C-36/99
ECLI:EU:C:2000:235
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IDEAL TOURISME
OPINION OF ADVOCATE GENERAL COSMAS delivered on 11 May 2000 *
I — Introduction after the 'Sixth Directive') is intended to make liable to VAT any taxable transaction not exempt under some other provision which derogates from that directive. 2 1. The Tribunal de Première Instance Under Article 2(1) of the Sixth Directive, (Court of First Instance), Liège (Belgium) the supply of goods or services effected for has referred to the Court for a preliminary consideration by a taxable person acting as ruling two questions concerning the exemp- such is subject to VAT The exemptions tion from value added tax (hereinafter from VAT for which the Sixth Directive 'VAT') enjoyed by international passenger provides (Article 13 et seq.) are derogations airline companies and the non-exemption from this general principle. 3In fact, the of passenger transport by coach. More principles of general application and neu- particularly, these questions concern the trality of the tax underlying the Sixth extent to which the taxation of the coach Directive are an essential key in interpret- undertakings violates the principles of ing derogating provisions. 4 equal treatment and non-discrimination and the extent to which the exemption of the airlines constitutes State aid prohibited by Article 92 of the EC Treaty (now, after amendment, Article 87 EC).
II — The legal framework 3. In Title XVI of the Sixth Directive, Article 28 establishes certain transitional provisions authorising the continuation by Member States of exemptions maintained A — Community legislation with a view to their eventual abolition. Thus, Article 28(3)(b) states that, during the transitional period referred to in para- 2. In order to 'render tax non-discrimina- tory from the point of view of competition', the Sixth Directive 77/388/EEC 1 (herein- 2 — See Case 7.V85 Kerniu [1986] ECR 2219, paragraphs 14 and 17. 3 — As exceptions to the general rule, these derogations must be interpreted strictly: see, in particular. Case 348/87 Stichting * Original language: Greek. Uitvoering Vmanaele [1989] ECR 1737, paragraph 13, and 1 — Council Directive of 17 May 197 7 on the harmonisation of Case C-453/93 Bulthuis-Criffioen [1995] ECR I-2341, the laws of the Memher States relating to turnover taxes — paragraph 19. Common system of value added tax: uniform basis of 4 — See point 5 of the Opinion of Advocate General Tesauro in assessment (OJ 1977 L 145, p. 1). Case C 35/90 Cmnmissmn v Spurn [1991] ECR I-5073.
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graph 4, Member States 5 may 'continue to transport of goods such as luggage or exempt the activities set out in Annex F motor vehicles accompanying passengers under conditions existing in the Member and the supply of services related to the State concerned'. In other words, this transport of passengers shall only be provision permits a pre-existing system to exempted in so far as the transport of the be maintained if the Member States con- passengers themselves is exempt'. 7 cerned so wish. 6
4. According to Article 28(4) of the Sixth Directive: 'The transitional period shall last B — National legislation initially for five years as from 1 January 1978. At the latest six months before the end of this period, and subsequently as necessary, the Council shall review the situation with regard to the derogations set out in paragraph 3 on the basis of a report from the Commission and shall 6. Within Belgium's internal legal system, unanimously determine on a proposal from the provisions of the Sixth Directive are the Commission, whether any or all of implemented by the Code de la TVA (VAT these derogations shall be abolished.' Code).
5. Moreover, Annex F to the Sixth Direc- 7. Article 1(1) of Royal Decree No 20 of tive, which, as its title indicates, consists of 20 July 1970 fixing the rates of value added a list of the transactions referred to in tax and classifying goods and services Article 28(3)(b), mentions 'passenger trans- according to those rates provides for VAT port' at point 17 and continues: 'The to be charged at the rate of 6% on the goods and services specified in Table A of the annex to the decree. 5 — Article 28 of the Sixth Directive has been repeatedly interpreted by the Court, which has clearly established that the expiration of the period laid down in its paragraph 4 did not lead ipso facto to the extinction of the right to maintain 7 — On 5 November 1992, the Commission submitted to the existing exemptions; see, for example, Commission v Spain, Council a proposal for a directive amending the VAT cited in footnote 4, paragraph 9; Case C-74/91 Commission arrangements applicable to passenger transport (COM(92) v Germany [1992] ECR 1-5437, paragraph 3; and Case 416 final, OJ 1992 C 307, p. 11) which, having come to C-331/94 Commission v Greece [1996] ECR 1-2675, nothing, was finally withdrawn in view of the fact that, paragraph 14. since the Council had taken no decision, the proposal was 6 — See Case C-408/95 Eurotunnel and Others [1997] ECR no longer topical, as noted by the Commission itself 1-6315, paragraph 57. (OJ 1997 C 2, p. 2).
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8. Section XXV, entitled 'Transport', of that it considered the Belgian segments of Table A mentions: its international coach passenger transport operations to be zero-rated for VAT.
'Transport of passengers and non-registered luggage and animals accompanying passen- gers.' 12. In this letter, Idéal Tourisme argued that the Belgian legislation, under which the Belgian segments of coach passenger transport operations are subject to VAT at the rate of 6%, 8whereas air passenger transport is exempt from VAT, was giving 9. Article 41(1)(1) of the VAT Code rise to discrimination, with respect to VAT, exempts from VAT maritime passenger between tourist coach operators and airline transport; international air passenger trans- companies, in breach of the general princi- port; transport of luggage and motor ple of equal treatment. Moreover, Idéal vehicles accompanied by passengers in the Tourisme considered that the VAT system case of the transport referred to in this which gave advantages to the air passenger same indent (1). transport sector constituted State aid incompatible with the common market within the meaning of Article 92 et seq. of the EC Treaty.
III — The facts
13. On 10 October 1997, the VAT Office in Liège sent Idéal Tourisme a statement of 10. Idéal Tourisme SA (hereinafter 'Idéal VAT adjustment, charging it BEF 554 845 Tourisme'), the applicant in the main in VAT and a fine of BEF 55 000. proceedings, which is established in Liège, is a company operating international pas- senger transport by coach.
14. By letter of 27 October 1997, Idéal Tourisme authorised the VAT office to debit 11. In a letter addressed to the Belgian tax authority dated 11 July 1997, referring to its (monthly) VAT return for its transac- 8 — The segments of the journey completed in other countries of the European Union are subject to VAT at the rate specific to tions in June 1997, Idéal Tourisme stated the c o u n t r y concerned.
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those sums from its VAT current account, Community law, submitting that the Bel while simultaneously disputing the adjust gian legislation breached both the principle ment and giving the office notice to repay of equal treatment and the provisions of the the sums debited. EC Treaty concerning State aid.
15. The tax authority having failed to comply, on 16 January 1998 Idéal Tour isme brought an action against its refusal to reimburse. IV — The questions referred to the Court
20. In order to resolve the dispute before it, 16. On 26 January 1998, the VAT office the national court has referred the follow informed Idéal Tourisme that the sums at ing two questions to the Court for a issue had been repaid. preliminary ruling:
17. On 18 February 1998, a summons to pay the said sums was issued against Idéal '1. Does Council Directive 77/388/EEC, Tourisme. and in particular Articles 12(3) and 28(3)(b) thereof, permit Member States to introduce, to the detriment of coach passenger transport undertakings, dis crimination which is contrary to the principles of equal treatment and non 18. On 22 April 1998, Idéal Tourisme discrimination contained in Commu made an application to have the summons nity law? set aside, on the same grounds as in the action for repayment brought in January 1998.
2. Can a VAT regime which favours a given sector of economic activity, such 19. Idéal Tourisme supported its applica as the one in issue in the present case, tion with two arguments drawn from constitute State aid within the meaning
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or Article 92 of the Treaty of Rome, question to the Court for a preliminary even where it does not exclusively ruling. protect the interests of national indus- try?'
23. Finally, in the view of the Tribunal de Première Instance de Liège, Idéal Touris- V — Replies to the questions referred to me's position is sustainable and there can the Court be no suspicion that it has manufactured the dispute merely in order to bring before the Court of Justice various questions, whose expediency and formulation remain a matter for the national court. A — Admissibility of the questions
21. The Belgian Government expresses doubt as to whether there is a genuine dispute, arguing that the questions which 24. It is clear from the order for reference Idéal Tourisme had suggested that the that the action brought by Idéal Tourisme national court should raise, while not seeks reimbursement of the VAT it paid and purely hypothetical, nevertheless had the hence the benefit for itself of an exemption sole purpose of achieving a result which it from VAT. had not yet been possible to achieve by legislation. 9
22. According to Idéal Tourisme there is 25. With regard to the first question refer- nothing artificial about the main proceed- red for a ruling, I believe that it is possible ings. Indeed, it is plain that the parties to extract from all the information provi- disagree on a number of important points ded by the national court, in particular and that Idéal Tourisme did not come to an from the grounds of the decision referring agreement with the Belgian State to refer a the questions, points of Community law which require interpretation. 10 The reply to the questions of interpretation raised 9 — The Belgian Government also raises the question or whether, within the context of an order for reference which depends heavily on the factual and legal circumstances giving rise to the main proceedings, the court can rule on an interpreta- tion of certain provisions of Community law which would 10 — See, in particular, Case 35/85 Procureur de la République v have the effect of limiting the competence of the Commu- lissier [1986] ECR 1207, paragraph 9, and Case C-250/91 nity legislature in this field or even precluding it from doing Hewlett Packard France v Directeur Générale des so. Douanes [1993] ECR I-1819, paragraph 9.
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corresponds to an objective requirement relevant to the resolution of the dispute in inherent in the resolution of the dispute the main proceedings. 12 I reach this con- brought before the national court. 11 clusion without having to decide whether the exemption of the airlines from VAT should be characterised as State aid, as that question, for the above reason, need not be examined.
26. Nevertheless, having regard to the subject-matter of the dispute submitted to the national court, I believe that there is no need to reply to the second question. Thus, Idéal Tourisme's action is aimed at obtain- ing the reimbursement of the VAT paid and not at having the Belgian tax authorities ordered to stop granting aid to the airlines in the form of exemptions from VAT or having the airline companies thus advan- taged repay to the tax authorities the aid at issue granted in breach of Article 93(3) of 27. Thus, for the Court, replying to the the EC Treaty (now Article 88(3) EC), in second question raised by the national which case the raising of this question court would signify a clear departure from would be justified and the Court's reply precedent, in that it would thereby be declaring admissible, and replying to, ques- tions referred for a ruling, even though, as 11—In fact, on several occasions (see, in particular, Case already explained, those questions are not 244/80 Foglia v Novello [1981] ECR 3045, paragraphs 18 to21)theCourthas pointed out that Article 177 of the EC relevant to the outcome of a pending case Treaty (now Article 234 EC) assigns the Court the duty not and have been formulated in connection of delivering advisory opinions on general or hypothetical questions but of assisting in the administration of justice in with such a (pending) case and raise a
the Member States. So, having regard to the circumstances of fact and law involved and the analysis of the problems problem which, to a greater or lesser facing the national court in the main proceedings, the Court examines whether there is a genuine need to extent, has been discussed in theory or interpret provisions of Community law and whether the interpretation requested will be useful in resolving the practice, without its solution being of any dispute in the main proceedings or whether the questions assistance in deciding that case. have been raised within the framework of procedural devices arranged by the parties in order to induce the Court to give its views on certain problems of Community law which do not correspond to an objective requirement inherent in the resolution of the dispute (see Foglia v 12 — lt may be recalled that in Evangelischer Krankenhausver- Novello, cited above, paragraph 18, Case C-231/89 ein Wien, cited above in footnote 11, paragraph 53, the Gmurzynska-Bscher v Oberfinanzdirektion Köln [1990] Court considered that it was unnecessary to reply to the ECR 1-4003, paragraph 23, and Case C-437/97 Evange- question whether exemption from the payment of beverage lischer Krankenhausverein Wien and Others v Abgaben- duty on the sale of wine direct from the vineyard berufungskommission Wien and Others [2000] ECR constitutes State aid incompatible with Community law. I-1157, paragraph 52).
Only exceptionally has the Court In this judgment, the Court held that the question had recourse to the right to refuse to reply, when it was submitted was wholly irrelevant to the resolution of the quite obvious that the interpretation of Community law or disputes in the main proceedings, which concerned the the examination of the validity of a rule of Community law obligation on various companies to pay beverage duty in bore no relation to the subject-matter of the main action respect of supplies of beverages and ice cream effected for (see, in particular,Case 126/80 Salonia v Poidomani and consideration, and not the question whether exemption of Baglieri |1981] ECR 1563, paragraph 6, and Case wine sold directly at the place of production from payment C-368/89 Crispoltoni v Fattorìa Autonoma Tabacchi dì of such a duty constituted State aid incompatible with the Città di Castello [1991] ECR I-3695, paragraph 11).
Treaty.
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B — The first question but not to introduce a new exemption system. 13 However, this only applies to the extent that the two conditions on which the compatibility of national legislation with the Sixth Directive depends, namely, ante- riority and maintenance of the legislation at issue in the same form as it was in at the 28. By its first question, the national court time of entry into force of the Sixth inquires whether the Sixth Directive, and in Directive, or free from changes incompati- particular Article 28(3)(b) thereof, permits ble with the exception introduced by Arti- Member States to introduce inequality of cle 28(3), are cumulatively satisfied. Thus, treatment to the detriment of coach pas- exemptions applicable on the date of entry senger transport undertakings and whether into force of the Sixth Directive may not be such discrimination is contrary to the extended, nor may new exemptions be principles of equal treatment and non- introduced after the entry into force of that discrimination, which form an integral part directive, 14 no more than it is possible to of Community law. reintroduce exemptions that existed before the provision of certain services was made subject to VAT under the Sixth Directive. 15
29. It follows from the main proceedings that the reply to this question would be useful in resolving the dispute in the main 31. Furthermore, in my view, the combined action only in so far as the question of provisions of Article 28(3)(b) and Annex F, whether the exemption can be extended to coach passenger transport undertakings has 13 — See Kerrutt, cited above in footnote 2, paragraph 17, and been decided. In my view, the answer to the Opinion of Advocate General Tesauro in Commission this question follows from the interpreta- v Spain, cited above in footnote 4, point 4. Moreover, the Court has acknowledged that the author- tion of Article 28(3)(b) of the Sixth Direc- isation granted to Membet States to retain their existing legislation in regard to exclusion from the right of tive, without it being necessary to examine deduction of VAT, provided for in Article 17(6) of the the question put by the national court. Sixth Directive, will remain in force until such time as the Council has adopted the provisions envisaged by that article; see, in particular, Case C-305/97 Royscot Leasing and Others v Customs and Excise [1999] ECR I-6671, paragraphs 29 and 30, and Case C-43/96 Commission v France [1998] ECR I-3903, paragraphs 16 to 19, together with paragraphs 20 and 21 of the Opinion of Advocate General Jacobs in the latter case, and also point 24 et seq. of my opinion in Joined Cases C-177/99 and C-181/99 Ampafrance and Sanofi Synthelabo pending before the Court. 14 — See, in particular, Kerrutt, cited above in footnote 2, paragraph 17, and Case C-136/97 Norbury Developments v Commissioners of Customs and Excise [1999] ECR 30. The wording of Article 28(3)(b) of the I-2491, paragraphs 19 and 20, in both of which, however, the Court stressed that this provision did not prevent the Sixth Directive is clear. It authorises Mem- abolition of exemptions existing on the date or entry into ber States to continue to apply under the force of the Sixth Directive, with a view to the uniform application of the latter (paragraph 201, and also Commis- same conditions the exemptions from VAT sion v Cermany, cited above in footnote 5, paragraph 15. for which their legislation provided before 15 — See Commission v Spam, cited above in footnote 4, paragraphs 6 to 9, and Commission v Germany, cited the entry into force of the Sixth Directive, above in footnote 5, paragraph 15.
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point 17, of the Sixth Directive are not would be contrary to the requirement of contrary to the principles of equal treat- uniform application of the provisions of the ment and non-discrimination. If it became Sixth Directive, 17 to the detriment of the apparent that the application or mainte- objective of achieving a market character- nance of certain existing provisions by ised by healthy competition. Member States involved discrimination, that could not be laid at the door of the Sixth Directive, and there could be no question of extending the existing exemp- tions.
33. In the present case, therefore, Arti- cle 28(3)(b) of the Sixth Directive does not allow a Member State, such as the Kingdom of Belgium, to extend the exemp- tion provided for airline companies to coach transport undertakings once the Sixth Directive has entered into force.
32. In the light of the above, my position is as follows: if, after the entry into force of the Sixth Directive, the VAT exemption system applicable to air passenger transport had been extended to coach transport undertakings, that extension would have been contrary to Article 28(3)(b), thus 34. Accordingly, the Court is not required giving rise to distortions to the detriment to examine the question whether the airline of Member States 16 which, in accordance companies are receiving favourable treat- with this transitional provision, had left ment to the detriment of the coach trans- their legislation as it stood on the entry into port undertakings, since, in any event, as I force of the Sixth Directive and had not have already explained, the reply given extended the VAT exemptions that existed would not be of use in resolving the present at that time. Ultimately, this outcome dispute.
16 — See Commission v Germany, cited above in footnote 5, 17 — See Norbury Developments, cited above in footnote 14, paragraphs 25 and 26. paragraph 20.
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VI — Conclusion
35. In the light of the above, I propose that the Court reply to the questions referred for a preliminary ruling by the Tribunal de Première Instance de Liège as follows:
The combined provisions of Article 28(3)(b) and Annex F, point 17, of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation 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 they do not authorise Member States to extend, after the entry into force of that directive, the system of exemptions from value added tax for certain passenger transport activities.
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