HvJ EG, 06-04-1995, nr. C-4/94

HvJ EG, 06-04-1995, nr. C-4/94

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

Uitspraak 06‑04‑1995

C. Gulmann, J.C. Moitinho de Almeida, D.A.O. Edward

Partij(en)

Arrest van het Hof (vijfde kamer)

6 april 1995.

Zaak C-4/94.

In zaak C-4/94,

betreffende een verzoek aan het Hof krachtens artikel 177 EEG-Verdrag van de High Court of Justice, Queen's Bench Division, in het aldaar aanhangig geding tussen

BLP Group plc

en

Commissioners of Customs and Excise,

Fiscale bepalingen o Harmonisatie van wetgevingen o Omzetbelasting o Gemeenschappelijk stelsel van belasting over toegevoegde waarde o Aftrek van voorbelasting o Belasting op diensten, verricht voor vrijgestelde handeling o Uitsluiting van recht op aftrek o Vrijgestelde handeling gebruikt voor belaste handeling o Niet van invloed

(Richtlijnen van de Raad 67/227, art. 2, en 77/388, art. 17)

om een prejudiciële beslissing over de uitlegging van artikel 2 van de Eerste richtlijn (67/227/EEG) van de Raad van 11 april 1967 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting (PB 1967, blz. 1301), en van artikel 17, lid 2, van de Zesde richtlijn (77/388/EEG) van de Raad van 17 mei 1977 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting o Gemeenschappelijk stelsel van belasting over de toegevoegde waarde: uniforme grondslag (PB 1977, L 145, blz. 1),

wijst

HET HOF VAN JUSTITIE (Vijfde kamer),

samengesteld als volgt: C. Gulmann, kamerpresident, J. C. Moitinho de Almeida (rapporteur) en D. A. O. Edward, rechters,

advocaat-generaal: C. O. Lenz

griffier: L. Hewlett

gelet op de schriftelijke opmerkingen ingediend door:

o.

BLP Group plc, vertegenwoordigd door D. Milne, QC, geïnstrueerd door T. Woodgate en S. Coleclough, Solicitors,

o.

de regering van het Verenigd Koninkrijk, vertegenwoordigd door J. E. Collins, Assistant Treasury Solicitor, als gemachtigde, bijgestaan door K. P. E. Lasok, Barrister,

o.

de Griekse regering, vertegenwoordigd door F. Georgakopoulos, adjunct-juridisch adviseur bij de Raad van State, en K. Grigoriou, procesgemachtigde bij de Raad van de State, als gemachtigden,

o.

de Commissie van de Europese Gemeenschappen, vertegenwoordigd door haar juridisch adviseur T. Cusack en E. Traversa, lid van haar juridische dienst, als gemachtigden,

gezien het rapport ter terechtzitting,

gehoord de mondelinge opmerkingen van verzoekster in het hoofdgeding, de regering van het Verenigd Koninkrijk, de Griekse regering en de Commissie van de Europese Gemeenschappen ter terechtzitting van 8 december 1994,

gehoord de conclusie van de advocaat-generaal ter terechtzitting van 26 januari 1995,

het navolgende

Arrest

1

Bij beschikking van 14 december 1993, ingekomen bij het Hof op 6 januari 1994, heeft de High Court of Justice, Queen's Bench Division, het Hof krachtens artikel 177 EG-Verdrag drie prejudiciële vragen gesteld over de uitlegging van artikel 2 van de Eerste richtlijn (67/227/EEG) van de Raad van 11 april 1967 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting (PB 1967, blz. 1301

hierna: ‘Eerste richtlijn’) en van artikel 17, lid 2, van de Zesde richtlijn (77/388/EEG) van de Raad van 17 mei 1977 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting o Gemeenschappelijk stelsel van belasting over de toegevoegde waarde: uniforme grondslag (PB 1977, L 145, blz. 1

hierna: ‘Zesde richtlijn’).

2

Die vragen zijn gerezen in een geding tussen de vennootschap BLP Group plc (hierna: ‘BLP’) en de Commissioners of Customs and Excise (hierna: ‘Commissioners’).

3

BLP is een beheers- en houdstermaatschappij die haar diensten verleent aan een groep vennootschappen die goederen vervaardigen voor de meubel- en doe-het-zelf-industrie. In 1989 kocht zij het maatschappelijk kapitaal van een Duitse vennootschap, Berg Mantelprofilwerk GmbH (hierna: ‘Berg’). In juni 1991, nadat de financiële situatie van BLP verontrustend was geworden, deden haar bestuurders 95 % van de Berg-aandelen van de hand. De opbrengt van deze verkoop werd gebruikt om de schulden van BLP af te lossen.

4

In haar BTW-aangifte over het tijdvak tot en met 30 september 1991 verzocht BLP om aftrek van de BTW die zij had betaald over drie facturen van respectievelijk haar bankiers, juridisch adviseurs en accountants voor in verband met de verkoop van de Berg-aandelen verrichte diensten.

5

Op grond dat deze aandelenverkoop BTW-rechtelijk gezien een vrijgestelde verrichting vormde, werd de aftrek o 39 845 UKL o door de Commissioners geweigerd.

6

BLP stelde tegen deze beslissing beroep in bij het London Value Added Tax Tribunal, waarbij zij zich met name baseerde op de artikelen 17 en 19 van de Zesde richtlijn.

7

Luidens artikel 2, tweede alinea, van de Eerste richtlijn ‘is bij elke transactie de belasting over de toegevoegde waarde, berekend over de prijs van het goed of van de dienst volgens het tarief dat voor dat goed of voor die dienst geldt, verschuldigd onder aftrek van het bedrag van de belasting over de toegevoegde waarde waarmede de onderscheidene elementen van de prijs rechtstreeks zijn belast’.

8

In verband met het recht op aftrek bepaalt artikel 17 van de Zesde richtlijn:

‘(…)

2. Voor zover de goederen en diensten worden gebruikt voor belaste handelingen mag de belastingplichtige van de door hem verschuldigde belasting aftrekken:

a)

de belasting over de toegevoegde waarde, welke verschuldigd of voldaan is voor de hem door een andere belastingplichtige geleverde of te leveren goederen en voor de te zijnen behoeve door een andere belastingplichtige verrichte of te verrichten diensten

2. (…)

5. Voor goederen en diensten die door een belastingplichtige zowel worden gebruikt voor handelingen als bedoeld in de leden 2 en 3, waarvoor recht op aftrek bestaat, als voor handelingen waarvoor geen recht op aftrek bestaat, wordt aftrek slechts toegestaan voor dat gedeelte van de belasting over de toegevoegde waarde, dat evenredig is aan het bedrag van de eerstbedoelde handelingen (pro rata).

5. (…)’

9

Artikel 19 regelt de berekening van het pro rata van artikel 17, lid 5:

‘1.

Het pro rata voor de toepassing van de aftrek, als bedoeld in artikel 17, lid 5, eerste alinea, is de uitkomst van een breuk, waarvan:

o.

de teller bestaat uit het totale bedrag van de per jaar berekende omzet, exclusief belasting over de toegevoegde waarde, met betrekking tot de handelingen waarvoor overeenkomstig artikel 17, leden 2 en 3, recht op aftrek bestaat, en

o.

de noemer bestaat uit het totale bedrag van de per jaar berekende omzet, exclusief belasting over de toegevoegde waarde, met betrekking tot de handelingen die in de teller zijn opgenomen, alsmede die waarvoor geen recht op aftrek bestaat (…)

2.

In afwijking van het bepaalde in lid 1 wordt voor de berekening van het pro rata buiten beschouwing gelaten de omzet met betrekking tot (…) bijkomstige handelingen ter zake van onroerende goederen en bijkomstige financiële handelingen (…)’

10

Na de verwerping van haar beroep in eerste aanleg, wendde BLP zich tot de Queen's Bench Division van de High Court of Justice. Tegen de weigering van deze instantie om de zaak voor een prejudiciële beslissing naar het Hof van Justitie te verwijzen, stelde BLP hoger beroep in bij de Court of Appeal, die haar op dit punt in het gelijk stelde en de zaak naar de High Court terugverwees.

11

Onder die omstandigheden heeft deze rechterlijke instantie besloten de behandeling van de zaak te schorsen en het Hof de navolgende prejudiciële vragen voor te leggen:

‘1)

Wanneer een belastingplichtige (‘A’ ) diensten verricht voor een andere belastingplichtige (‘B’ ) en die diensten door B voor een vrijgestelde handeling (verkoop van aandelen) worden gebruikt, die als een ‘bijkomstige financiële transactie’ wordt aangemerkt en tot doel en resultaat heeft, fondsen te verwerven om B's schulden geheel af te lossen, zijn dan die door A verrichte diensten, gelet op artikel 2 van de Eerste richtlijn en artikel 17 van de Zesde richtlijn,

a)

diensten die worden gebruikt voor een vrijgestelde handeling, zodat de voorbelasting niet aftrekbaar is

b)

diensten die worden gebruikt voor belaste handelingen (namelijk voor B's hoofdbedrijvigheid: het verrichten van belaste leveringen), zodat de voorbelasting volledig aftrekbaar is

c)

diensten die zowel voor vrijgestelde als voor belaste handelingen worden gebruikt, zodat de voorbelasting aftrekbaar is overeenkomstig artikel 17, lid 5, van de Zesde richtlijn?

2)

Indien op de eerste vraag wordt geantwoord dat c) van toepassing is, en indien een Lid-Staat in de uitoefening van zijn discretionaire bevoegdheid krachtens artikel 17, lid 5, van de Zesde richtlijn voor de berekening van het bedrag van de aftrekbare voorbelasting een onder artikel 17, lid 5, sub c, vallende bijzondere methode heeft vastgesteld, is dan artikel 19 van de Zesde richtlijn van toepassing op de berekening van het bedrag van de aftrekbare voorbelasting?

3)

Indien het antwoord op de tweede vraag luidt, dat artikel 19 op de berekening van het bedrag van de aftrekbare voorbelasting van toepassing is, staat dan artikel 19, lid 2, volledige aftrek van de voorbelasting toe in die zin, dat bij de berekening volgens artikel 19, lid 1, van de aftrekbare voorbelasting de aandelenverkoop als ‘bijkomstige financiële handeling’ buiten beschouwing blijft?’

De eerste vraag

12

Volgens verzoekster in het hoofdgeding moet artikel 17, lid 2, sub a, van de Zesde richtlijn ruim worden uitgelegd: zijn werkingssfeer strekt zich uit tot de BTW die verschuldigd is of voldaan is over leveringen van goederen of over diensten die rechtstreeks dan wel onrechtstreeks met de belaste handelingen van de belastingplichtige samenhangen, en meer bepaald over de levering van vrijgestelde goederen of over diensten die voor belaste handelingen worden gebruikt. In casu zijn de in verband met de verkoop van de Berg-aandelen verrichte diensten gebruikt om de nodige gelden bijeen te brengen voor de aflossing van BLP's schulden, die nu juist een uitvloeisel waren van de belaste handelingen die zij had verricht.

13

Het beperken van de aftrek van artikel 17, lid 2, tot de BTW die verschuldigd is of voldaan is over leveringen van goederen of over diensten welke rechtstreeks met de belaste handelingen samenhangen, is volgens BLP in strijd met de bewoordingen van deze bepaling, impliceert dat handelingen die onder dezelfde regeling zouden moeten vallen, verschillend worden behandeld, en valt niet te verenigen met het beginsel van neutraliteit van de BTW.

14

Niets rechtvaardigt, aldus BLP, dat diensten die door een accountant of een juridisch adviseur in het kader van belaste handelingen worden verricht, wel recht geven op aftrek van voorbelasting, terwijl een dergelijk recht in het onderhavige geval niet bestaat. In geen van beide gevallen gaan de diensten immers in het eindprodukt op.

15

Indien BLP een banklening had afgesloten om haar tekort aan liquide middelen te dekken, zou de BTW over de diensten van een financieel adviseur die daarbij nodig waren geweest, volledig aftrekbaar zijn. Het beginsel van belastingneutraliteit verlangt evenwel, dat economische beslissingen niet door fiscale factoren mogen worden beïnvloed.

16

Verder betoogt BLP, dat zij de in casu verrichte diensten heeft gebruikt zowel voor handelingen die geen recht op aftrek geven o de aandelenverkoop o, als voor belaste handelingen o te weten, alle handelingen die onder haar statutair doel vallen. Bijgevolg is artikel 19 van de Zesde richtlijn, betreffende de berekening van het pro rata in geval van gemengde handelingen, van toepassing en moet, overeenkomstig lid 2 van dat artikel, de vrijgestelde handeling, die een financiële handeling is, bij de berekening van het pro rata van lid 1 buiten beschouwing blijven.

17

Dit betoog kan niet worden aanvaard.

18

Om te beginnen zij onder de aandacht gebracht, dat lid 2 van artikel 17 van de Zesde richtlijn moet worden uitgelegd in samenhang met lid 5 van dat artikel.

19

Lid 5 regelt het recht op aftrek van voorbelasting die betrekking heeft op goederen of diensten die door een belastingplichtige ‘zowel worden gebruikt voor handelingen als bedoeld in de leden 2 en 3, als voor handelingen waarvoor geen recht op aftrek bestaat’. De formulering ‘gebruikt voor’ wijst erop, dat het in lid 2 bedoelde recht op aftrek een rechtstreekse en onmiddellijke samenhang vereist tussen de betrokken goederen of diensten en de belaste handelingen, en dat het doel dat de belastingplichtige uiteindelijk beoogt te bereiken, niet relevant is.

20

Deze uitlegging vindt bevestiging zowel in artikel 2 van de Eerste richtlijn als in artikel 17, lid 3, sub c, van de Zesde richtlijn.

21

Volgens artikel 2 van de Eerste richtlijn mag enkel de BTW worden afgetrokken waarmee de onderscheidene elementen van de prijs rechtstreeks zijn belast.

22

Artikel 17, lid 3, sub c, bepaalt het volgende:

‘De Lid-Staten verlenen eveneens aan iedere belastingplichtige recht op aftrek of op teruggaaf van de in lid 2 bedoelde belasting over de toegevoegde waarde, voor zover de goederen en diensten worden gebruikt voor:

(…)

c)

door de belastingplichtige verrichte handelingen die krachtens artikel 13, B, onder a) en d), punten 1 tot en met 5, zijn vrijgesteld, wanneer de ontvanger buiten de Gemeenschap gevestigd is of wanneer de handelingen rechtstreeks samenhangen met goederen die bestemd zijn om te worden uitgevoerd naar een land buiten de Gemeenschap.’

23

Deze bepaling toont aan, dat de richtlijn slechts bij wijze van uitzondering voorziet in het recht op aftrek van BTW over goederen of diensten die voor vrijgestelde handelingen worden gebruikt.

24

Bovendien, zo de uitlegging van BLP werd aanvaard, dan zou de administratie telkens wanneer het o zoals hier o gaat om verrichtingen die niet objectief met belaste handelingen samenhangen, moeten onderzoeken wat de belastingplichtige er precies mee voorheeft. Dat zou ingaan tegen de doelstellingen van het BTW-stelsel, namelijk de rechtszekerheid te garanderen en de heffing van de belasting te vergemakkelijken door, uitzonderingsgevallen daargelaten, af te gaan op de objectieve aard van de handeling.

25

Het is juist, dat een onderneming waarvan de bedrijvigheid onder de BTW valt, recht heeft op aftrek van de belasting over diensten die accountants en juridisch adviseurs in verband met belaste handelingen van de belastingplichtige hebben verricht. Ook is juist, dat indien BLP haar tekort aan geldmiddelen door middel van een banklening had gedekt, zij de BTW over de in verband daarmee verrichte diensten van een financieel adviseur had kunnen aftrekken. Dit is evenwel de consequentie van het feit, dat deze diensten, die deel uitmaken van de algemene kosten van de onderneming en dus mede de prijs van de produkten bepalen, door de belastingplichtige voor belaste handelingen worden gebruikt.

26

Een ondernemer kan zich bij zijn keuze tussen vrijgestelde en belaste handelingen laten leiden door een reeks van factoren, waaronder fiscale overwegingen in verband met het BTW-stelsel. Het beginsel van de neutraliteit van de BTW, in de zin van de rechtspraak van het Hof, heeft niet de strekking die BLP eraan toeschrijft. Het gemeenschappelijk BTW-stelsel waarborgt weliswaar een volstrekt neutrale fiscale belasting van alle economische activiteiten, ongeacht het doel of het resultaat van die activiteiten, doch op voorwaarde dat deze activiteiten op zich aan de BTW zijn onderworpen (zie arrest van 14 februari 1985, zaak 268/83, Rompelman, Jurispr. 1985, blz. 655, r.o. 19).

27

Met betrekking tot het argument ontleend aan artikel 19 van de Zesde richtlijn, moet ten slotte worden opgemerkt, dat deze bepaling onderstelt, dat de belastingplichtige de goederen of diensten heeft gebruikt zowel voor handelingen waarvoor recht op aftrek bestaat, als voor handelingen waarvoor dat niet het geval is. In casu echter zijn de diensten voor een vrijgestelde handeling gebruikt.

28

Mitsdien moet op de eerste vraag worden geantwoord, dat artikel 2 van de Eerste richtlijn en artikel 17 van de Zesde richtlijn aldus moeten worden uitgelegd, dat wanneer een belastingplichtige diensten verricht voor een andere belastingplichtige, die deze diensten voor een vrijgestelde handeling gebruikt, deze laatste o behalve in de door die richtlijnen uitdrukkelijk bepaalde gevallen o geen recht heeft op aftrek van voorbelasting, ook niet wanneer het doel van de vrijgestelde handeling uiteindelijk is gelegen in het verrichten van een belaste handeling.

De tweede en de derde vraag

29

Gelet op het antwoord op de eerste vraag, behoeven de tweede en de derde prejudiciële vraag niet te worden beantwoord.

Kosten

30

De kosten door de Griekse regering en de regering van het Verenigd Koninkrijk alsmede door de Commissie van de Europese Gemeenschappen wegens indiening van hun opmerkingen bij het Hof gemaakt, kunnen niet voor vergoeding in aanmerking komen. Ten aanzien van de partijen in het hoofdgeding is de procedure als een aldaar gerezen incident te beschouwen, zodat de nationale rechterlijke instantie over de kosten heeft te beslissen.

HET HOF VAN JUSTITIE (Vijfde kamer),

uitspraak doende op de door de High Court of Justice, Queen's Bench Division, bij beschikking van 14 december 1993 gestelde vragen, verklaart voor recht:

Artikel 2 van de Eerste richtlijn (67/227/EEG) van de Raad van 11 april 1967 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting, en artikel 17, lid 2, van de Zesde richtlijn (77/388/EEG) van de Raad van 17 mei 1977 betreffende de harmonisatie van de wetgevingen der Lid-Staten inzake omzetbelasting o Gemeenschappelijk stelsel van belasting over de toegevoegde waarde: uniforme grondslag, moeten aldus worden uitgelegd, dat wanneer een belastingplichtige diensten verricht voor een andere belastingplichtige, die deze diensten voor een vrijgestelde handeling gebruikt, deze laatste o behalve in de door die richtlijnen uitdrukkelijk bepaalde gevallen o geen recht heeft op aftrek van voorbelasting, ook niet wanneer het doel van de vrijgestelde handeling uiteindelijk is gelegen in het verrichten van een belaste handeling.

Conclusie 26‑01‑1995

Lenz

Opinion of Mr Advocate General Lenz delivered on 26 January 1995

A o. Introduction

1

The Queen's Bench Division of the High Court of Justice for England and Wales has asked the Court for a preliminary ruling on the interpretation of some provisions of the First Council Directive 67/227/EEC of 11 April 1967 on the harmonization of legislation of Member States concerning turnover taxes(1) (‘the First Directive’) and the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes o common system of value added tax: uniform basis of assessment(2) (‘the Sixth Directive’).

2

The case before the High Court concerns an application by the British company BLP Group plc (‘BLP’) to deduct from the VAT payable on its taxable transactions certain amounts of VAT on fees for services invoiced to BLP in connection with the sale of shares in a company. The competent tax authorities had refused the application on the grounds that the services had been used for an exempt transaction, which precluded the deduction of input tax. The questions referred to the Court therefore relate to the conditions for and terms of the right to deduct input tax.

3

That right is one of the essential features of the common system of value added tax set out in Article 2 of the First Directive. The second paragraph of that article states:

‘On each transaction, value added tax, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of value added tax borne directly by the various cost components.(3)

4

That provision is fleshed out by Article 17 et seq. of the Sixth Directive. Article 17 states:

‘(1) The right to deduct shall arise at the time when the deductible tax becomes chargeable.

(2) In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

(a)

value added tax due or paid in respect of goods or services supplied or to be supplied to him by another taxable person

(2) …

(5) As regards goods and services to be used by a taxable person both for transactions covered by paragraphs 2 and 3, in respect of which value added tax is deductible, and for transactions in respect of which value added tax is not deductible, only such proportion of the value added tax shall be deductible as is attributable to the former transactions.

(5) This proportion shall be determined, in accordance with Article 19, for all the transactions carried out by the taxable person.

(5) However, Member States may:

(5) …

(c)

authorize or compel the taxable person to make the deduction on the basis of the use of all or part of the goods and services

(5) …’

5

Article 19 provides inter alia:

‘(1) The proportion deductible under the first subparagraph of Article 17(5) shall be made up of a fraction having:

o.

as numerator, the total amount, exclusive of value added tax, of turnover per year attributable to transactions in respect of which value added tax is deductible under Article 17(2) and (3),

o.

as denominator, the total amount, exclusive of value added tax, of turnover per year attributable to transactions included in the numerator and to transactions in respect of which value added tax is not deductible. The Member States may also include in the denominator the amount of subsidies, other than those specified in Article 11A(1)(a).

(1) The proportion shall be determined on an annual basis, fixed as a percentage and rounded up to a figure not exceeding the next unit.

(2) By way of derogation from the provisions of paragraph 1, there shall be excluded from the calculation of the deductible proportion, amounts of turnover attributable to the supplies of capital goods used by the taxable person for the purposes of his business. Amounts of turnover attributable to transactions specified in Article 13B(d), in so far as these are incidental transactions, and to incidental real estate and financial transactions shall also be excluded. …’

6

It appears, moreover, from the order for reference that BLP and the competent tax authorities (Commissioners of Customs and Excise, ‘the Commissioners’) have agreed a special method for determining the deductible portion of input tax on goods or services which have not been wholly used in making taxable supplies of goods or services and have not been wholly used in making exempt supplies of goods or services (or in carrying on any activity other than the making of taxable supplies of goods or services). Under the special method, the input tax is apportioned on the basis of the ratio of the value of taxable transactions to total transactions. The value of incidental financial transactions is left out of account in the calculation, however, and the input tax on those transactions is attributed to them directly.

7

As to the details of the main proceedings, the following is apparent from the order for reference.

8

BLP is a management/holding company. It exercises control over a number of trading companies which produce goods for use in the furniture and DIY industries, and provides management services for them.

9

In 1989 BLP bought the share capital(4) of a German company by the name of Berg Mantelprofilwerk GmbH (‘Berg’).

10

In May 1991 the directors of BLP decided in view of the company's poor financial position that the shares in Berg ought to be sold. In June 1991 BLP sold 95% of those shares. The income from the sale was used to discharge BLP's indebtedness to its bankers.

11

In its VAT return for the period ending 30 September 1991, BLP claimed to deduct from the VAT payable on its outputs the amount of the VAT included in three invoices for services from its bank, its solicitors and its accountants. According to the three invoices, the services in question were supplied in connection with the sale of the shares in Berg.

12

BLP and the Commissioners agreed that the sale of the shares in Berg was an exempt supply by BLP for VAT purposes and that input tax paid on services which are wholly attributable to an exempt supply cannot be deducted.

13

The total amount which BLP sought to deduct as input tax in respect of the services received by it was 45 975.(5) The Commissioners allowed BLP to deduct 6 120 as relating to services rendered before the decision to sell the shares, which were thus part of BLP's general operating costs. The Commissioners refused to allow BLP to deduct the remaining 39 845 on the grounds that it related to services provided in connection with the sale of the shares and that the sale of shares was an exempt supply for VAT purposes, in respect of which no input tax could be deducted.

14

BLP appealed against the Commissioners' decision to the London Value Added Tax Tribunal (‘the Tribunal’), arguing firstly that there had been an infringement of Articles 17 and 19 of the Sixth Directive, and secondly that the special method had been misapplied. The Tribunal rejected the arguments based on Articles 17 and 19 of the Sixth Directive, and decided with respect to the special method that the sale of shares in question constituted an incidental financial transaction. The Tribunal did not make a final determination of the consequences of that classification.

15

BLP appealed to the High Court against that decision, arguing that the Tribunal had interpreted Articles 17 and 19 of the Sixth Directive incorrectly. It conceded that the points of Community law raised in the appeal would alone determine the outcome of the appeal.

16

According to BLP, in applying Articles 17 and 19 of the Sixth Directive and in particular in interpreting the phrase ‘for the purposes of his taxable transactions’ in Article 17(2), attention must not be focused on the immediate transaction in which BLP (by selling the Berg shares) made a taxable supply. Instead, in the interests of fiscal neutrality, the focus must be the wider purpose of that supply, namely the discharge of BLP's bank debts. The sale of the shares represents an incidental financial transaction, which was part of BLP's overall strategy in the conduct of its core business and the making of its taxable supplies of goods or services.

17

The Commissioners, on the other hand, contended that where services are supplied to a taxable person and are used, as in the present case, for an exempt supply, input tax is not deductible. The purpose of the exempt supply is irrelevant, above all because only the amount of VAT borne directly by the various cost components of a taxable transaction within the meaning of Article 2 of the First Directive can be deducted. If, as in the present case, a taxable person makes an exempt supply in order to raise money for discharging debts, the input tax on cost components of the exempt supply does not constitute VAT borne directly by the cost components of the taxable person's taxable transactions.

18

Before the hearing of the appeal, BLP had applied for a reference to be made to the Court of Justice for a preliminary ruling under Article 177 of the Treaty. The High Court refused the application. BLP appealed against that decision to the Court of Appeal, which upheld the appeal and remitted the matter to another judge of the High Court, on the ground that the High Court had not fully observed the guidelines for the application of Article 177 of the EC Treaty laid down by the Court of Appeal in Bulmer v Bollinger.(6) The High Court thereupon referred the following questions to the Court:

‘(1)

Having regard to Article 2 of the First Directive and Article 17 of the Sixth Directive, where a taxable person (‘A’ ) supplies services to another taxable person (‘B’ ), and those services are used by B for an exempt transaction (sale of shares) which was treated as an ‘incidental financial transaction’ and whose purpose and result was to raise money to discharge all of B's indebtedness, are those services supplied by A:

(a)

services used for the purpose of an exempt transaction such that input tax thereon is not deductible

(b)

services used for the purpose of taxable transactions (namely B's core business of making taxable supplies) such that input tax thereon is deductible in whole

(c)

services used for both exempt and taxable transactions such that the input tax thereon is deductible in accordance with Article 17(5) of the Sixth Directive?

(2)

If the answer to question 1 is that (c) applies and if a Member State has, in the exercise of its discretion under Article 17(5) of the Sixth Directive, adopted a special method falling within Article 17(5)(c) for determining the amount of the input tax which can be deducted, does Article 19 of the Sixth Directive have any application to the determination of the amount of the deductible input tax?

(3)

If the answer to question 2 is that Article 19 does apply to the determination of the amount of the deductible input tax, does Article 19(2) allow full deduction of the input tax by excluding the share sale from the calculation of the deductible proportion under Article 19(1) as being an ‘incidental financial transaction’ ?’

19

Written and oral observations on all or some of the questions were made by BLP, the United Kingdom, the Hellenic Republic and the Commission.

20

In its observations the Commission prefaced its actual discussion of the questions referred for a preliminary ruling with extensive remarks on the problem of whether the sale of the shares falls within the scope of the Sixth Directive at all. If that is not the case, in the Commission's view, the question of deductibility does not arise. If, on the other hand, the transaction comes under the Sixth Directive, in that the sale of the shares constitutes a supply of services for consideration in favour of BLP's subsidiaries, the deductibility of the input tax must be assessed in accordance with Article 17 of that directive. Which of those two possibilities is correct depends, in view of the Polysar judgment,(7) on whether BLP carried out the sale for its own purposes, namely in its capacity as a ‘holding’ company, or in its capacity as a ‘management’ company, in connection with and as part of the totality of management and other services supplied by it to its subsidiaries for consideration. That question must be examined in the light of the actual facts and the applicable national law.

21

At the hearing, however, the Commission stated that it had raised the point only for the sake of completeness. The discussion before the Court of Justice had to remain within the bounds marked out by the national court's questions. The Commission too therefore started from the premise accepted by all the parties, namely that the sale of shares in question constitutes an exempt transaction within the meaning of Article 13 of the Sixth Directive.

22

Further details of the arguments put forward by the parties to the proceedings will be dealt with, so far as appropriate, in the following section of this Opinion.

Bo. Opinion

The subject-matter of the first question

23

According to the wording and structure of the order for reference, both the so-called core business of BLP and the sale of the shares fall within the scope of the Sixth Directive. That assumption is no longer challenged by the Commission, as can be seen from its observations at the hearing.

24

It is also apparent from the order for reference that BLP's ‘core business’, that is to say, the entire activity o with the exception of the sale of the shares o carried on by that firm as a taxable person during the period in question, related exclusively to taxable transactions, whereas the sale of the shares itself constitutes an exempt transaction (see Article 13 B(d)(5) of the Sixth Directive).

25

On that assumption, the High Court wishes to know whether the input tax on services which are used by the taxable person ‘for an exempt transaction’, and which by being so attributed(8) are excluded from deduction in accordance with the principle laid down in Article 17(2)(a) of the Sixth Directive, can nevertheless be deducted in view of the particular situation in this case. According to the argument put forward by BLP before the High Court, which that court refers for examination by this Court, there is a right to deduct input tax here, because there is a link between the exempt transaction (the sale of the shares) and the taxable transactions (the core business of BLP): the former, as the first question states,

o was treated as an ‘incidental financial transaction’

o whose purpose and result was to raise money to discharge all of the taxable person's indebtedness.

26

In the context of the first question, it must therefore be examined how those factors, which are regarded by BLP as connecting links between the exempt transaction and the taxable transactions, affect the principle and (if appropriate) the extent of the right to deduct.

The answer to the first question

27. I

According to BLP's main argument in support of its theory, set out in detail in its written observations, the phrase ‘for the purposes of his taxable transactions’ in Article 17(2) of the Sixth Directive must be given a wide interpretation. Regard should be had not to the (exempt) transaction which has been directly served by the service, but to the taxable person's principal activity (here the taxable transactions), if, as in this case, the discharge of indebtedness brought about by the exempt transaction is for the benefit of that activity.

28. (a)

In support of that view, BLP argues primarily that the Community provision on VAT does not require the cost component on which input tax has been paid to be directly incorporated in the finished product. BLP thus relies on the system laid down by the Community rules on VAT with reference to the deduction of input tax. The above argument, including the details put forward in its support, must therefore be considered in the context of that system.

29

According to Article 2(1) of the First Directive, the common system of value added tax is based on the principle of the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged. In order for the ‘number of transactions which take place in the production and distribution process before the stage at which tax is charged’ not to influence the amount of VAT ultimately due to the revenue authorities, Article 2(2) of the First Directive introduces the mechanism of deduction of input tax.

30

A consideration of those provisions together shows that the Community legislature, proceeding from an ideal image of ‘chains of transactions’ o to adopt the neat phrase used at the hearing by the representative of the United Kingdom o, intended to attach to each transaction only so much VAT liability as corresponds to the added value accruing in that transaction, so that there is to be deducted from the total amount the tax which has been occasioned by the preceding ‘link in the chain’.(9)

31

On the question whether the goods or services supplied to taxable persons, on which input tax has been charged, can be attributed to a transaction by the taxable person in such a way that deduction of input tax is justified, the Community legislature decided on a criterion corresponding to the system: the amount which is to be deducted as input tax must have been ‘borne directly by the various cost components’.

32

Article 17 et seq. of the Sixth Directive lays down specific rules on the deduction of input tax, in so far as relevant here, in two respects. Firstly, those articles take account of the circumstance that the Community legislature has in Article 13 et seq. exempted certain transactions from VAT. Input tax in respect of exempt transactions is not deductible in the common system of value added tax, because in such a case the taxable person acts as the final consumer, since he is unable to pass the VAT onto third parties.(10) Secondly, Article 17 et seq. takes account of the fact that some goods and services are by their nature to be attributed to several transactions of the taxable person, and that attribution may relate to the group of taxable transactions and the group of exempt transactions at the same time.

33

Those details logically do not change the fact that input tax can be deducted only to the extent that the goods or services on which it has been paid are ‘cost components’ of a taxable transaction. On the contrary, the identification of goods and services as such cost components becomes all the more important with the introduction of the category of exempt transactions, since those transactions do not give the right to deduct input tax, any more than economic operations do which are outside the value added tax system and thus even under the First Directive confer no right to deduct input tax.

34

It follows that, subject to divergent rules such as those in Article 17 et seq. of the Sixth Directive, the different types of transactions by the taxable person must be distinguished as clearly as possible. In particular, as follows from the system which has been demonstrated, in applying Article 17(2)(a) goods or services which have been identified as cost components of a specific exempt supply of goods or services cannot be attributed to other supplies of goods or services which are subject to VAT. The term ‘purposes’ in Article 17(2) must be interpreted in that light. That term therefore does not permit the clear distinction between taxable and exempt transactions to be blurred on the basis of considerations which are outside the system.

35

That conclusion is confirmed firstly by Article 17(5) of the Sixth Directive. That provision, without employing the word ‘purposes’, speaks merely of goods or services ‘used… for transactions’. In the context of that provision, however, the same criteria o naturally o as in Article 17(2) apply for the attribution of goods and services on which input tax has been paid. Secondly, the above conclusion is confirmed by Article 17(3). Article 17(3)(c) in particular provides for a precisely defined exception to the rule that transactions which (like the disposal of the shares in this case) are exempted from VAT under Article 13B(d)(5) confer no right to deduct input tax. That exception applies only ‘when the customer is established outside the Community or when these transactions are directly linked with goods intended to be exported to a country outside the Community’.

36

With respect to the present case, the High Court found, as mentioned above, that the services in question on which input tax had been paid were ‘used for [an] exempt transaction’ by the taxable person,(11) since those services, according to the relevant invoices, had been ‘supplied in connection with the disposal of the shares in Berg’.(12) It is thus established that those services form a cost component precisely of the exempt supply (effected by the sale of the shares).

37

That is not affected by the argument put forward by BLP at the hearing that the costs of the services on which input tax has been paid (and hence that input tax itself) are ultimately incorporated into the price of the goods and services which it sells by means of its taxable transactions. Even if it were possible to construct such an effect in commercial or book-keeping terms, that would merely be a cascade effect, which can always occur if taxable and exempt transactions are carried out at the same time within a unitary undertaking. That circumstance does not make the services in question into cost components of the taxable transactions and cannot therefore alter the attribution stated above.

38

On the basis of that attribution, the right to deduct input tax is excluded in the present case, it being of no relevance whether the sale of the shares was for the benefit of the taxable activity of the taxable person on the basis of the discharge of indebtedness intended and effected.

39

That conclusion is confirmed if one o so to speak, as a check on what has been said above o classifies the abovementioned operation (that is, by means of a transaction funds are raised for the benefit of the taxable activity of the person in question) in the VAT system. Under Article 2(1) of the Sixth Directive, supplies of goods and services are subject to VAT only if they are effected ‘for consideration’. That presupposes that there is a consideration (see Article 11A(1)(a) of the Sixth Directive) which can be expressed in money.(13) In the reality of business life it is in nearly all cases a monetary payment. Virtually every transaction which falls within the scope of the Sixth Directive can therefore be understood as a raising of funds for the benefit of the taxable person's activity and more precisely the taxable transactions which he may carry out. That characteristic, which attaches to every such transaction, is clearly not liable as such to span the division between taxable and exempt transactions and call into question the attribution on the basis of the criterion developed above.

40

All those considerations apply independently of whether the exempt transaction belongs to the essential object of the taxable person's undertaking or not. Contrary to what BLP appears to think, I thus see no distinction between the present case and the case of a taxable person whose essential trading activity comprehends both exempt and taxable transactions and who makes extensive use of exempt transactions in order to raise funds for the part of his activity which relates to the taxable transactions.(14)

41

Before I conclude this section on the system of the provisions on VAT, I must also briefly address an argument of BLP, put forward in the form of an example.

42

That example is of a bicycle manufacturer who engages the services of auditors and legal advisers. BLP submits that the work of the auditor or lawyer is not incorporated in the finished product and does not contribute to its manufacture. The input tax on those services is nevertheless deductible. That shows that it is not necessary for the cost component in question to be directly incorporated in the finished product.

43

I am unable to agree with that argument. It is indeed correct that in the example the services on which input tax has been paid have not physically been reflected in the product produced by the taxable person. The consideration paid for those services belongs, however, as part of the overheads, to the cost components of that product and must clearly therefore be attributed to the taxable person's taxable transactions, and only to such transactions.

44

It therefore follows from the system of the common rules on VAT that in the present case the input tax in question cannot be deducted.

45. (b)

In support of its argument(15) BLP further relies on the principle of fiscal neutrality, which it deduces from the recitals in the preamble to the First Directive(16) and the case-law, in particular the Rompelman(17) and Sofitam judgments.(18) In BLP's view, it is incompatible with that principle to give different fiscal treatment to the various forms of raising money. BLP refers in particular to the possibility that instead of selling the interest in the company it could have taken up a (long-term, secured) bank loan. The costs of advice incurred on taking up that loan would have been deductible in full. If in a case such as the present one the right to deduct were refused, that would, contrary to the said principle, lead to economic decisions being influenced by tax factors.

46

That argument does not hold water.

47

The objectives of the common system of VAT do not by any means require all forms of raising money to be treated alike. If the harmonization introduced with that system is intended to prevent distortion of conditions of competition, as is expressed in the recitals to the First Directive, that can only mean that operations of the same type are to be treated in the same way. The taking up of a loan and the selling of an interest in a company are not, however, operations of the same type for the purposes of the VAT system,(19) because that system focuses on transactions and makes a clear distinction between taxable and exempt transactions. If a taxable person sells an interest in a company, he is effecting an (independent) transaction within the meaning of the common VAT rules which, being an exempt transaction, excludes deduction of the incident input tax. If, by contrast, he takes up a loan, he does not himself thereby effect a transaction within the meaning of those rules. Instead he is the recipient of a service, which is the subject of a transaction by a third party. Under those circumstances the input tax charged on the advisory services supplied in connection with taking up the loan may be deducted, if it is attributable to taxable transactions.

48

That approach is consistent with the Rompelman and Sofitam judgments relied on by BLP. The Rompelman judgment concerned the question whether the acquisition of a real property right which is the necessary precondition for its exploitation (the exploitation being subject to VAT) is already part of the economic activity within the meaning of Article 4(1) of the Sixth Directive if (at the time of assessment) that exploitation is intended, but has not yet commenced. The Court's answer was that in principle it was. In the Sofitam case the Court had to decide whether dividends of an undertaking were to be included in the denominator of the calculation under Article 19(1) of the Sixth Directive or excluded from it. The Court chose the latter alternative, on the ground that dividends do not fall within the scope of VAT and their inclusion in the calculation under Article 19 would have distorted it. In view of the facts and the questions of law at issue in those two cases, neither of them is a relevant precedent here.

49

As to the general principle of fiscal neutrality recognized in those judgments, that principle is mentioned in connection with the observation that

‘the deduction system is meant to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities’

and that

‘the common system of VAT consequently ensures that all economic activities, whatever their purpose or result, provided that they are themselves subject to VAT, are taxed in a wholly neutral way.(20)

50

It follows from that context that the principle of fiscal neutrality cannot be considered independently of the ‘common system of VAT’ and that in its application account must be taken of the extent to which the taxable person's economic activities are ‘subject to VAT’.

51

The solution advocated here thus does not infringe the principle of fiscal neutrality as enshrined in the recitals in the preamble to the First Directive and in the case-law. On the contrary, this solution avoids different treatment being given to like transactions depending on whether the taxable person, in addition to exempt transactions, also effects taxable transactions. Instead, independently of such chance factors, all transactions which have the same characteristics are treated in the same way.

52. II

I must also, as a precaution, address the question whether the classification of the sale of the shares as an ‘incidental financial transaction’ leads to a right to deduct the input tax in question here.

53

In my opinion, it does not.

54

Article 17 does not provide for any special rule for such transactions. They are mentioned only in Article 19(2). Under that provision they are not excluded from the calculation of the proportion provided for in Article 19(1) for the case where goods and services are used both for transactions in respect of which input tax is deductible and for transactions in respect of which it is not deductible (Article 17(5), first subparagraph). This is not such a case, however, since the advisory services on which the input tax at issue here was charged were used entirely for an exempt transaction, so that under Article 17(2) that input tax is not deductible. I will deal with the interpretation of Article 19(2) shortly, in the context of my discussion of the third question, since that question presupposes that Article 17(5) and Article 19 apply to the present case.

55. III

For all those reasons, the national court's first question is to be answered in the sense set out in alternative (a), since in a case such as the present one the services on which input tax is charged are to be regarded as being used for the purposes of an exempt transaction, so that the input tax cannot be deducted.

56

Should the Court take that view, the second and third questions will become devoid of purpose, since those questions were asked only in the event that the answer to the first question was that alternative (c) applied. That would mean, in contrast to the solution I have suggested, that the services made use of by BLP were regarded as having been used for both exempt and taxable transactions, with the effect that the input tax on them could be deducted ‘in accordance with Article 17(5) of the Sixth Directive’.

57

I shall therefore consider the second and third questions below merely in the alternative.

The second question

58

By its second question the national court seeks to know whether Article 19 of the Sixth Directive has any application to the determination of the deductible input tax if a Member State has, on the basis of Article 17(5)(c), introduced a special method for determining that amount.

59

The answer follows clearly, in my opinion, from the wording of Article 17(5). While the second subparagraph of that provision provides for the application of Article 19 as the rule for calculation of the deductible amount, the third subparagraph, which starts with the word ‘however’, permits the Member States to provide for exceptions of greater or lesser scope to that rule.

60

To the extent that a particular type of case falls within such an exception, it is automatically withdrawn from Article 19. Thus indent (c) of the third subparagraph of Article 17, in question here, enables the Member States to authorize or prescribe the direct attribution of all or some goods or services and thereby restrict the application of the proportion rule in Article 19(1).

61

The second question would have to be answered to that effect. However, as a precaution, I point out that the special method applicable to BLP, in so far as is relevant here, coincides with Article 19(1) and (2), so that the answer is of purely theoretical value.

The third question

62

In the event that Article 19 applies to the determination of the amount of deductible input tax, the High Court asks whether Article 19(2) allows deduction in full of the input tax by excluding the sale of shares when calculating the deductible proportion of input tax under Article 19(1) as being an ‘incidental financial transaction’.

63

If, in accordance with the premise o which, as I have said, is incorrect o on which the question is based, the present case were regarded as a case of mixed use, in that the costs of advice in question were (as overheads) used both for taxable transactions and for an exempt incidental financial transaction, the input tax would be deductible under Article 19(2).

64

That provision must be seen in the light of the fact that the incidental transactions referred to there may constitute a large part of the total transactions, without however making any significant contribution to the overheads. In those circumstances it would be inappropriate to include the incidental transactions in the calculation of the proportion under Article 19(1). Instead those transactions are ‘excluded’ in accordance with Article 19(2). If, then, apart from the incidental transaction in question, all the taxable person's transactions are subject to VAT, the result is a proportion of 1:1 under Article 19(1). The input tax is then deductible in full. The third question would have to be answered to that effect.

Co. Conclusion

65

For the above reasons, I propose the following answer to the High Court's questions:

If a taxable person supplies another taxable person with services which the latter uses for an exempt transaction, in the sense that they constitute a cost component with respect to that transaction, the input tax on those services has been used for the purposes of an exempt transaction, within the meaning of Article 17 of the Sixth Directive, and, subject to any derogations from the common system of value added tax, cannot be deducted. That applies even if the exempt transaction was treated as an ‘incidental financial transaction’ and its purpose and result were to raise money for the discharge of the entire indebtedness of the other taxable person.

(*) Original language: German.

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