Article 28(3)(b) in conjunction with Annex F, specifically mention the services of veterinary surgeons'. 22 — Loc. cit., paragraph 25 of the judgment (emphasis added). The services of arbitrators, on the other hand, are not 23 — Linthorst, paragraph 22 of the judgment. expressly mentioned in the Sixth Directive.

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