C-155/01 Cookies World

JUDGMENT OF THE COURT (First Chamber)

11 September 2003 *

In Case C-155/01,

REFERENCE to the Court under Article 234 EC by the Verwaltungsgerichtshof (Austria) for a preliminary ruling in the proceedings pending before that court between

Cookies World Vertriebsgesellschaft mbH iL

and

Finanzlandesdirektion für Tirol,

on the interpretation, in particular, of Articles 5 and 6 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 (OJ 1977 L 145, p. 1),

* Language of the case: German.

THE COURT (First Chamber),

composed of: M. Wathelet, President of the Chamber, P. Jann and A. Rosas (Rapporteur), Judges,

Advocate General: L.A. Geelhoed, Registrar: H.A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of:

— Cookies World Vertriebsgesellschaft mbH iL, by R. Kapferer, Wirtschaft sprüfer and Steuerberater,

— the Austrian Government, by H. Dossi, acting as Agent,

— the Commission of the European Communities, by K. Gross and E. Traversa, acting as Agents,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 10 October 2002, gives the following

Judgment

Legal context and the dispute

1By order of 29 March 2001, received at the Court on 11 April 2001, the Verwaltungsgerichtshof (Administrative Court) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation, in particular, of Articles 5 and 6 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 (OJ 1977 L 145, p. 1, 'the Sixth Directive').

2The question was raised in proceedings between Cookies World Vertriebgesells chaft mbH iL ('Cookies World') and Finanzlandesdirektion für Tirol (Regional Tax Authority for the Tyrol) regarding Cookies World's liability to value added tax ('VAT') for the use of a motor vehicle which it had leased from a German undertaking and used in Austria for the purposes of its business.

Legal background

Community rules

3Article 2(1) of the Sixth Directive makes the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such subject to VAT.

4Under Article 5(1) of the Sixth Directive "'[s]upply of goods" shall mean the transfer of the right to dispose of tangible property as owner'.

5Article 5(6) of the Sixth Directive provides:

'The application by a taxable person of goods forming part of his business assets for his private use... or more generally their application for purposes other than those of his business, where the value added tax on the goods in question or the component parts thereof was wholly or partly deductible, shall be treated as supplies made for consideration....'

6Article 5(7) of the Sixth Directive provides:

'Member States may treat as supplies made for consideration:

(a) the application by a taxable person for the purposes of his business of goods produced, constructed, extracted, processed, purchased or imported in the course of such business, where the value added tax on such goods, had they been acquired from another taxable person, would not be wholly deductible;

(b) the application of goods by a taxable person for the purposes of a non-taxable transaction, where the value added tax on such goods became wholly or partly deductible upon their acquisition or upon their application in accordance with subparagraph (a);

...'

7According to Article 6(1) of the Directive, '"[s]upply of services" shall mean any transaction which does not constitute a supply of goods within the meaning of Article 5'.

8The first subparagraph of Article 6(2) of the Sixth Directive is worded as follows:

'The following shall be treated as supplies of services for consideration:

(a) the use of goods forming part of the assets of a business for the private use of the taxable person... or more generally for purposes other than those of his business where the value added tax on such goods is wholly or partly deductible'.

9The second paragraph of Article 6(2) provides that the Member States may derogate from the provisions of that paragraph provided that such derogation does not lead to distortion of competition.

10Article 9(1) of the Sixth Directive states:

'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 where he has his permanent address or usually resides.'

11Article 9(2) of the Sixth Directive sets out a number of exceptions to that principle.

12Article 17(3) of the Sixth Directive sets out the principles governing the right to a deduction or refund of VAT paid on inputs.

13Article 17(6) and (7) of the Sixth Directive state:

'6. Before a period of four years at the latest has elapsed from the date of entry into force of this Directive, the Council, acting unanimously on a proposal from the Commission, shall decide what expenditure shall not be eligible for a deduction of value added tax. Value added tax shall in no circumstances be deductible on expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment.

Until the above rules come into force, Member States may retain all the exclusions provided for under their national laws when this Directive comes into force.

7. Subject to the consultation provided for in Article 29, each Member State may, for cyclical economic reasons, totally or partly exclude all or some capital goods or other goods from the system of deductions. To maintain identical conditions of competition, Member States may, instead of refusing deduction, tax the goods manufactured by the taxable person himself or which he has purchased in the country or imported, in such a way that the tax does not exceed the value added tax which would have been charged on the acquisition of similar goods.'

14Article 2 of the Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ 1979 L 331 p. 11, 'the Eighth Directive') provides:

'Each Member State shall refund to any taxable person who is not established in the territory of the country but who is established in another Member State, subject to the conditions laid down below, any value added tax charged in respect of services or movable property supplied to him by other taxable persons in the territory of the country or charged in respect of the importation of goods into the country, in so far as such goods and services are used for the purposes of the transactions referred to in Article 17(3)(a) and (b) of Directive 77/388/EEC and of the provision of services referred to in Article 1(b).'

15Under Article 5 of the Eighth Directive:

'For the purposes of this Directive, goods and services in respect of which tax may be refundable shall satisfy the conditions laid down in Article 17 of Directive 77/388/EEC as applicable in the Member State of refund.'

National law

— Legal position prior to the accession of the Republic of Austria to the European Union, that is until 31 December 1994

16Paragraph 3(11) of the Umsatzsteuergesetz 1972 (Austrian Law on Turnover Taxes, 'UStG 1972'), in the version published in the BGBl. No 636/1975, on 'other services', was worded as follows:

'A service is supplied within the national territory where the trader operates exclusively or for the most part within the national territory or where the trader permits an act within the national territory or a state of affairs within the national territory or omits an act within the national territory...'

17It is clear from the considerations set out by the national court that, under that provision, leasing transactions relating to a car were deemed to have been effected in Austria if the vehicle was predominantly used there.

18Paragraph 12(2)(2)(c) of the UStG 1972, in the version published in the BGBl. No 410/1988, which governed the supply of goods and the provision of services on national territory for business purposes, provided:

'Supplies of goods or supplies of services are not made for business purposes... if they are connected with the acquisition (manufacture), lease or use of cars, dual-purpose vehicles or motor-bicycles...'

— Legal position after the accession of the Republic of Austria to the European Union, that is from 1 January 1995

19Paragraph 3a(12) of the Umsatzsteuergesetz 1994, in the version published in the BGBl. No 21/1995 ('the UStG 1994'), is worded as follows:

'In any other case, a service is supplied at the place from which the trader operates his business. If the service is supplied from business premises, the place of the business premises shall constitute the place where the service is supplied.'

20It is clear from the file that, under that provision, leasing transactions relating to a car, even if the vehicle has been used mainly in Austria, are deemed to be effected in the Member State from which the supplier of the vehicle runs his undertaking.

21According to Paragraph 12(2)(2)(b) of the UStG 1994, supplies of goods, supplies of services or imports are not for business purposes if they are connected with the lease or use of cars, dual-purpose vehicles or motor-bicycles.

22Paragraph 1(1)(2)(d) of the UStG 1994, which was added to the UStG 1994 and came into force on 6 January 1995, establishes the criteria for own consumption and provides that it is subject to VAT in Austria. Own consumption is deemed to occur to the extent that a trader incurs expenditure (expenses) relating to supplies abroad which, if they had been effected to the trader within the national territory would not, under Paragraph 12(2)(2), have entitled the trader to deduction of input tax. That applies only, however, to the extent that the trader is entitled abroad to refund of the foreign input tax.

23It is clear from the file that the fiscal criteria laid down in Paragraph 1(1)(2)(d) of the UStG of 1994 are designed so that the exclusion of deduction of VAT in connection with the leasing of certain vehicles is applied in Austria in the same way, from the economic point of view, as it was until the end of 1994, that is, the date of Austria's accession to the European Union. As is apparent from paragraphs 16 to 18 of the present judgment, the leasing of vehicles gave rise, under the tax system laid down by the UStG 1972, to transactions subject to turnover tax in Austria, and the taxable person has not been able to deduct that tax. The legal position has been changed as a result of the accession of the Republic of Austria to the European Union and the transposition of the Sixth Directive. Leasing transactions are accordingly deemed to be effected in the Member State where the lessor of the vehicle has his business. That means that, in the absence of a provision such as that laid down in Paragraph 1(1)(2)(d) of the UStG 1994, such transactions are no longer taxable in Austria.

Main proceedings and the question referred for a preliminary ruling

24Cookies World is a limited company established in Austria which operates a commercial undertaking. It leased a car from a German undertaking which it used in Austria for the purposes of its business.

25By decision of 15 June 1999 the Finanzamt Schwaz (Tax Office, Schwaz) (Austria) assessed the turnover tax for Cookies World for 1997. On that occasion it included in the taxable turnover the car leasing charge, applying Paragraph 1(1)(2)(d) of theUStG 1994.

26Cookies World appealed against that decision, requesting that the turnover tax be assessed without including the leasing of the vehicle in question, that is by disregarding Paragraph 1(1)(2)(d) of the UStG 1994. The supply of the vehicle constituted a transaction which, for VAT purposes, was deemed to be effected in the place from which the trader carried on his business. As regards the leasing of vehicles under a contract, the place where that service is effected is generally the State in which the supplier of the vehicle has his place of business, in this case Germany, and is subject to tax there. Paragraph 1(1)(2)(d) of the UStG 1994 has the effect, however, of creating a second chargeable event for one and the same transaction. Such double taxation cannot be justified on the basis of the 'standstill' clause laid down in Article 17(6) of the Sixth Directive. That provision simply concerns the exclusion of the right to a deduction of VAT and not the introduction of events giving rise to VAT. Moreover, it permits only the retention of existing national measures. The event giving rise to VAT, referred to in Paragraph 1(1)(2)(d) of the UStG 1994, was first introduced into Austrian law on 6 January 1995 and cannot be reconciled with the conditions laid down by Community law.

27By decision of 20 July 2000 the Finanzlandesdirektion für Tirol dismissed the appeal by Cookies World. It considered that, until the Sixth Directive was amended, the Member States were entitled to retain national measures excluding deduction of VAT. That included taxation for personal use defined in Paragraph 1(1)(2)(d) of the UStG 1994. It served principally, for reasons of competition neutrality, to cancel out the effects of the refund of VAT that the trader was able to claim abroad.

28Cookies World appealed against that decision to the Verwaltungsgerichtshof. It argued that its turnover tax for 1997 had been assessed by applying a national measure contrary to Community law.

29Taking the view that the dispute before it required an interpretation of the Sixth Directive, the Verwaltungsgerichtshof decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

'Is it compatible with 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, in particular Articles 5 and 6 thereof, for a Member State to treat the following event as a taxable transaction: the incurring of expenditure relating to services supplied abroad that, if they had been supplied within the national territory to the trader, would not entitle the trader to a deduction of input tax?'

The question referred for a preliminary ruling

Observations submitted to the Court

30It is not disputed by the parties who have submitted observations that the hire of a vehicle under a leasing contract is a supply of services within the meaning of Article 6(1) of the Sixth Directive.

31Cookies World and the Commission submit that the place where that supply of services is taxed must be defined, in accordance with Article 9(1) of the Directive, on the basis of the place of business of the supplier of the vehicle subject to the leasing contract, in this case Germany.

32The Austrian Government admits that, in accordance with the Sixth Directive and Paragraph 3a(12) of the UStG 1994, services concerning the leasing of vehicles are deemed to be supplied in the Member State where the supplier has established his place of business. However, by virtue of Paragraph 12(2)(2) of the UStG 1994, such supplies are not deemed to be for business purposes. What is taxed in Austria is own consumption as defined in Paragraph l(l)(2)(d) of the UStG 1994. Such personal use requires a link with Austrian territory. That link exists, since the expenditure of the lessee of the vehicle reduces his assets and, moreover, the service is used in Austria. The application of Paragraph l(l)(2)(d) in conjunction with Paragraph 12(2)(2) of the UStG 1994 leads to the exclusion of the deduction of VAT being applied, from the economic point of view, in the same way as it was until the end of 1994, that is until the accession of the Republic of Austria to the European Union.

33Cookies World and the Commission take the view that the provisions of the Sixth Directive do not justify the fiscal criterion set out in Paragraph l(l)(2)(d) of the UStG 1994.

34The Austrian Government submits, to the contrary, that it is consistent with the Sixth Directive for a Member State to subject to VAT expenditure in relation to supplies effected abroad in the circumstances laid down in Paragraph l(l)(2)(d) of the UStG 1994. In order to determine the legal basis of such taxation, Articles 5(7), 6(2) and 17(6) of the Sixth Directive must be read together. Article 17(7) must also be taken into consideration.

35The Austrian Government points out that the first subparagraph of Article 6(2) of the Sixth Directive sets out the transactions which are treated as supplies of services for consideration. That provision is applicable generally, namely to all chargeable events of own consumption, where total or partial deduction is indeed due in one Member State as the place where the service is supplied but where the own consumption takes place in another Member State.

36The Austrian Government also relies, in support of its position, on the second subparagraph of Article 6(2) of the Sixth Directive, which provides that the Member States may derogate from the provisions of that article, provided that such derogations do not lead to distortion of competition. Paragraph l(1)(2)(d) of the UStG 1994 is designed to eliminate such distortions. In the absence of the constituent elements of own consumption within the meaning of that provision, services relating to cars, assuming that the transaction has given rise — in a Member State where the concept of business has a wider scope — to the refund of input tax, would be more favourable than services effected in Austria.

37Cookies World and the Commission point out that Article 6(2) of the Sixth Directive presupposes that the service was used for purposes other than those of the business. That is not the position in this case, since Cookies World used the vehicle for the purposes of its business. The Commission also observes that Paragraph 1(1)(2)(d) of the UStG 1994 assumes that the taxable person is entitled abroad to a refund of the foreign input tax. Such entitlement properly arises only where the relevant supply is used for purposes of business. Consequently, use of the vehicle cannot be regarded as use of part of the assets of the business for purposes other than those of the business within the meaning of Article 6(2), first subparagraph, (a), of the Sixth Directive. Moreover, the Commission considers that the second subparagraph of Article 6(2) in no way authorises the Member States to introduce chargeable events not provided for by the Sixth Directive.

38As regards the standstill clause provided for in Article 17(6) of the Sixth Directive, the Austrian Government argues that it merely maintained in force the rule referred to in Paragraph 12(2)(2) of the UStG 1972, which provides for the exclusion of VAT deduction for the lease of certain vehicles. Since Article 17(6) of the Sixth Directive authorises, in the cases mentioned, the exclusion of the right to deduct VAT, without stating the actual procedure, Member States are free to determine those procedures. The Austrian Government concedes that Paragraph 1(1)(2)(d) of the UStG 1994 was first inserted into the UStG 1994 on 6 January 1995. The interval between 1 January 1995 and 6 January 1995 was due, however, to logistical considerations.

39Cookies World and the Commission submit that Article 17(6) of the Sixth Directive concerns only the exclusion of the right to deduct VAT. No support can be found in that paragraph for the double taxation of one and the same economic transaction. Moreover, Paragraph 1(1)(2)(d) of the UStG 1994 was not part of national law at the time of the Republic of Austria's accession to the European Union, on 1 January 1995, although that is a prerequisite for applying the standstill clause provided for in Article 17(6) of the Sixth Directive.

40The Austrian Government submits that support for Paragraph l(l)(2)(d) of the UStG 1994 can also be found in Article 17(7) of the Sixth Directive. Even if that paragraph can be relied on only indirectly as the basis for the disputed provision, it nevertheless reveals the purpose of the directive, which is to thwart distortions of competition by providing special systems as regards the right to deduct VAT. Therefore, special systems in that area are lawful provided that they serve to restore fair competition. If it is accepted that special systems within the meaning of the last sentence of Article 17(7) of the Directive are not contrary to the Directive, it should be considered that that is also the case as far as a system such as that provided for in Paragraph 1(1)(2)(d) of the UStG 1994 is concerned.

41Cookies World and the Commission submit that the provision in question cannot be based on Article 17(7) of the Sixth Directive. That provision applies expressly subject to the consultation provided for in Article 29 of the Directive, which in this case did not take place. Moreover, Article 17(7) can justify only short-term exclusions and not permanent exclusion measures from the scheme of VAT deductions.

42Moreover, Cookies World wonders whether Paragraph 1(1)(2)(d) of the UStG 1994 is designed to protect Austrian car leasing businesses and whether it might infringe fundamental freedoms, in particular, the free movement of services laid down in Article 49 EC et seq. The Austrian Government contests that argument.

The Court's reply

43It is established that the dispute in the main proceedings concerns a transaction with cross-border aspects. An undertaking established in one Member State, Austria, leases a vehicle from an undertaking established in another Member State, Germany, with a view to using that vehicle mainly in Austria.

44In order to answer the question it is appropriate, at the outset, to consider whether the original taxation in Germany of the hire of a vehicle under a leasing contract and the subsequent refund of input tax were in accordance with the rules laid down by the Sixth and Eighth Directives.

45In that regard, it must be observed that the leasing of vehicles is a supply of services within the meaning of Article 6(1) of the Sixth Directive, in respect of which the place of taxation is determined in Article 9.

46As the Court has stated, inter alia, in Case 168/84 Berkbolz [1985] ECR 2251, paragraph 14, Article 9 of the Sixth Directive is designed to secure the rational delimitation of the respective areas covered by national VAT rules by determining in a uniform manner the place where services are deemed to be provided for tax purposes. That provision is deemed definitively to determine the Member State with exclusive competence to tax a supply of services.

47It is clear from the case-law of the Court that, in respect of the leasing of all forms of transport, the place of taxation laid down by the Sixth Directive is generally, for the sake of simplification, deemed to be the place where the supplier of the form of transport has established his business or has a fixed establishment and not the place where the goods hired out are used (see, to that effect, Case 51/88 Hamann [1989] ECR 767, paragraphs 17 and 18).

48It should be remembered that the Court has held that the term 'fixed establishment' in Article 9(1) of the Sixth Directive must be interpreted in such a way that an undertaking established in one Member State which hires out or leases a number of vehicles to clients established in another Member State, does not possess a fixed establishment in that other Member State by engaging in that hiring out or leasing (Case C-190/95 ARO Lease [1997] ECR I-4383).

49The fact remains that, in the circumstances of this case, the place where the supplier of the leased vehicle has established his business or has a fixed place of business is in Germany and the place of supply of the vehicle-leasing services is deemed to be in that State. Therefore, the VAT on the leasing of the vehicle had to be paid in Germany by the lessor of the vehicle who passes it on in the leasing charge for that vehicle.

50It is clear from the order for reference that Cookies World used the leased vehicle outside Germany for the purposes of its business. Under Article 17(3)(a) of the Sixth Directive, in conjunction with Articles 2 and 5 of the Eighth Directive, it was entitled to a refund of the VAT which had been passed on in Germany in the leasing charge for the vehicle in question.

51Accordingly, the taxation by the German authorities of the leasing of the vehicle in question and the subsequent refund to Cookies World of the input tax paid which was passed on in the leasing charge complied with the rules laid down in the Sixth and Eighth Directives.

52Next, it must be considered whether the Sixth Directive precludes a provision such as that in Paragraph l(l)(2)(d) of the UStG 1994, by which a Member State subjects to VAT the payment for services supplied in another Member State, by regarding as own consumption the fact that a trader incurs expenditure (expenses) relating to supplies of services abroad which, if they had been made to the trader within national territory, would not have enabled him to benefit from deduction of VAT. However, that is the case only if the trader is entitled abroad to a refund of the foreign input tax.

53The Austrian Government submits that the provision in question complies with the Sixth Directive. In support of its position it relies in particular on Articles 5(7) and 6(2) in conjunction with Article 17(6) of that Directive. It also relies, but more indirectly, on Article 17(7).

54The arguments put forward by the Austrian Government that the taxation provided for in Paragraph 1(1)(2)(d) of the UStG 1994 complies with Articles 5(7) and 6(2) of the Sixth Directive cannot be accepted.

55As regards Article 5(7) of the Sixth Directive it is sufficient to observe, as it is stated in paragraph 45 of the present judgment, that the leasing of vehicles is a supply of services within the meaning of Article 6(1) of the Sixth Directive rather than a supply of goods within the meaning of Article 5(1). Accordingly, there is no need to consider whether Paragraph 1(1)(2)(d) of the UStG 1994 correctly applies Article 5(7) of the Sixth Directive which concerns goods.

56As regards Article 6(2), first subparagraph, (a), of the Sixth Directive, it must be recalled that under that provision the use of goods forming part of the assets of a business for purposes other than those of its business is to be treated as supplies of services for consideration where the VAT on such goods is wholly or partly deductible. As is apparent from the Court's case-law, that provision is designed to prevent the non-taxation of business goods used for private purposes (see, inter alia Case 50/88 Kühne [1989] ECR 1925, paragraph 8).

57It is clear from the order for reference that the vehicle leased by Cookies World was used in Austria for the purposes of its business. Moreover, it must be recalled that Paragraph l(l)(2)(d) of the UStG 1994 assumes that the lessee was entitled abroad to a refund of foreign input tax. Such entitlement properly arises only in a case where the service is used for the purposes of the business in the State where the VAT was paid. Accordingly, since the use of the vehicle gave rise to entitlement to a refund, it cannot be considered at the same time as use for purposes other than those of the business within the meaning of Article 6(2), first subparagraph, (a), of the Sixth Directive.

58As to the second subparagraph of Article 6(2) of the Sixth Directive, it must be recalled that that provision authorises the Member States to derogate from the provisions of that article, provided that such derogation does not lead to distortion of competition.

59As the Advocate General pointed out in point 29 of his Opinion, the exceptions to harmonisation must be interpreted strictly. Any recourse to derogating systems entails divergence between the levels of the tax burden in the Member States. As the Commission rightly argues in paragraph 46 of its observations, the second subparagraph of Article 6(2) of the Sixth Directive must generally be interpreted as meaning that the Member States may refrain from treating certain supplies or uses as services supplied for consideration. On the other hand, that provision in no way authorises the Member States to provide for chargeable events not referred to in the first subparagraph of Article 6(2) of the Sixth Directive.

60Finally, the taxation in Austria by the Finanzamt Schwaz was based on the charge for the vehicle leased in Germany by Cookies World, that is the consideration for the use of the vehicle under a leasing contract. As it is clear from paragraph 51 of the present judgment, the leasing of the vehicle in question had already lawfully been subject to VAT in Germany. To tax a supply of services in another Member State when it has already lawfully been subject to VAT in the State of the supplier of the services gives rise to double taxation contrary to the principle of fiscal neutrality inherent in the common system of VAT. The fact that VAT had to be paid by the lessor of the vehicle in Germany while, in Austria, that obligation fell on Cookies World does nothing to change the fact that in reality one and the same economic transaction, that is, the hire of a vehicle under a leasing contract, was taxed twice.

61The Austrian Government's argument that justification for taxation such as that laid down in Paragraph 1(1)(2)(d) of the UStG 1994 results from the application of Article 17(6) and (7) of the Sixth Directive must also be dismissed.

62Under Article 17(6) of the Sixth Directive, and in particular the second subparagraph, the Member States are authorised to retain their existing legislation as at the date of entry into force of the Sixth Directive in regard to exclusion from the right of deduction until such time as the Council has adopted the provisions envisaged by that article (see Case C-345/99 Commission v France [2001] ECR I-4493, paragraph 19).

63It appears from the file that Paragraph 1(1)(2)(d) of the UStG 1994 is designed so that the exclusion of the deduction of VAT in connection with the leasing of certain vehicles is applied in Austria in the same way, from the economic point of view, as it was until the end of 1994, that is, at the time of Austria's accession to the European Union. It seems that the Austrian Government has achieved the objective of retaining the existing legislation on the subject only indirectly. A new chargeable event for VAT purposes has been introduced in the taxation scheme by way of a new provision, which is not the situation referred to by Article 17(6) of the Sixth Directive.

64In any case, even supposing that Article 17(6) of the Sixth Directive was generally applicable to the facts in the main proceedings, it must be observed that the procedural requirements laid down by that provision for the retention of the national scheme for deduction of VAT are not satisfied.

65The Sixth Directive entered into force in the Republic of Austria on the date of its accession to the European Union, 1 January 1995. It is therefore that date which is relevant for the purpose of the application of the second subparagraph of Article 17(6) of the Sixth Directive in so far as concerns that Member State.

66It is apparent from the order for reference that Paragraph 1(1)(2)(d) of the UStG 1994 first entered into force on 6 January 1995. As the Court has already held in Case C-40/00 Commission v France [2001] ECR I-4539, paragraph 17, national legislation does not constitute a derogation permitted by the second subparagraph of Article 17(6) of the Sixth Directive if its effect is to increase, after the entry into force of the Sixth Directive, the extent of existing exclusions, thus diverging from the objective of that directive.

67As far as concerns Article 17(7) of the Sixth Directive, which is relied on indirectly by the Austrian Government, it is not necessary to rule on the question whether the national measures in question in the main proceedings are of a temporary nature and designed to deal with a cyclical economic situation; it is nevertheless common ground that the Austrian authorities did not consult the VAT Committee before adopting Paragraph 1(1)(2)(d) of the UStG 1994. The Austrian Government cannot therefore rely on Article 17(7) of the Sixth Directive to the detriment of taxable persons (see, by way of analogy, concerning Article 27(1) and (5) of the Sixth Directive, Case C-97/90 Lennartz [1991] ECR I-3795, paragraph 34).

68In the light of the foregoing, the answer to the question referred by the national court must be that the provisions of the Sixth Directive preclude a measure of a Member State which provides that payment for services supplied in other Member States to a person in the first Member State is subject to VAT whereas, had the services in question been supplied within the territory of the country, the person to whom they were supplied would not have been entitled to deduction of input tax.

Costs

Costs

69The costs incurred by the Austrian Government and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds,

THE COURT (First Chamber),

in answer to the question referred to it by the Verwaltungsgerichtshof by order of 29 March 2001, hereby rules:

The provisions 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 preclude a measure of a Member State which provides that payment for services supplied in other Member States to a person in the first Member State is subject to VAT whereas, had the services in question been supplied within the territory of the country, the person to whom they were supplied would not have been entitled to deduction of input tax.

Wathelet Jann Rosas

Delivered in open court in Luxembourg on 11 September 2003.

R. Grass M. Wathelet

Registrar President of the First Chamber

OPINION OF ADVOCATE GENERAL GEELHOED delivered on 10 October 2002 1

I — Introduction

1In this case the Austrian Verwaltungsgerichtshof has referred to the Court a question concerning the interpretation of 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 (hereinafter: 'the Sixth Directive').

2In particular, this question relates to the permissibility of an Austrian tax measure which regards as a taxable transaction the lease of a vehicle from a lessor established in another Member State. Moreover, this measure provides that no right to deduct VAT exists in respect of such leasing. Nor does such right exist where a vehicle is leased from a business established in Austria. The question is whether this exclusion from the right to deduct input tax is compatible with the Sixth Directive. In this connection Article 9 of the Sixth Directive, which relates to the place of taxable transactions, and Article 17, which governs the right to deduct input tax and the exemptions thereto, are of particular relevance.

3This case bears a close relationship to Metropol Treuhand and Stadler, on which I delivered my opinion on 4 October 2001 and on which the Court gave judgment on 8 January 2002. 3 Both cases concern a national Austrian tax rule which contains a derogation from the principle of the deduction of VAT safeguarded by Community law and which did not become applicable until (shortly) after Austria's accession to the European Union. An important difference between the two cases is the cross-border element. The present case concerns a transaction between two undertakings established in different Member States and therefore raises the possibility of the double application of VAT.

II — Legal framework

A — European law

4Goods and services are defined in Articles 5 and 6 of the Sixth Directive. In particular, Article 6(2) provides as follows: 'The following shall be treated as supplies of services for consideration:

(a) the use of goods forming part of the assets of a business for the private use of the taxable person or of his staff or more generally for purposes other than those of his business where the value added tax on such goods is wholly or partly deductible;

(b) supplies of services carried out free of charge by the taxable person for his own private use or that of his staff or more generally for purposes other than those of his business.

Member States may derogate from the provisions of this paragraph provided that such derogation does not lead to distortion of competition.'

5Article 9(1) of the Sixth Directive lays the principal rule governing the place where a service is supplied. Under this principal rule: '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 where he has his permanent address or usually resides.' Article 9(2) provides for exceptions to this principal rule, inter alia also so as to allow, in special cases, the charging of VAT at the place where the customer of the service is established (paragraph (e)). Such a special case is the hiring out of movable tangible property which does not, however, cover forms of transport. 4

6Article 17(2) provides, in so far as is relevant, as follows,:

'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;

(b) value added tax due or paid in respect of imported goods;

(c) value added tax due under Articles 5(7)(a) and 6(3).'

7Article 17(6) is particularly relevant to these proceedings. It provides: 'Before a period of four years at the latest has elapsed from the date of entry into force of this Directive, the Council, acting unanimously on a proposal from the Commission, shall decide what expenditure shall not be eligible for a deduction of value added tax. Value added tax shall in no circumstances be deductible on expenditure which is not strictly business expenditure, such as that on luxuries, amusements or entertainment. Until the above rules come into force, Member States may retain all the exclusions provided for under their national laws when this Directive comes into force.'

8A special power for the Member States to exclude the right to deduct VAT follows from Article 17(7): 'Subject to the consultation provided for in Article 29, each Member State may, for cyclical economic reasons, totally or partly exclude all or some capital goods or other goods from the system of deductions.'

9The Eighth VAT Directive 5 lays down the rules governing the reimbursement of VAT to undertakings established in another Member State. Article 2 of this directive provides: 'Each Member State shall refund to any taxable person who is not established in the territory of the country but who is established in another Member State, subject to the conditions laid down below, any value added tax charged in respect of services or movable property supplied to him by other taxable persons in the territory of the country or charged in respect of the importation of goods into the country.' Article 5 of the Eighth Directive states: 'For the purposes of this Directive, goods and services in respect of which tax may be refundable shall satisfy the conditions laid down in Article 17 of Directive 77/388/EEC as applicable in the Member State of refund.'

B — National law

10The Umsatzsteuergesetz 1972 (Law on Turnover Taxes 1972; hereinafter: 'the UStG 1972') was in force in Austria up until the accession of the Republic of Austria to the European Union on 1 January 1995.

11Paragraph 3(11) of that law 6 provides:

'A service is supplied within the national territory where the trader operates exclusively or for the most part within the national territory or where the trader permits an act within the national territory or a state of affairs within the national territory or omits an act within the national territory.'

In the view of the national court, this provision meant that leasing transactions relating to a car were deemed to have been carried out in Austria where the vehicle was used predominantly in Austria.

12Paragraph 12(2)(2) of the same law, in so far as is relevant, provides as follows:

'Supplies of goods or supplies of services are not made for business purposes if... they are connected with the acquisition (manufacture), lease or use of cars, dual-purpose vehicles or motor-bicycles...'

13As of 1 January 1995 — the date of accession to the European Union ·— the UStG 1972 was superseded by the Umsatzsteuergesetz 1994 (hereinafter: 'the UStG 1994').

14Paragraph 3a(12) of the UStG 1994 provides:

'In any other case, a service is supplied at the place from which the trader operates his business. If the service is supplied from business premises, the place of the business premises shall constitute the place where the service is supplied.'

In the view of the national court, this provision means that leasing transactions relating to a car are deemed to have been carried out in the Member State from which the lessor operates its business, even if the vehicle is used predominantly in Austria.

15Paragraph 12(2)(2) of the UStG 1994 is — in so far as is relevant here — identical to Paragraph 12(2)(2) of the UStG 1972 as reproduced above.

16As of 6 January 1995 Paragraph 1(1) of the UStG 1994 provides as follows: 8 'The following transactions shall be subject to turnover tax:... Own consumption within the national territory. Own consumption shall be deemed to occur... to the extent that a trader incurs expenditure (expenses) relating to supplies abroad which, if they had been made to the trader within the national territory, would under Paragraph 12(2)(2) not have entitled the trader to a deduction of input tax; this applies only to the extent that the trader has a claim abroad to reimbursement of the foreign input tax....'

HI — Factual and procedural background

17Cookies World VertriebsgmbH iL. (hereinafter: 'Cookies World'), the claimant in the main proceedings, is a private limited company established in Austria which carries on a trading business. In the capacity of lessee, it leased a car from a German undertaking which it used in Austria for the purposes of its business.

18By notice of 15 June 1996 the Finanzamt (Tax Office) Schwaz assessed the turnover tax of Cookies World in respect of 1997. The rent for the lease car was added to the taxable transactions. That addition was made under Paragraph 1(1) of the UStG 1994.

19Cookies World lodged an appeal, applying for its turnover tax to be assessed without regard to the abovementioned provision. It claims that the transfer of use of vehicles is a service which in the context of turnover tax is supplied at the place from which the trader operates his business. In the case of the leasing of vehicles, the place in which the service is provided is in principle the State in which the lessor has established his business, which in the present case is therefore Germany. It is there that the event is taxable. Further chargeable events are not envisaged by Community law. However, Paragraph 1(1) of the UStG 1994 has created a second chargeable event for turnover tax in respect of the same transaction (in addition to the taxation, in conformity with the Sixth Directive, in the State in which the lessor has established his business). As a result the same transaction is taxed twice. In the view of Cookies World, there is no possible justification for this under Article 17(6) of the Sixth Directive because that provision relates only to the exclusion of the right to deduct VAT. Furthermore, it merely allows existing laws to be retained. However, the chargeable event in Paragraph 1(1) of the UStG 1994 has been part of Austrian law only since 6 January 1995.

20By decision of 20 July 2000 the Finanz landesdirektion für Tirol (Tyrol Regional Tax Authority) dismissed the appeal brought.by Cookies World. It considered that the Member States could — pending any amendment of the Sixth Directive — retain national exclusions from the right to deduct input tax. This power of the Member States also covered taxation of own consumption, as provided for in Austrian law. In the view of the Finanzland esdirektion, this serves primarily, for reasons of competition neutrality, to cancel out the effect of deduction of VAT claimed abroad.

21Cookies World appealed against that decision to the Verwaltungsgerichtshof. It claims the assessment of 1997 turnover tax was made under a national provision that is contrary to Community law.

22By order of the Verwaltungsgerichtshof (Austria) of 29 March 2001, received at the Court Registry on 11 April 2001, a reference was then made to the Court of Justice for a preliminary ruling on the following question:

'Is it compatible with the Sixth Directive, in particular Articles 5 and 6 thereof, for a Member State to treat the following event as a taxable transaction: the incurring of expenditure relating to services supplied abroad that, if they had been supplied within the national territory to the trader, would not entitle the trader to a deduction of input tax?'

23In these proceedings written observations were submitted to the Court by Cookies World, the Austrian Government and the Commission. There was no hearing.

IV — The essence of the question referred for a preliminary ruling

24I infer from the question referred for a preliminary ruling and the facts in the main proceedings, as set out in the order for reference, that the question referred by the national court essentially contains two parts. Firstly, can the Sixth Directive form the basis for charging VAT on a transaction which is concluded in another Member State and which in principle is also subject to VAT in that other Member State? Secondly, what is the scope of the power of the Member States to derogate from the principle of the deduction of VAT as set out in Article 17(2) of the Sixth Directive?

25If it must be concluded that there is no power to charge VAT on an activity in respect of which VAT is already due in another Member State, the Court need not answer the second part of the question.

26If it must be concluded that this power does exist — or at least if such possibility cannot be excluded — the second part of the question arises. Then the answer given by the Court will be determined to a large extent by recent case-law concerning Article 17(6) and (7). I referred to the judgment in Metropol Treuhand and Stadler earlier at paragraph 3 of this Opinion. Two judgments of 14 June 2001 in Commission v France are also relevant. V — The first part of the question: Charg

ing of VAT on a transaction in another Member State

27It is established that this case relates to a transaction with cross-border elements. An undertaking in Austria leases a car from an undertaking in Germany with the aim of using that car primarily in Austria.

28The guiding principle of the Sixth Directive in respect of transactions with cross-border elements within the European Community means that both double application and non-application of VAT must be avoided.

29This principle is one of the bases which the Community legislature chose when drawing up the Sixth Directive and which the Court has repeatedly confirmed. These principles are as follows:

— tax neutrality: ensuring that all economic activities, whatever their purpose or results, provided that they are themselves subject to VAT, are taxed in a wholly neutral way;

— equality of tax treatment in order to counter distortion of competition. In this connection exceptions to harmonisation must be interpreted strictly. They apply only in the cases expressly provided for in the Sixth Directive. That is because each exception results in increased divergence in the tax burden in the Member States.

30In order to give specific definition to the abovementioned guiding principle, Articles 8 and 9 contain detailed rules on determination of the place of a taxable transaction. As regards supply of services, the principal rule is laid down in Article 9(1) of the Sixth Directive: it is the place where the supplier has established his business. There is an exception to this principal rule in respect of the hiring out of goods but this exception does not apply to vehicles. Reasons of control underlie this exception to the exception.

31In the context as I have described it, it is the guiding principle which determines the answer to the first part of the question referred by the national court.

32In this regard I would like to return to the facts of the main proceedings. If it is established that the leasing in Germany constitutes a taxable transaction, it follows from this principle that the leasing in Austria cannot be subject to VAT. This is also the view which Cookies World and the Commission take in the present proceedings.

33The Austrian Government, however, takes a different view. In Austria it is own consumption resulting from the use of the car by the lessee that is taxed. The place of this own consumption must be determined by analogy with the rules applicable to goods and services laid down in the Sixth Directive. In respect of such own consumption there must be a connection with Austrian territory. There is such a connection since the expenses incurred by the lessee in this respect involve a reduction in assets and, moreover, the use of the service takes place in Austria. The Austrian Government refers to Articles 5(6) and 6(2) of the Sixth Directive under which the supply or use of business assets for private use can be regarded as a chargeable event. In this regard the Austrian Government also considers that it is important not to view the various provisions in isolation but — as I understand the Austrian Government — that it is the interrelationship between them that is decisive.

34The facts in the main proceedings do indeed show that there is own consumption in Austria. However, this own consumption is not therefore the relevant chargeable event as regards the application of the Sixth Directive. That chargeable event is the leasing which took place in Germany. As the Court held in its judgment in ARO Lease, the leasing of vehicles constitutes a supply of services within the meaning of Article 9 of the Sixth Directive.

35Furthermore, as regards the leasing of a car the Court held as follows in that judgment:

— it is evident from the preamble to the directive that, as regards the hiring out of forms of transport, Article 9(1) should, for reasons of control, be strictly applied, the place where the supplier has established his business being treated as the place of supply of such services;

— under Article 9(2)(e) of the directive, 'all forms of transport' are expressly excluded from the derogation whereby, for the 'hiring out of movable tangible property', the place where the services are supplied is the place where the customer has established his business or has a fixed establishment;

— since forms of transport may easily cross frontiers, it is difficult, if not impossible, to determine the place of their utilisation and in each case a practical criterion must therefore be laid down for charging VAT. Consequently, for the hiring out of all forms of transport, the directive provided that the service should be deemed to be supplied not at the place where the goods hired out are used but, with a view to simplification and in conformity with the general rule, at the place where the supplier has established his business.

36To sum up, this case-law of the Court leaves no scope for the charging of VAT on leasing in the Member State of use. In this regard I also refer to the guiding principle governing the charging of VAT, as I have described it above, that is to say there must be no double taxation of the same event.

37Nor does the judgment in the case of 15 Monte Dei Paschi Di Siena, to which Cookies World, the Commission and the Austrian Government all refer, suggest otherwise. In that judgment the Court examines the situation in which a taxable person is liable for VAT both in the country in which he is established and in another Member State. However, in the present case Cookies World is not liable for VAT on the transaction at issue in the country of establishment.

38It could be argued that the VAT in Austria was charged in respect of another event, that is to say the own consumption itself. In that case there would be no transaction with the leasing company but use of goods forming part of the assets of a business for the private use of the taxable person to be treated as supply of a service for consideration as laid down in Article 6(2) of the Sixth Directive. The final sentence of that provision allows the Member States the necessary scope. However, this argument does not bear scrutiny. The facts in the main proceedings show clearly that the taxable transaction concerns the leasing in Germany. The tax assessment of the Finanzamt Schwaz at issue relates to the rent for the leased vehicle. Paragraph 1(1) of the UStG 1994, which the Austrian Government takes as a basis, also shows that it is the same event that is taxed.

39To a large extent the Austrian Government bases its reasons for the permissibility of the measure at issue on an appreciation of the provisions of the Sixth Directive in relation to one another. It puts forward economic arguments. It contends that the exclusion of the right to deduct input tax cannot be restricted to lease contracts concluded with an Austrian lessor. Otherwise competition would be distorted.

40Although I generally attach great importance to the elimination of distortions of competition within the common market, I do not consider this argument to be a strong one. The taxable transaction takes place in another Member State which applies the Sixth Directive in full (including the right to deduct input tax). Austria makes use of an exception to the Sixth Directive. Naturally, use of this exception can in no way result in the taxable persons established in their own Member State having no entitlement to a benefit available to them under the law of the other Member State and which, it should be noted, is based on an EC directive.

41Cookies World also states that the national legislation at issue, which serves solely to protect Austrian suppliers, is contrary to Article 49 EC. I consider that this argument is not relevant to the present case. Only if it is established that the Austrian legislature has the power to regulate the charging of VAT in a case such as the present — if such charging has not (yet) been fully harmonised — does Article 49 EC come into play. Having regard to the above considerations, the Austrian legislature has no such power.

42By way of illustration, I refer in this regard to the recent judgment in Cura Anlagen. That judgment does not relate to turnover tax but to restrictions in Austrian legislation on leasing cars outside Austria. In this judgment the Court referred to its case-law according to which Article 49 EC also precludes the application of any national legislation which has the effect of making the provision of services between Member States more difficult than the provision of services purely within one Member State. Such a restriction on freedom of movement can be justified only by a reason relating to the public interest recognised in EU law and, moreover, the principle of proportionality must be observed. 8 In my view, the Austrian measure at issue does not, by definition, have the effect of making the leasing of a vehicle in another Member State more difficult than within that Member State. It results precisely in more equal conditions. Therefore, if such an examination in the light of Article 49 EC were necessary — quod non — the question would still arise as to whether or not the Austrian provision at issue constitutes an infringement of that article of the Treaty.

43Finally, I should point out the following. Article 17(6) of the Sixth Directive grants the Member States the power, under certain circumstances, to retain an exemption to the right to deduct VAT. I will examine the content of this power below when considering the second part of the question. Prior to doing so, I should state in this regard that this power cannot be used to change the place of a chargeable event, as follows from the Sixth Directive. Therefore, Article 17(6) has no bearing on the answer to the first part of the question. In that sense I agree with Cookies World and the Commission in so far as they contend that the Member States can make use of Article 17(6) only to retain an exception to the right to deduct input tax which exists in their national law.

VI — The second part of the question:

derogation from the principle of the deduction of VAT

44I stated above that the Sixth Directive grants no power to charge VAT in the Member State in which a vehicle leased in another Member State is used. This being so, the second part of the question need not be answered. Therefore, my consideration of this second part of the question is purely by way of an addition.

45In my earlier opinions concerning Article 17 of the Sixth Directive, I pointed to the nature of the Sixth Directive and the role which the right to deduct input tax plays therein. The Court construes the principal rule of Article 17(2) as a right in principle. Therefore, it follows that the possible exceptions to the ability to deduct VAT are limited in nature. In Lennartz the Court held that the right to deduct input tax must be exercised in respect of all the taxes charged on transactions. Such limitations on the right of deduction must be applied in a similar manner in all the Member States and therefore derogations are permitted only in the cases expressly provided for in the Sixth Directive. Moreover, provisions which contain possible exceptions must be interpreted strictly.

46The second subparagraph of Article 17(6) constitutes an exception to this principle and is applicable until the Council lays down the provisions referred to in the first paragraph of Article 17(6). It is a standstill clause in nature which permits the Member States to retain the national provisions actually applied until the Council lays down Community rules governing exemptions from the right to deduct VAT.

47As regards Austria, this means that it may retain the exceptions to the ability to deduct input tax in so far as they existed at the time of accession to the European Union (1 January 1995). After that time it may no longer adopt measures which increase the extent of existing exclusions, thus diverging from the objective of the Sixth Directive. If an existing exclusion is withdrawn wholly or in part it cannot subsequently be reintroduced.

48It is established that the national measure at issue, namely Paragraph 1(1) of the UStG 1994, was not introduced until 6 January 1995, that is to say a few days after accession. The Austrian Government puts this down to a logistical reason connected with the national legislative procedure.

49In my view, the fact that the relevant provision was incorporated into Austrian legislation a few days after accession — and not only after a longer period — is immaterial. The basis for this view is as follows. Firstly, the exceptions to the right to deduct input tax must be interpreted strictly. They apply only in so far as they are expressly provided for. This is not so in the present case. Secondly, the specific exception contained in the second paragraph of Article 17(6) is intended to be a standstill clause and therefore specifically does not have the aim of empowering a new Member State to adapt national legislation on accession and thereby to distance itself from the acquis communautaire.

50I should also note that, to my mind, it is immaterial that under Paragraph 3(11) of the UStG 1972 in force until 1 January 1995 — at least according to the national court — leasing transactions were deemed to have been carried out in Austria where the vehicle was used predominantly in Austria. The Austrian legislature deliberately chose not to incorporate this provision in this form into the UStG 1994. Consequently, this provision was no longer valid law, irrespective of whether or not Paragraph 3(11) of the UStG 1972 is substantively the same as Paragraph 1(1) of the UStG 1994.

51.1 therefore conclude that — even if the second subparagraph of Article 17(6) might be applicable to a chargeable event which occurs in another Member State, quod non — this provision cannot be applied to create an exception to the right to deduct input tax shortly after Austria's accession to the European Union.

52This brings me to the power of a Member State to create an exclusion to the right to deduct input tax on grounds of competition pursuant to Article 17(7) of the Sixth Directive. This power likewise cannot be used in the present case. The judgment in Metropol Treuhand and Stadler leads inevitably to this conclusion. The Court places two conditions on use of this power. Firstly, a Member State may make use thereof only following consultation as provided for in Article 29 with the committee referred to therein. No such consultation was held in this case. Secondly, the rules relating to the deduction of VAT must contain an indication as to their temporal limitation. There is no evidence of this in the present case.

V II — Conclusion

Conclusion

53In the light of the foregoing I propose that the Court should answer the question referred by the Verwaltungsgerichtshof for a preliminary ruling as follows:

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 precludes national legislation which contains an exclusion from the right to deduct value added tax for its own nationals in respect of a transaction which is carried out in another Member State and is regarded as a taxable transaction in that other Member State in accordance with the directive.

Notes

(1) Original language: Dutch.

(2) OJ 1977 L 145, p. 1.

(3) Case C-409/99 [2002] ECR I-81.

(4) Added by Tenth Council Directive 84/386/EEC of 31 July

(198) 4 on the harmonisation of the laws of the Member States relating to turnover taxes, amending Directive

(77) /388/EEC — Application of value added tax to the hiring out of movable tangible property (OJ 1984 L 208, p. 58)

(5) Eighth Council Directive 79/1072/EEC of 6 December 1979 on the harmonisation of the laws of the Member States relating to turnover taxes — Arrangements for the refund of value added tax to taxable persons not established in the territory of the country (OJ 1979 L 331, p. 11).

(6) In the version published in BGBl. No 636/1975.

(7) In the version published in BGBl. No 410/1988.

(8) BGBl. No 21/1995. To be more precise, what is meant here are the opening words of Paragraph 1(1), the opening words of Paragraph 1(1)(2) and Paragraph 1(1)(2)(d).

(9) Cases C-345/99 [2001] ECR I-4493 and C-40/00 [2001] ECR I-4539.

(10) See inter alia Case 268/83 Rompelman [1985] ECR 655, paragraph 19; Case 50/87 Commission v France [1988] ECR 4797, paragraph 15; and Case C-37/95 Ghent Coal Terminal [1998] ECR 1, paragraph 15.

(11) In this respect see inter alia my Opinion on Cases C-345/99 and C-40/00 Commission v France, cited above in footnote

(9) , paragraph 35 et seq.

(12) Case C-190/95 [1997] ECR I-4383, paragraph 11.

(13) Paragraph 12 et seq.

(14) That is to say the Tenth Directive cited above in footnote

(4) .

(15) Case C-136/99 [2000] ECR I-6109, paragraph 23 et seq.

(16) In this connection see, in particular Articles 2 and 5 of the Eighth VAT Directive.

(17) Case C-451/99 [2002] ECR I-3193.

(18) In particular paragraphs 30 and 32 of that judgment.

(19) See, most recently, my Opinion in Metropol Treuhand and Stadler cited above in footnote 3, paragraph 32.

(20) See the judgment in Metropol Treuhand and Stadler cited above in footnote 3, paragraph 44 et seq.

(21) Case C-40/00 Commission v Trance, cited above in footnote 9, paragraph 17 et seq.

(22) In Metropol Treuhand and Stadler, cited above in footnote

(3) , the Court also states that they cannot fotm part of a package of structural adjustment measures whose aim is to reduce the budget deficit and allow State debt to be repaid. In the present case this is immaterial, at least in the proceedings before the Court.