C-291/07 Kollektivavtalsstiftelsen TRR Trygghetsrådet

JUDGMENT OF THE COURT (First Chamber)

* 6 November 2008

In Case C‑291/07,

REFERENCE for a preliminary ruling under Article 234 EC from the Regeringsrätten (Sweden), by decision of 30 May 2007, received by the Court on 15 June 2007, in the proceedings

Kollektivavtalsstiftelsen TRR Trygghetsrådet

v

Skatteverket,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, M. Ilešič, A. Tizzano, A. Borg Barthet (Rapporteur) and E. Levits, Judges,

Advocate General: J. Mazák, Registrar: R. Grass,

* Language of the case: Swedish.

I ‑ 8268 having regard to the written procedure,

after considering the observations submitted on behalf of:

— the Skatteverket, by M. Loeb, acting as Agent,

— the German Government, by M. Lumma and C. Blaschke, Agents,

— the Greek Government, by S. Spyropoulos and I. Bakopoulos, and by I. Pouli, Agents,

— the Italian Government, by I. M. Braguglia, Agent, and by G. de Bellis, avvocato dello Stato,

— the Polish Government, by T. Nowakowski, Agent,

— the Commission of the European Communities, by D. Triantafyllou and P. Dejmek, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 17 June 2008,

gives the following

Judgment

Legal context and the dispute

1This reference for a preliminary ruling concerns the interpretation of Article 9(2) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the

I ‑ 8269 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), as amended by Council Directive 1999/59/EC of 17 June 1999 (OJ 1999 L 162, p. 63; ‘the Sixth Directive’), and of Article 56(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).

2The reference has been made in proceedings between Kollektivavtalsstiftelsen TRR Trygghetsrådet (Restart — Council for redundancy support and advice; ‘TRR’), a Swedish foundation which carries out both economic and other activities, and the Skatteverket (Swedish local tax board), concerning the tax consequences of the supply of certain consultancy services which TRR wishes to obtain and whether TRR must be regarded as a trader within the meaning of Chapter 5, Paragraph 7, of Law 1994:200 on value added tax (mervärdesskattelagen (1994:200); ‘the ML’). The dispute relates to a period during which the Sixth Directive and Directive 2006/112 were successively applicable.

Legal context

Community legislation

3Under point (1) of Article 2 of the Sixth Directive (essentially reproduced in Article 2(1)(a) of Directive 2006/112), ‘the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such’ is to be subject to value added tax (‘VAT’).

I ‑ 8270

4Under Article 4(1) of the Sixth Directive (essentially reproduced in the first subpara‑ graph of Article 9(1) of Directive 2006/112), ‘taxable person’ means ‘any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity’.

5Article 4(2) of the Sixth Directive (essentially reproduced in the second subpara‑ graph of Article 9(1) of Directive 2006/112) provides that ‘[t]he economic activ‑ ities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity’.

6Under Article 9(1) of the Sixth Directive (essentially reproduced in Article 43 of Directive 2006/112), ‘[t]he 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’.

7However, Article 9(2)(e) of the Sixth Directive (essentially reproduced in Article 56(1)(c) of Directive 2006/112) provides that ‘the place where the following services are supplied when performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment to which the service is supplied or, in the absence of such a place, the place where he has his permanent address or usually resides:

…

I ‑ 8271 — services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the supplying of information,

…’

8Under point (1)(b) of Article 21 of the Sixth Directive, VAT is payable by ‘taxable persons to whom services covered by Article 9(2)(e) are supplied or persons who are identified for [VAT] purposes within the territory of the country to whom services covered by Article 28b(C), (D), (E) and (F) are supplied, if the services are carried out by a taxable person established abroad; however, Member States may require that the supplier of services shall be held jointly and severally liable for payment of the tax’.

9Article 196 of Directive 2006/112 provides that ‘VAT shall be payable by any taxable person to whom the services referred to in Article 56 are supplied …’.

National legislation

10Chapter 1, Paragraph 1, of the ML provides that VAT is payable on supplies of goods and services made within the territory of the country which are carried out as part of a business activity. That provision is intended to implement point (1) of Article 2 of the Sixth Directive.

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11Chapter 5, Paragraph 7, of the ML provides that where certain services listed therein — including consultancy services — are supplied from another Member State, they are to be regarded as supplied within the territory of the country if the customer is a trader who has his place of business in Sweden or a fixed establishment there for which the services were supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides. Under Chapter 1, Paragraph 2, of the ML, if the supplier of the consultancy services on which VAT is payable is a foreign company, the VAT is to be payable by the customer. Those provisions implement the corresponding provisions laid down in Article 9(2)(e) and point (1)(b) of Article 21 of the Sixth VAT Directive.

12The ML does not define ‘trader’. However, Chapter 4, Paragraph 1, of the ML states that any activity which constitutes economic activity within the meaning of Chapter 13 of Law 1999:1229 on income tax (inkomstskattelagen (1999:1229)), or any activity which is carried out in a similar form and which, in the course of a single tax year, generates income in excess of SEK 30 000, is to be regarded as a ‘business activity’. It is clear from Chapter 13, Paragraph 1, of Law 1999:1229 on income tax that ‘economic activity’ means any activity carried out, independently, on a commercial basis.

The dispute in the main proceedings and the question referred for a preliminary ruling

13The dispute in the main proceedings concerns TRR, a foundation for collective agree‑ ments which was set up in 1994 by the Svenska Arbetsgivareföreningen (now Svenskt Näringsliv), the Swedish employers’ confederation, and the Privattjänstemannakar‑ tellen (federation of salaried employees in the private business sector), a trade union.

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14According to its statutes, the objects of TRR are, on the one hand, the provision of severance pay and the promotion of any measures likely to facilitate the occupational redeployment of employees who, for certain reasons, have lost their jobs or who run that risk and, on the other, the provision of advice and assistance to companies which are in a situation of over‑manning, or likely to find themselves in such a situ‑ ation, and the promotion of human resources management training for companies. The rules governing the conduct of TRR’s activities are set out in more detail in an agreement between Svenskt Näringsliv and Privattjänstemannakartellen, called ‘the omställningsavtalet’ (‘the redeployment agreement’).

15TRR’s activities are financed through contributions paid by the employers who are party to the omställningsavtalet, which correspond to a percentage of the remuner‑ ation paid to the employees covered by the omställningsavtalet. Employers who are bound by the omställningsavtalet under a ‘side agreement’ pay a fixed yearly contri‑ bution. In addition to the activities carried out under the omställningsavtalet, TRR supplies services to businesses wishing to operate through outsourcing, for which it is registered as a taxable person for VAT purposes and which account for approxi‑ mately 5% of its income.

16TRR intends to purchase consultancy services supplied, inter alia, by a service provider established in Denmark, which are to be used exclusively in the context of TRR’s activities under the omställningsavtalet. In order to obtain clarification of the tax consequences of that transaction, TRR sought a preliminary decision from the Skatterättsnämnden (Revenue Law Commission) in order to resolve the question whether its activities under the omställningsavtalet are of a commercial nature and whether it is to be regarded as a trader for the purposes of Chapter 5, Paragraph 7, of the ML.

17By decision of 3 March 2006, the Skatterättsnämnden ruled that TRR’s activities under the omställningsavtalet do not constitute a supply of services in the course

I ‑ 8274 of a business activity, but that TRR is to be regarded as a trader for the purposes of Chapter 5, Paragraph 7, of the ML.

18TRR has appealed against the decision of the Skatterättsnämnden, claiming that the Regeringsrätten should declare that TRR is not a trader for the purposes of Chapter 5, Paragraph 7, of the ML. The Skatteverket contends that the Regeringsrätten should confirm the contested decision.

19In support of its action, TRR submits, inter alia, that registration as a taxable person for VAT purposes does not of itself mean that the registered party is always to be regarded as a trader for the purposes of Chapter 5, Paragraph 7, of the ML. When making purchases for activities which fall outside the scope of the Sixth Directive, it is not a trader for the purposes of that provision. TRR adds that the corresponding provision in the Sixth Directive — Article 9(2)(e) — does not refer to a trader but to a taxable person.

20The Regeringsrätten considers it necessary, for the purposes of applying certain provisions of the Sixth Directive and of Directive 2006/112 in the dispute before it, for the terms ‘taxable person’ and ‘person liable for payment of the tax’ to be inter‑ preted in the light of Community law. The Regeringsrätten notes that the Court has interpreted the term ‘taxable person’, as used in the Sixth Directive, in many judg‑ ments, but that it has not yet given a ruling as to how that term is to be understood for the purposes of applying Article 9(2)(e) of the Sixth Directive in a specific situ‑ ation, such as the circumstances of the case before the referring court.

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21On the view that the relevant provisions of the Sixth Directive and of Direct‑ ive 2006/112 are unclear and that the issue does not yet appear to have been referred to the Court, the Regeringsrätten has decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Are Article 9(2)(e) and [point (1)(b) of Article 21] of the Sixth … Directive and Articles 56(1)(c) and 196 of [Directive 2006/112] to be interpreted as meaning that a person who acquires consultancy services from a person liable to tax in another [Member State], [in cases where the former] carries out both an economic activity and also an activity which falls outside the scope of the directives, is to be regarded as a taxable person … where those articles are applied, even though the acquisition was made solely in respect of the latter activity?’

The question referred

22By its question, the referring court is essentially asking whether Article 9(2)(e) of the Sixth Directive and Article 56(1)(c) of Directive 2006/112 are to be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

23It should be borne in mind that the wording of Article 9(2)(e) of the Sixth Directive is, essentially, identical to that of Article 56(1)(c) of Directive 2006/112. It follows that those two provisions must be interpreted in the same way.

I ‑ 8276

24It should also be borne in mind that Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for VAT purposes. Whereas Article 9(1) lays down a general rule in that regard, Article 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied. The object of those provisions is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non‑taxation (see Case 168/84 Berkholz [1985] ECR 2251, paragraph 14; Case C‑327/94 Dudda [1996] ECR I‑4595, paragraph 20; Case C‑167/95 Linthorst, Pouwels en Scheres [1997] ECR I‑1195, paragraph 10; Case C‑452/03 RAL (Channel Islands) and Others [2005] ECR I‑3947, paragraph 23; and Case C‑114/05 Gillan Beach [2006] ECR I‑2427, paragraph 14).

25It is appropriate also to note that, as regards the relationship between paragraphs 1 and 2 of Article 9 of the Sixth Directive, the Court has held that Article 9(1) in no way takes precedence over Article 9(2). In every situation, the question which arises is whether that situation is covered by one of the instances mentioned in Article 9(2) of that directive. If not, it falls within the scope of Article 9(1) (Dudda, paragraph 21; Linthorst, Pouwels en Scheres, paragraph 11; RAL (Channel Islands) and Others, paragraph 24; and Gillan Beach, paragraph 15).

26Article 9(2)(e) of the Sixth Directive provides that the place where services of consult‑ ants and other similar services are supplied for taxable persons who are established in the Community, but not in the same country as the supplier, is the place where the customer has established his business.

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27Although it is true that in the case before the referring court, the customer for the consultancy services is established within the Community but outside the country of the service supplier, the referring court asks nevertheless whether that customer must also be regarded as a taxable person for the purposes of Article 9 of the Sixth Directive where the services concerned are used only for activities which fall outside the scope of the Sixth Directive and that of Directive 2006/112.

28It should be noted at the outset that Article 9(2)(e) of the Sixth Directive does not specify whether it applies only if the taxable person receiving the supply of services uses those services for the purposes of his economic activity. Thus, unlike other provisions of the Sixth Directive, such as Articles 2(1) and 17(2), Article 9(2)(e) does not indicate that such a condition must be satisfied in order for it to apply.

29In other words, in the absence of any express provision in Article 9(2)(e) of the Sixth Directive that the services supplied must be used for the purposes of the customer’s economic activity, it must be concluded that the fact that the customer uses those services for activities which fall outside the scope of the Sixth Directive does not preclude the application of that provision.

30Such an interpretation is consistent with the objective pursued by Article 9 of the Sixth Directive, which — as was pointed out in paragraph 24 of the present judg‑ ment — is to lay down a conflict of laws rule to avoid the risk of double taxation or non‑taxation.

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31In the same way, as the Advocate General observed in point 41 of his Opinion, that interpretation facilitates the implementation of that conflict of laws rule, in that it serves the interests of simplicity of administration — of the rules on the place of supply of services — as regards the rules governing the collection of taxes and the prevention of tax avoidance. The supplier of services need merely establish that the customer is a taxable person in order to ascertain whether the place of supply of ser ‑ vices is in the Member State in which he, the supplier, is established or in the Member State in which the customer’s activities are based.

32Furthermore, that interpretation is in line with the objectives and operating rules of the Community VAT system since it ensures, in a situation such as that at issue in the main proceedings, that the ultimate consumer of the supply of services bears the final cost of the VAT payable.

33As the Advocate General observed in points 43 and 44 of his Opinion, such an interpretation is also consistent with the principle of legal certainty; furthermore, it enables the burden on traders operating across the internal market to be reduced and facilitates the free movement of services.

34Finally, it should be noted that point (1)(b) of Article 21 of the Sixth Directive (essen‑ tially reproduced in Article 196 of Directive 2006/112) provides that VAT is payable by persons to whom services covered by Article 9(2)(e) of the Sixth Directive (essen‑ tially reproduced in Article 56(1)(c) of Directive 2006/112) are supplied. Accordingly, if the conditions for the application of Article 9(2)(e) of the Sixth Directive are met, the purchaser is liable for VAT on the supply of services which he receives, whether or not they have been supplied for the purposes of activities which fall outside the scope of those directives.

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35In the light of the foregoing considerations, the answer to the question referred by the Regeringsrätten must be that Article 9(2)(e) of the Sixth Directive and Article 56(1)(c) of Directive 2006/112 must be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

Costs

36Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (First Chamber) hereby rules:

Article 9(2)(e) 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, as amended by Council Directive 1999/59/EC of 17 June 1999, and Article 56(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that where the customer for consultancy services supplied by a taxable person established in another Member State carries out both an economic activity and an activity which falls outside the scope of those directives, that customer is to be regarded as a taxable person even where the supply is used solely for the purposes of the latter activity.

[Signatures]

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Opinion of the Advocate-General

1By the present reference for a preliminary ruling, the Regeringsrätten (Supreme Administrative Court) (Sweden), asks the Court of Justice to interpret Articles 9(2)(e) and 21(1)(b) of the Sixth VAT Directive (2) as well as Articles 56(1)(c) and 196 of Directive 2006/112 (3) (collectively ‘the relevant provisions’). The case in the main proceedings relates in part to accounting periods to which the provisions of the Sixth Directive are applicable and in part to accounting periods to which the provisions of Directive 2006/112 apply.

2The case concerns a Swedish foundation which carries out both economic and other activities and which intends to purchase consultancy services from Denmark. The referring court wishes to know whether, for the purposes of applying the relevant provisions, the foundation is a taxable person even though the purchase is to be made in respect only of the part of its activities which falls outside the scope of the Directives.

I – Legal framework

A – Community law

3Under Article 2(1) of the Sixth Directive, the following is to be subject to VAT: ‘the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such’.

4Article 4(1) of the Sixth Directive provides that a taxable person means ‘any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity’. Article 4(2) reads as follows: ‘economic activities ... shall comprise all activities of producers, traders and persons supplying services ...’.

5Pursuant to Article 9 of the Sixth Directive which concerns the place of supply of services:

‘1. The place where a service is supplied shall be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is supplied or, in the absence of such a place of business or fixed establishment, the place where he has his permanent address or usually resides.

2. However:

…

(e) the place where the following services are supplied when performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment to which the service is supplied or, in the absence of such a place, the place where he has his permanent address or usually resides:

…

– services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the supplying of information,

…’

6Article 21(1)(b) of the Sixth Directive provides that the following are to be liable to pay VAT:

‘persons to whom services covered by Article 9(2)(e) are supplied and carried out by a taxable person resident abroad. However, Member States may require that the supplier of services shall be held jointly and severally liable for payment of the tax.’

7Under Article 2(1)(c) of Directive 2006/112, the following type of transaction is to be subject to VAT: ‘the supply of services for consideration within the territory of a Member State by a taxable person acting as such.’

8Article 9(1) of Directive 2006/112 provides:

‘“Taxable person” shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.

Any activity of producers, traders or persons supplying services, including … activities of the professions, shall be regarded as “economic activity” …’

9Under Article 56(1) of Directive 2006/112:

‘The place of supply of the following services to customers established outside the Community, or to taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment for which the service is supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides:

…

(c) the services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services, as well as data processing and the provision of information;

…’

10Finally, Article 196 of Directive 2006/112 provides:

‘VAT shall be payable by any taxable person to whom the services referred to in Article 56 are supplied …’

B – National law

11Pursuant to Paragraph 1 of Chapter 1 of the mervärdesskattelagen (1994:200) (Law on VAT; ‘ML’), VAT is to be paid on turnover made within the country on goods and services which are subject to taxation and supplied as part of a professional activity. (4)

12Pursuant to Paragraph 7 of Chapter 5 of the ML, certain specified services, including consultancy services, supplied from another Member State are regarded as supplied within the country if the purchaser is a trader who has his place of business in Sweden or a fixed establishment for which the service is supplied, or, if the trader does not have such a place of business or fixed establishment in Sweden, the place where he has his permanent address or usually resides. If the supplier of the taxable consultancy services within the country is a foreign company, it is the purchaser, pursuant to Paragraph 2 of Chapter 1 of the ML, who is liable to pay the VAT. (5)

13There is no definition in the ML of the term ‘trader’. Under Paragraph 1 of Chapter 4 of the ML, ‘professional activity’ is defined as an activity which constitutes economic activity pertaining to business and remuneration for transactions undertaken as part of that activity which, in one tax year, exceed SEK 30 000. It is clear from Paragraph 1 of Chapter 13 of the inkomstskattelagen (Law on income tax) that economic activity refers to gainful activity carried out independently in the course of a profession.

II – Facts and procedure and the question referred for a preliminary ruling

14The case in the main proceedings concerns a foundation formed on the basis of collective agreements, the Kollektivavtalsstiftelsen TRR Trygghetsrådet (Restart – the Council for Redundancy Support and Advice) (‘TRR’), which was formed in 1994 from the Svenska Arbetsgivareföreningen (Confederation of Swedish Enterprise; now Svenskt Näringsliv) and the Privattjänstemannakartellen (Federation of Salaried Employees in Industry and Services).

15According to its statutes, TRR’s aims are, on the one hand, to pay compensation for unemployment and to promote measures to facilitate the transfer to new employment of employees who, for specific reasons, have been made unemployed or who run that risk and, on the other hand, to give advice and assistance to companies in or likely to be in a situation of over-manning and to promote company development in the field of human resources. The conditions for TRR’s activity are regulated in more detail by an existing contract between Svenskt Näringsliv and Privattjänstemannakartellen, the Omställningsavtal (agreement on transition of employment).

16The activities are financed through the payment, by employers who are bound by the contract, of a fee corresponding to a proportion of the pay of the employees covered by the contract. Employers who are bound by the contract under a ‘side contract’ pay a fixed yearly fee. In addition to the activity carried out under the Omställningsavtal, TRR is registered for VAT in respect of the supply of services in connection with company outsourcing. The activities which are subject to tax are stated to amount to 5% of TRR’s total activity.

17TRR intends to purchase consultancy services from, inter alia, Denmark, which will be used exclusively in the context of the activity carried out by the foundation on the basis of the Omställningsavtal. In order to clarify the tax consequences of that purchase, TRR sought a preliminary decision from the Skatterättsnämnden on whether its activity on the basis of the Omställningsavtal is professional in nature and whether it is a trader for the purposes of Paragraph 7 of Chapter 5 of the ML.

18The Skatterättsnämnden answered the questions by preliminary decision of 3 March 2006, stating: (i) TRR is not to be regarded as providing services as part of a professional activity in respect of the activities under the Omställningsavtal and TRR is to be regarded as a trader for the purposes of Paragraph 7 of Chapter 5 of the ML.

19The TRR has appealed against the preliminary decision, claiming that the Regeringsrätten should amend the preliminary decision and declare that TRR is not a trader for the purposes of Paragraph 7 of Chapter 5 of the ML. The Skatteverket (Local Tax Board) contends that the Regeringsrätten should confirm the preliminary decision.

20In support of its action, TRR has submitted, inter alia, that registration for VAT does not of itself mean that the registered party is always to be regarded as a trader for the purposes of Paragraph 7 of Chapter 5 of the ML. When making purchases for activities which fall outside the scope of the Sixth Directive, TRR is not a trader as referred to in that provision. The corresponding provision in the Sixth Directive, Article 9(2)(e), does not refer to a trader but to a taxable person.

21The Regeringsrätten considers that the case before it requires an interpretation of the Community law terms ‘taxable person’ and ‘person liable for tax’ where certain provisions of the Sixth Directive and of Directive 2006/112 are to be applied. The referring court notes that the meaning of the term ‘taxable person’ in the Sixth Directive has been interpreted by the Court in many judgments. However, there is no case-law on how the term is to be understood for the purposes of applying Article 9(2)(e) of that directive in a situation such as that under consideration in the present case.

22On the view that the relevant provisions of the Sixth Directive and of Directive 2006/112 are unclear and since it appears that the issue has not yet been addressed by the Court, the Regeringsrätten has decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Are Articles 9(2)(e) and 21(1)(b) of the Sixth Directive and Articles 56(1)(c) and 196 of [Directive 2006/112] to be interpreted as meaning that a person who purchases consultancy services from a person liable to tax in another [Member State], [where the former] carries out both an economic activity and also an activity which falls outside the scope of the Directives, is to be regarded as a taxable person … where those articles are applied, even though the purchase was made solely in respect of the latter activity?’

23Written observations have been submitted by the Skatteverket, by the German, Greek, Italian and Polish Governments and by the Commission. No hearing has been requested by the parties, and none has been held.

III – Assessment

A – Main arguments of the parties

24TRR has not submitted written observations to the Court.

25In the Skatteverket’s view, Article 9(2)(e) of the Sixth Directive and Article 56(1) of Directive 2006/112 do not require the customer to be acting as a taxable person when he makes a purchase or to be making the purchase as part of economic activities. Furthermore, it is in keeping with the objective of both directives that, for the purposes of the relevant provisions, it is immaterial whether or not the customer is acting as a taxable person.

26The Skatteverket contends that, for the application of the relevant provisions, a taxable person must be treated as such, independently of the aim of the purchase of services. Thus, in the case of the services purchased by TRR in circumstances such as those of the main proceedings, the supply must be considered to be carried out in Sweden. TRR is therefore required to declare and pay the VAT to the Swedish exchequer. However, the supply of services unrelated to TRR’s economic activity does not give rise to a right of deduction in respect of the VAT.

27The German, Polish and Greek Governments as well as the Commission, have put forward arguments to the same effect as those of the Skatteverket. In principle, they contend that the relevant provisions are to be interpreted as meaning that a customer making a purchase of consultancy services from a person liable to tax in another Member State where the former carries out both an economic activity and an activity which falls outside the scope of the Directives must be regarded as a taxable person, even where that purchase is made solely in respect of the latter activity.

28However, the Italian Government submits in essence that the relevant provisions must be interpreted as meaning that a customer making a purchase of consultancy services from a taxable person established in another Member State where the former carries out both an economic activity and an activity which falls outside the scope of the Directives must be considered as a final consumer of that supply of services where that purchase is made solely in respect of activities falling outside the scope of the Directives.

B – Appraisal

29By its question, the referring court asks whether the relevant provisions are to be interpreted as meaning that a person who purcha ses consultancy services from a person liable to tax in another Member State where the former carries out both an economic activity and also an activity which falls outside the scope of the Directives is to be regarded as a taxable person, even where the purchase is made solely in respect of the latter activity.

30Given the almost identical wording of the relevant provisions of the two Directives and in the interests of clarity, reference will be made here to the Sixth Directive alone. (6)

31Under Article 4(1) of the Sixth Directive, ‘taxable person’ means any person who independently carries out one of the economic activities referred to in Article 4(2). ‘Economic activity’ is defined in Article 4(2) as comprising all activities of producers, traders and persons supplying services.

32It is settled case-law that Article 4 of the Sixth Directive gives VAT a very wide scope, covering all stages of production, distribution and the provision of services. (7) In addition, it is also well established that, in view of the purpose of the Sixth Directive ‑ which seeks in particular to found a common system of VAT upon a uniform definition of ‘taxable persons’ ‑ that status must be assessed solely on the basis of the criteria set forth in Article 4 of that Directive. (8)

33Thus the Court has held that a person who carries out an economic activity for the purposes of Article 4 of the Sixth Directive is a taxable person, even if that economic activity is an ancillary one. (9) A person may be considered a taxable person under Article 4 of the Sixth Directive even where, as in the case of TRR, a predominant part of his activity does not fall within the scope of that directive.

34The Court noted in Gillan Beach that ‘Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for tax purposes. Whereas Article 9(1) lays down a general rule on the matter, Article 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied. The object of those provisions is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non-taxation.’ (10)

35The Court went on to state, in the same judgment, that ‘[i]t is appropriate also to note that, in respect of the relationship between Article 9(1) and (2) of the Sixth Directive, the Court has held that Article 9(1) in no way takes precedence over Article 9(2). In every situation, the question which arises is whether that situation is covered by one of the instances mentioned in Article 9(2) of that directive. If not, it falls within the scope of Article 9(1).’ (11)

36It follows that Article 9(2) of the Sixth Directive, not being an exception to the rule in Article 9(1), is not to be interpreted narrowly.

37Additionally in Gillan Beach , the Court held that ‘[i]n interpreting a provision of Community law, it is necessary to consider not only the wording of that provision but also the context in which it occurs and the objects of the rules of which it is part’. (12) Thus, according to the Court, it must be borne in mind that Article 9(2) of the Sixth Directive is a rule of conflict which determines the place of taxation of services and, consequently, delimits the powers of the Member States. I note here that it follows that ‘services of consultants’ is a Community concept which must be interpreted uniformly in order to avoid instances of double taxation or non-taxation. (13)

38It should be noted that Article 9(2)(e) of the Sixth Directive does not specify whether or not a taxable person purchasing services must make that purchase in respect of his economic activity: (14) for that matter, there is nothing in that provision to suggest that such a fact should assume any importance for the purposes of its application.

39However, as the referring court rightly points out, Article 2(1) of the Sixth Directive explicitly states that VAT is payable on the supply of goods or services effected for consideration within the territory of the country by a taxable person ‘acting as such’. Furthermore, Article 17(2) of the Sixth Directive clearly provides that the taxable person’s right of deduction of input tax is recognised in so far as the goods and services are used for the purposes of his taxable transactions. (15)

40Nevertheless, while Articles 2(1) and 17(2) of the Sixth Directive specifically refer to the taxable person ‘acting as such’ or to services being used for the purposes of taxable transactions, Article 9(2)(e) of that directive makes no such specific reference. In my view this is by no means a (legislative) oversight on the part of the Community legislature. Rather, the absence in Article 9(2) of any reference to economic activity, to a taxable person acting as such or to taxable transactions means that, for the purposes of determining the place of supply of services, the fact that the customer additionally undertakes activities which fall outside the scope of the Sixth Directive is not a bar to the application of that provision. (16)

41Furthermore, the above interpretation of the relevant provisions is in line with the interests of simplicity of administration (of the rules on the place of supply of services) and ease of collection, as well as the prevention of tax avoidance. (17) Indeed, as the Skatteverket correctly points out, if the customer of services supplied were required to be a taxable person acting as such or if the services had to be used for the purposes of his taxable transactions, the determination of the place of supply of services would in many cases be much more difficult, both for companies and for the fiscal authorities of the Member States. (18)

42Moreover, with regard to the practicality (19) of such a construction of the relevant provisions, in the case of a person purchasing consultancy services the tax is charged at the stage of that person’s VAT return which he submits to the tax administration in the Member State where he is established. Being a taxable person, he is bound to be registered in that Member State already for the purposes of VAT returns. Moreover, if those services are used in respect of his economic activity, the purchaser may avail himself of his right of deduction of input tax. The supplier of the services, on the other hand, need only demonstrate that the person purchasing them is a taxable person. (20)

43Finally, in my view such a reading of the relevant provisions is dictated also by the principle of legal certainty, as the rules on the place of supply of services must be predictable to traders. This principle applies with particular rigour to rules which have fiscal consequences, so that individuals can identify their obligations under such rules. (21)

44Moreover, that interpretation should be conducive to reducing the burden on traders operating across the internal market. And that, in turn, will help to facilitate the free movement of goods and services, which, as I recall, is one of the general aims of the common system of VAT. (22)

45Before concluding, I would briefly mention that in the light of the above considerations it would appear that, in its construction of the relevant provisions, (23) the Italian Government has not taken due account of the purpose of those provisions.

46Last but not least, turning to Article 21(1)(b) of the Sixth Directive, which also figures in the question referred, suffice it to note that that provision merely states that persons to whom services covered by Article 9(2)(e) of the Sixth Directive are supplied and carried out by a taxable person resident abroad are liable to VAT. Therefore where the conditions laid down in Article 4 of the Sixth Directive as well as other conditions under Article 21(1)(b) are met, such a person is accountable for VAT as regards the services which he has purchased, whether or not these are effected solely in respect of the activity which falls outside the scope of the Directives.

IV – Conclusion

Conclusion

47I am therefore of the opinion that the Court should give the following answer to the question referred by the Regeringsrätten:

With a view to determining the place of supply of services, Articles 9(2)(e) and 21(1)(b) 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 and Articles 56(1)(c) and 196 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax are to be interpreted as meaning that a person who purchases consultancy services from a person liable to tax in another Member State, where the former carries out both an economic activity and an activity which falls outside the scope of those two directives, is to be regarded as a taxable person for the purposes of applying those provisions, even where the purchase is made solely in respect of the latter activity.

(1) .

(2) – 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’).

(3) – Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1) (‘Directive 2006/112’). Jointly, the Sixth Directive and Directive 2006/112 will be referred to as ‘the Directives’. With effect from 1 January 2007, the Sixth Directive was repealed and replaced by Directive 2006/112.

(4) – The provision is intended to implement Article 2(1) of the Sixth Directive.

(5) – The corresponding parts of Articles 9(2)(e) and 21(1)(b) of the Sixth Directive have been implemented by those provisions.

(6) – In essence, Articles 2(1), 4, 9(2)(e) and 21(1)(b) of the Sixth Directive correspond to Articles 2(1), 9, 56(1)(c) and 196 of Directive 2006/112 respectively.

(7) – See, inter alia, Case C‑186/89 Van Tiem [1990] ECR I‑4363, paragraph 17; Case C‑305/01 MKG-Kraftfahrzeuge-Factoring [2003] ECR I‑6729, paragraph 42; and Case C‑25/03 HE [2005] ECR I‑3123, paragraph 40.

(8) – See HE , cited in footnote 7, paragraph 41 and the case-law cited.

(9) – Ibid., paragraph 42.

(10) – See Case C‑114/05 [2006] ECR I‑2427, paragraph 14, citing Case 168/84 Berkholz [1985] ECR 2251, paragraph 14; Case C‑327/94 Dudda [1996] ECR I‑4595, paragraph 20; Case C‑167/95 Linthorst, Pouwels en Scheren [1997] ECR I‑1195, paragraph 10; and Case C‑452/03 RAL (Channel Islands) and Others [2005] ECR I‑3947, paragraph 23.

(11) – See Gillan Beach , cited in footnote 10, paragraph 15 and the case-law cited.

(12) – Ibid., paragraph 21, citing Case C‑17/03 VEMW and Others [2005] ECR I‑4983, paragraph 41.

(13) – With reference to ‘similar activities’, see Gillan Beach , cited in footnote 10, paragraph 20 and the case-law cited. As regards ‘advertising services’, see Case C‑68/92 Commission v France [1993] ECR I‑5881, paragraph 14; Case C‑73/92 Commission v Spain [1993] ECR I‑5997, paragraph 12; and the Opinion of Advocate General Jacobs in Case C‑108/00 SPI [2001] ECR I‑2361, point 14.

(14) – That is to say, activity subject to tax.

(15) – See Case C‑378/02 WZV [2005] ECR I‑4685, paragraph 32 and the case-law cited.

(16) – I would add that, as is clear from the above, the purpose of Article 9(2) of the Sixth Directive is different from the aims of Articles 2(1) and 17(2).

(17) – In view of my interpretation of the relevant provisions, in case of doubt with regard to the risk of tax avoidance, I would note that Articles 21 and 22(7) of the Sixth Directive permit the tax authorities of the Member States to take the necessary measures to counter that risk. See, to that effect, Dudda , cited in footnote 10, paragraph 32.

(18) – I also agree that if, contrary to my interpretation above, the relevant provisions were to be considered as requiring such obligations the interests of simplicity of administration of the rules and ease of collection would be undermined in situations where the purchase of services is made for both categories of activities carried out by TRR. The relevant provisions do not give any guidance in respect of how one would have to proceed with the requisite apportionment.

(19) – This issue is closely linked with the one in the previous paragraph. If the allocation of tax jurisdiction is too impractical, transactions which are otherwise taxable may escape taxation.

(20) – As the Skatteverket rightly points out, such a regime allows a provider of services, such as consultancy services, to avoid having to register for the purposes of VAT in every Member State where his clients are established.

(21) – See, in this respect, the Opinion of Advocate General Fennelly in Dudda , cited in footnote 10, point 32; referring to Case C‑30/89 Commission v France [1990] ECR I‑691, paragraph 23; and the Opinion of Advocate General Cosmas in Case C‑231/94 Faaborg-Gelting Linien [1996] ECR I‑2395, point 12.

(22) – In the case before the referring court, the relevant facts predate the entry into force of Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112/EC as regards the place of supply of services (OJ 2008 L 44, p. 11). Article 2 of Directive 2008/8 provides that, as of 1 January 2010, Article 43 of Directive 2006/112 is to read as follows: ‘For the purpose of applying the rules concerning the place of supply of services: 1. a taxable person who also carries out activities or transactions that are not considered to be taxable supplies of goods or services in accordance with Article 2(1) shall be regarded as a taxable person in respect of all services rendered to him ’ (emphasis added).

(23) – See point 28 of the present Opinion.