C-312/19 Valstybinė mokesčių inspekcija (Joint activity agreement)

JUDGMENT OF THE COURT (Eighth Chamber)

16 September 2020 ( *1 )

(Reference for a preliminary ruling – Directive 2006/112/EC – Common system of value added tax (VAT) – Article 9(1) – Article 193 – Concept of ‘taxable person’ – Joint activity agreement – Partnership – Allocation of an economic transaction to one of the partners – Determination of the taxable person liable for the tax)

In Case C‑312/19,

REQUEST for a preliminary ruling under Article 267 TFEU from the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania), made by decision of 10 April 2019, received at the Court on 16 April 2019, in the proceedings

XT

v

Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos,

THE COURT (Eighth Chamber),

composed of L.S. Rossi, President of the Chamber, A. Prechal (Rapporteur), President of the Third Chamber, and F. Biltgen, Judge,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

the Lithuanian Government, by K. Dieninis and V. Vasiliauskienė, acting as Agents,

the European Commission, by R. Lyal and J. Jokubauskaitė, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 23 April 2020,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of Article 9(1), Article 193 and Article 287 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2013/43/EU of 22 July 2013 (OJ 2013 L 201, p. 4) (‘Directive 2006/112’).

2The request has been made in proceedings between XT and the Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania) concerning an order issued to XT by the Vilniaus apskrities valstybinė mokesčių inspekcija (Vilnius District State Tax Inspectorate, Lithuania; ‘the Vilnius tax authority’) requiring payment of value added tax (VAT) together with default interest and of a fine following undeclared property transactions.

Legal context

EU law

3Article 9(1) of Directive 2006/112 is worded as follows:

‘“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 mining and agricultural activities and activities of the professions, shall be regarded as “economic activity”. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.’

4Article 14 of Directive 2006/112 states:

‘1. “Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner.

2. In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:

…

the transfer of goods pursuant to a contract under which commission is payable on purchase or sale.

3. Member States may regard the handing over of certain works of construction as a supply of goods.’

5As provided in Article 28 of Directive 2006/112:

‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’

6Article 193 of Directive 2006/112 provides:

‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202.’

7Article 226 of Directive 2006/112 states:

‘Without prejudice to the particular provisions laid down in this Directive, only the following details are required for VAT purposes on invoices issued pursuant to Articles 220 and 221:

…

the full name and address of the taxable person and of the customer;

…’

8Article 287 of Directive 2006/112 is worded as follows:

‘Member States which acceded after 1 January 1978 may exempt taxable persons whose annual turnover is no higher than the equivalent in national currency of the following amounts at the conversion rate on the day of their accession:

…

Lithuania: EUR 29000;

…’

9Article 1 of Council Implementing Decision 2011/335/EU of 30 May 2011 authorising the Republic of Lithuania to apply a measure derogating from Article 287 of Directive 2006/112 (OJ 2011 L 150, p. 6) provides:

‘By way of derogation from Article 287(11) of Directive [2006/112], the Republic of Lithuania is authorised to exempt from VAT taxable persons whose annual turnover is no higher than the equivalent in national currency of EUR 45000 at the conversion rate on the day of its accession to the European Union.’

Lithuanian law

The Law on VAT

10As provided in Article 2 of the Lietuvos Respublikos pridėtinės vertės mokesčio įstatymas (Law of the Republic of Lithuania on VAT) (Žin., 2002, No 35‑1271), in the version in force for the 2010 to 2013 tax years (‘the Law on VAT’):

‘…

2. “Taxable person” shall mean a taxable person of the Republic of Lithuania or of a foreign State.

…

15. “Taxable person of the Republic of Lithuania” shall mean a legal or natural person of the Republic of Lithuania carrying out economic activities of any type, as well as a collective investment undertaking established in the Republic of Lithuania which does not have the status of legal person and acts as an investment fund.

…’

11Article 71 of the Law on VAT is worded as follows:

‘1. The obligation to register for VAT and calculate VAT and pay it into the budget shall be owed by taxable persons supplying goods and services in the territory of the country … A person liable to register for VAT must submit an application for registration for VAT.

2. Notwithstanding paragraph 1 of this article, a taxable person of the Republic of Lithuania shall not be required to submit an application for registration for VAT and to calculate VAT and pay it into the budget … where the total annual amount of consideration within the last 12 months for goods and/or services supplied in the territory of the country while carrying out economic activities has not exceeded 155000 litai [(LTL), approximately EUR 45000)]. VAT shall be begun to be calculated from the month when that limit has been exceeded. No VAT shall be calculated in respect of the goods and services supplied the consideration for which did not exceed the specified amount of [LTL] 155000 …

…

4. Failure to submit an application for registration for VAT shall not exempt a taxable person from the obligation to calculate VAT in respect of the goods and/or services supplied by him or her … and to pay it into the budget …’

12Article 79(1) and (5) of the Law on VAT provides:

‘1. A taxable person … shall document the supply of goods or services that has taken place by means of a VAT invoice …

…

5. In the manner and in cases determined by the Government of the Republic of Lithuania or an institution authorised by it, goods or services supplied jointly by several VAT payers may be documented in one invoice.’

The Civil Code

13Article 6.969(1) of the Lietuvos Respublikos Civilinis kodeksas (Civil Code of the Republic of Lithuania), in the version resulting from Law No VIII‑1864 of 18 July 2000 (‘the Civil Code’), provides:

‘By a joint activity (partnership) agreement two or more persons (partners), co-operating by means of their property, work or knowledge, undertake to act jointly for a certain goal which does not contravene the law or for a certain activity.’

14Article 6.971 of the Civil Code states:

‘1. The property contributed by the partners, which was previously in their ownership, as well as the production during joint activities and the income and fruits from them, shall be in the joint partial ownership of all the partners, unless otherwise established by law or the joint activity agreement.

…

3. One of the partners, designated by joint agreement of all the partners, shall be responsible for the accounting of the joint property.

4. The joint property shall be used, possessed and disposed of by joint agreement of all the partners. In the event of a dispute, those arrangements shall be established by a court at the request of any of the partners. …’

15Article 6.972(1) and (2) of the Civil Code states:

‘1. While managing joint affairs, each of the partners shall be entitled to act on behalf of all the partners, unless the joint activity agreement provides that joint affairs shall be managed by one of the partners or all the partners together. If affairs may be managed only by all the partners together, the conclusion of each transaction shall require the consent of all the partners.

2. In the case of relations with third parties, the right of a partner to conclude the transactions on behalf of all the partners shall be affirmed by a power of attorney issued by the remaining partners, or by the joint activity agreement.’

16Article 6.974 of the Civil Code, headed ‘Joint expenses and joint losses’, is worded as follows:

‘1. The allocation of joint expenses and joint losses related to the joint activity shall be established by the joint activity agreement. If there is no such arrangement, each partner shall be liable for joint expenses and joint losses in proportion to the amount of his or her share.

2. An arrangement which releases one of the partners fully from coverage of joint expenses or joint losses shall be invalid.’

17Article 6.975(3) of the Civil Code provides:

‘If the joint activity agreement is related to commercial activity of the partners, all the partners shall be jointly and severally liable under the joint obligations, irrespective of the basis upon which those obligations arise.’

18Under Article 6.976(1) of the Civil Code, ‘the profit obtained from the joint activity shall be distributed among the partners in proportion to the value of the contribution of each of them to the joint activity, unless otherwise provided in the joint activity agreement’.

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

19On 19 February 2010, XT and another natural person (‘the partner’) concluded a joint activity agreement (‘the agreement at issue’) – as envisaged in Article 6.969(1) of the Civil Code under the designation ‘partnership’ – which was concerned with working together for the purpose of constructing a residential property (‘the partnership at issue’).

20On 25 April 2010, XT and his partner decided to purchase a plot of land in the District of Vilnius (Lithuania). On 27 April 2010, XT alone signed the contract of sale with the plot’s owners. He contributed 30% of the transaction price and the partner 70%, by passing his contribution to XT. It was decided that only XT would be entered in the land register as owner of the plot.

21On 5 May 2010, XT and his partner decided to construct a set of five buildings, to make XT responsible for the administrative formalities necessary for construction and to entrust a property development company in which XT held the position of director with the execution of the construction works. A property development agreement with that company was concluded on 22 May 2010, in which XT was both the client and that company’s representative.

22On 2 November 2010, XT obtained, in his name, a construction permit for the construction of five buildings on the plot of land in question.

23On 2 December 2010, XT and his partner decided to sell the first building with a part of the plot of land and to use the funds obtained for future construction. The contract of sale in respect of the first building was signed on 14 December 2010 by XT and the purchasers, who were natural persons.

24On 10 January 2011, XT and his partner concluded an agreement terminating the partnership at issue and dividing up assets and liabilities. It was agreed thereunder to grant the partner the right to certain produced assets, namely the fourth and fifth buildings. XT also undertook to pay to his partner by 2017 the sum of LTL 300000 (approximately EUR 86886) to compensate for the difference between their respective contributions and the difference between the shares of the joint assets falling to them. The first, second and third buildings were allocated to XT under that agreement.

25On 15 February 2011, the property development company drew up an invoice that indicated a sum payable by way of VAT, for construction of the first four buildings. For the construction of the fifth building, it drew up on 11 February 2013 an invoice that indicated a sum payable by way of VAT.

26By contracts concluded between XT and natural persons, the second and third buildings were sold on 30 May 2011 and 13 November 2012.

27On 1 February 2013, XT and his partner signed a deed for the transfer (division) of assets, in which it was stipulated that, having regard to the agreement concluded on 10 January 2011, XT transferred the fourth and fifth buildings to his partner.

28On 6 February 2013, XT and his partner decided, pursuant to the agreement at issue, that XT would sell the fifth building, for which he was entered in the land register as owner, and transfer the sum obtained to his partner. That sale took place on 13 February 2013.

29Since XT and his partner did not consider that the sales of the buildings to third parties (‘the supplies at issue’) constituted an economic activity subject to VAT, the invoices payable by the purchasers did not have VAT added to them. Nor did XT and his partner declare or pay VAT or deduct the input tax paid.

30After carrying out a tax inspection in respect of XT regarding income tax and VAT for 2010 to 2013, the Vilnius tax authority found that the activity in the context of which the supplies at issue were made and the supplies at issue themselves had to be regarded as constituting together a single economic activity for the purposes of VAT. Since the Vilnius tax authority considered XT to be a ‘taxable person’, liable for performance of the VAT obligations, it ordered him to pay the VAT on those transactions, together with default interest, and to a pay a tax fine, while accepting, however, a deduction of the input tax paid by him, in accordance with the invoices drawn up by the property development company.

31That decision was then upheld by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania, by the Mokestinių ginčų komisija prie Lietuvos Respublikos Vyriausybės (Tax Disputes Commission under the Government of the Republic of Lithuania) and by the Vilniaus apygardos administracinis teismas (Regional Administrative Court, Vilnius, Lithuania). XT has asked the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania) to set aside that court’s judgment.

32In examining that action, the referring court has doubts as to whether the party liable for VAT should be determined as being XT or as being the partnership at issue, that is to say, both partners of the entity set up by the agreement at issue, in the light of the fact that Lithuanian law does not accord legal personality to a partnership.

33Those doubts are brought about by the referring court’s findings that, on the one hand, (i) that partnership was not called into question by the Vilnius tax authority, (ii) the agreement at issue states that XT acts in the name of both partners in relations with third parties and (iii) the various decisions taken by XT and his partner in implementation of that agreement form the basis of the acts carried out by XT, so that there is reason to think that, in the light of the facts set out, XT did not independently carry out an economic activity. The partnership at issue, by contrast, fulfils the criteria set out in Article 9(1) of Directive 2006/112.

34The referring court finds, on the other hand, that, in relations with third parties, including as regards the supplies at issue, it was only XT who participated, as his partner essentially did no more than provide part of the finance for the purchase of the plot of land, and that the purchasers involved in those supplies were unaware of the partner’s existence.

35Should the Court hold that the partnership at issue is to be regarded as liable for VAT, the referring court seeks, by its second question, to ascertain how the tax obligations are allocated. The referring court is uncertain, in that respect, whether each partner is to be regarded as obliged individually to pay VAT in proportion to his share of the consideration received for the properties supplied in the course of the economic activities, and what the basis should be when calculating the VAT exemption provided for in Article 287 of Directive 2006/112.

36In those circumstances, the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

Are Article 9(1) and Article 193 of [Directive 2006/112] to be interpreted as meaning that, in circumstances such as those in the case under consideration, a natural person such as the applicant cannot be regarded as having “independently” carried out the (economic) activity in question and as having to pay by him or herself the [VAT] on the contested supplies, that is to say, for the purposes of Article 9(1) and Article 193 of Directive [2006/112], is the taxable person liable for the obligations at issue to be taken to be the joint activity/partnership (the participants in the joint activity collectively; in the instance under consideration, the applicant and his business partner collectively) – which under national law is not regarded as a taxable person and does not enjoy legal personality – and not solely a natural person such as the applicant?

If the first question is answered in the affirmative, is Article 193 of Directive [2006/112] to be interpreted as meaning that, in circumstances such as those in the case under consideration, VAT is paid individually by each of the participants (in the instance under consideration, the applicant and his business partner) in the joint activity/partnership – which joint activity/partnership is, under national law, not regarded as constituting a taxable person and does not enjoy legal personality – on the part of each payment by way of consideration that is received by them (or is receivable by or owed to them) for the taxable supplies of immovable property? Is Article 287 of Directive [2006/112] to be interpreted as meaning that, in circumstances such as those in this case, the annual turnover referred to in that provision is established by taking into account the entire revenue of the joint activity (received collectively by the participants in the joint activity)?’

Consideration of the questions referred

The first question

37By its first question, the referring court asks, in essence, whether Article 9(1) and Article 193 of Directive 2006/112 must be interpreted as meaning that a natural person who has concluded with another natural person a joint activity agreement setting up a partnership, which lacks legal personality and is characterised by the fact that the first person is empowered to act in the name of the partners as a whole, but participates alone and in his or her own name in relations with third parties when performing acts that form the economic activity pursued by that partnership, carries out that activity independently and must accordingly be regarded as a ‘taxable person’ within the meaning of Article 9(1) of Directive 2006/112 and as having sole liability for the VAT payable under Article 193 of that directive.

38Article 9(1) of Directive 2006/112 provides that ‘“taxable person” shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity’. In accordance with Article 193 of that directive, VAT is payable by any taxable person carrying out a supply of goods, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202 of the directive. It is clear from the order for reference that the exceptions referred to in the latter provisions are not applicable in the main proceedings.

39According to settled case-law of the Court, the terms used in Article 9 of Directive 2006/112, in particular the term ‘any person who’, give to the notion of ‘taxable person’ a broad definition focused on independence in the pursuit of an economic activity, to the effect that all persons – natural or legal, both public and private, and entities devoid of legal personality – who, in an objective manner, satisfy the criteria set out in that provision must be regarded as being taxable persons for the purposes of VAT (judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 27 and the case-law cited).

40In order to determine who, in circumstances such as those at issue in the main proceedings, must be regarded in respect of the supplies at issue as a ‘taxable person’ for the purposes of VAT, it must be established who has independently carried out the economic activity referred to. As the Advocate General has explained, in points 33, 45 and 46 of her Opinion, the criterion of independence concerns allocation of the transaction concerned to a particular person or entity, whilst also guaranteeing that the customer can exercise any right of deduction with legal certainty in that he or she will have the full name and address of the taxable person in question, in accordance with Article 226(5) of Directive 2006/112.

41To that end, it is necessary to examine whether the person concerned carries out an economic activity in his or her own name, on his or her own behalf and under his or her own responsibility, and whether he or she bears the economic risk associated with the carrying out of those activities (judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 28 and the case-law cited).

42It is apparent from the request for a preliminary ruling that, in the present instance, after the partnership at issue had been entered into with a view to carrying out a building project and XT’s partner had passed his contribution to XT, the plot of land was purchased by XT alone, in his own name. XT applied to the competent authorities for the construction permit, and obtained it, in his name. It was also XT, alone and in his name, who concluded the property development agreement. The partners decided that it would be XT who would be entered in the land register as sole owner. XT concluded in his own name the contracts of sale relating to all the buildings and to the plots of land appurtenant thereto, both before and after the decision to terminate the partnership at issue.

43Notwithstanding the fact that the agreement at issue contained a clause designating XT as the person who, in relations with third parties, acted in the name of both parties to the agreement, the referring court states, inter alia as regards the supplies at issue, that only XT participated in those relations, and that he did not mention the partner’s identity or the partnership at issue, so that it is, according to the referring court, highly likely that the persons to whom the supplies were made were unaware that a partner existed.

44It follows that XT acted in his own name and on his own behalf, assuming by himself the economic risk associated with the taxable transactions at issue.

45It is clear from the foregoing factors that, in circumstances such as those at issue in the main proceedings, the economic activity cannot be allocated to the entity set up by the joint activity agreement, as the partners have not acted together in their relations with third parties and the person empowered to act in the name of the partners as a whole has not been involved in those relations in accordance with the rules governing representation that are established by that agreement, so that that entity cannot be regarded as having carried out the taxable transactions at issue in the main proceedings. As the partner has not carried out any transaction himself, it is clear from all those factors that, in the present instance, only a person such as XT is to be regarded as having acted independently and therefore as a taxable person.

46That conclusion is not affected either by the fact that the partner provided significant finance for the purchase of the plot of land and that it was decided, when the partnership came to an end, to divide up the liabilities and the assets produced or by the fact that the decisions relating to the economic activity which is at issue in the main proceedings – and in the context of which the supplies at issue were made – such as the purchase of the plot of land and the decision to pursue a building project by using the sums obtained from selling the first building, were taken by the partners together. In the light of the fact that in the relations with third parties only XT was present, and that he did not mention the partnership at issue or the identity of his partner, the acts resulting from those decisions were carried out, as the Advocate General has observed, in essence, in point 54 of her Opinion, not by or for that partnership, but by XT, on his own behalf.

47Consequently, the participation of a partner such as XT’s partner in the decisions preceding the acts carried out by a person such as XT cannot affect that person’s status as a taxable person.

48The formal existence of an agreement such as that setting up the partnership at issue therefore does not preclude independence of a person such as XT when carrying out the economic activity.

49Furthermore, as regards the requirement laid down by the Court’s case-law referred to in paragraph 41 of the present judgment that the person concerned must have acted on his or her own behalf, it follows from the provisions of Directive 2006/112, in particular Article 14(2)(c) and Article 28 thereof, that, as the Advocate General has explained in point 56 of her Opinion, classification as a ‘taxable person’ is not precluded by having acted on behalf of another person, as a commission agent. Indeed, even though a person acts in his or her own name, but on behalf of another person, he or she is considered to be the taxable person, by means of the fiction established by that directive that he or she, first, received the goods in question before, secondly, making the supply thereof him or herself (see, by analogy, judgment of 14 July 2011, Henfling and Others, C‑464/10, EU:C:2011:489, paragraph 35).

50That rule could apply, in the present instance, in respect of the sale of the fifth building, which XT carried out in his own name, under a contract of sale concluded on 13 February 2013, although that building had been allocated and then transferred to the partner in pursuance of the deed of division that was concluded on 1 February 2013 in implementation of the decision taken on 10 January 2011 to terminate the partnership at issue. It is, however, for the referring court to establish whether that can be the case under national law, given that it is apparent from the request for a preliminary ruling that XT was still entered in the property register as owner of that building on the date of its sale.

51It follows from all the foregoing that a person in a situation such as that of XT must be regarded as the ‘taxable person’, within the meaning of Article 9(1) of Directive 2006/112, in so far as he or she has acted on his or her own behalf or on behalf of another person.

52In the light of all the foregoing considerations, the answer to the first question is that Article 9(1) and Article 193 of Directive 2006/112 must be interpreted as meaning that a natural person who has concluded with another natural person a joint activity agreement setting up a partnership, which lacks legal personality and is characterised by the fact that the first person is empowered to act in the name of the partners as a whole, but participates alone and in his or her own name in relations with third parties when performing acts that form the economic activity pursued by that partnership, must be regarded as a ‘taxable person’ within the meaning of Article 9(1) of Directive 2006/112 and as having sole liability for the VAT payable under Article 193 of that directive, since he or she acts on his or her own behalf or on behalf of another person as a commission agent as provided for in Article 14(2)(c) and Article 28 of that directive.

The second question

53In the light of the answer given to the first question, there is no need to answer the second question.

Costs

54Since 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 (Eighth Chamber) hereby rules:

Article 9(1) and Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that a natural person who has concluded with another natural person a joint activity agreement setting up a partnership, which lacks legal personality and is characterised by the fact that the first person is empowered to act in the name of the partners as a whole, but participates alone and in his or her own name in relations with third parties when performing acts that form the economic activity pursued by that partnership, must be regarded as a ‘taxable person’ within the meaning of Article 9(1) of Directive 2006/112 and as having sole liability for the value added tax payable under Article 193 of that directive, since he or she acts on his or her own behalf or on behalf of another person as a commission agent as provided for in Article 14(2)(c) and Article 28 of that directive.

Signatures

[Signatures]

( *1 ) Language of the case: Lithuanian.

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 23 April 2020 ¹

(Request for a preliminary ruling — Tax law — Value added tax — Directive 2006/112/EC — Article 9(1) — Concept of taxable person — Capacity to be a taxable person — Legal capacity — Allocation of transaction to a taxable person — Joint action by several persons — Action by an undisclosed partnership)

I. Introduction

1In this case, two persons planned and implemented a construction project for several buildings; however, only one of them (the applicant in the main proceedings) actively conducted himself outwardly, whereas his business partner, who only funded 70% of the acquisition costs, was involved in project decisions and received a corresponding share from the applicant on completion of the joint project and the sale of the new buildings.

2Where two persons work together, but only one person conducts himself outwardly in his own name, which of them is the taxable person (supplier) liable for payment of the VAT charged? The answer is important not only in terms of the supplier’s tax liability, but also in terms of the customer’s right of deduction. After all, the customer needs an invoice on which the name and address of the taxable person who sold the supply must be stated.

3Judgments of the Court to date have not concerned cases in which a person was involved in the background (i.e. silently) in an activity which another person performed in his own name alone. The Court has so far only addressed the question of the (pro rata) right of deduction of one co-owner in fact in respect of an invoice addressed to both co-owners. ² Therefore, this case affords an opportunity to explore the very fundamental issue of how to determine the taxable person where third parties are involved in his activities.

II. Legal context

A. EU law

4The legal context under EU law is determined by Article 9(1), Article 193 and Article 287 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ³ (‘the VAT Directive’).

5The first sentence of Article 9(1) of the VAT Directive provides:

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

6Article 193 of the VAT Directive concerns the person liable for payment of VAT and provided as follows in the version applicable in the contested years:

‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services …’

7Article 287 point 11 of the VAT Directive contains an exemption for small enterprises. It provides:

‘Member States which acceded after 1 January 1978 may exempt taxable persons whose annual turnover is no higher than the equivalent in national currency of the following amounts at the conversion rate on the day of their accession: …

11Lithuania: EUR 29000; …’

B. Lithuanian law

8Article 2(15) of the Lietuvos Respublikos pridėtinės vertės mokesčio įstatymas (Law of the Republic of Lithuania on value added tax, ‘the Law on VAT’) states:

‘“Taxable person of the Republic of Lithuania” means a legal or natural person of the Republic of Lithuania carrying out economic activities of any type, as well as a collective investment undertaking established in the Republic of Lithuania which does not have the status of legal person and acts as an investment fund.’

9Article 71(1) of the Law on VAT provides:

‘Taxable persons who supply goods or services in the territory of the country are required to register for VAT, calculate VAT and pay it to the State … A person required to register for VAT must submit an application for registration for VAT.’

10However, Article 71(2) of the Law on VAT provides:

‘Notwithstanding paragraph 1 [of Article 71 of the Law on VAT], a taxable person of the Republic of Lithuania shall not be required to submit an application for registration for VAT, calculate VAT or pay it to the State, in the manner laid down …, where the total annual consideration within the last 12 months for goods and/or services supplied in the territory of the country from carrying out economic activities did not exceed 155000 [Litai (LTL)]. VAT shall be calculated from the month in which that limit is exceeded. No VAT shall be calculated for the goods and services supplied for which the consideration does not exceed the sum of LTL 155000. …’

III. Main proceedings

11On 19 February 2010, the applicant in the main proceedings (‘the applicant’) and another natural person (‘the business partner’) concluded a joint activity agreement for the purpose of cooperation in constructing a residential property in or around Vilnius (Lithuania).

12On 25 April 2010, the applicant together with his business partner decided to purchase a parcel of agricultural land of 0.5 ha in the District of Vilnius. On 27 April 2010, the applicant and the owners of that parcel of land signed a sale contract for the parcel of land. The business partner contributed 70% and the applicant contributed 30% of the transaction amount. They made a decision to register ownership of the parcel of land in the applicant’s name.

13On 5 May 2010, the applicant and his business partner decided to build a complex of five buildings, to oblige the applicant to deal with all documents required for the construction and to appoint the private limited company Konsela (‘Konsela UAB’), the director of which was the applicant, to manage the construction.

14On 2 November 2010, the applicant received a construction permit issued in his name from the Vilnius District Municipal Authority giving permission to construct five buildings on the parcel of land. On 22 April 2010, the construction works contract was concluded, signed by the applicant, as the client, and the representative of Konsela UAB. The contractor issued a VAT invoice for the construction of Buildings Nos 1 to 4 on 15 February 2011 and for the construction of Building No 5 on 11 February 2013.

15On 2 December 2010, the applicant and his business partner decided to sell Building No 1 with a part of the parcel of land and to use the amount received for construction. That immovable property was sold under a sale contract of 14 December 2010 between the applicant and the purchasers (natural persons).

16On 10 January 2011, the applicant and the business partner concluded an agreement concerning termination of the joint activity agreement of 19 February 2010 and the division of property and liabilities. Under that agreement, it was decided to terminate the joint activity agreement and to grant the right to produced assets (Buildings Nos 4 and 5) to the business partner, while the applicant undertook to reimburse to the business partner by 2017 the difference between his contributions and the share of the joint assets received in the amount of LTL 300000 (EUR 86886).

17Buildings Nos 2 and 3 fell to the applicant under that agreement and were sold together with the parts of the parcel of land allocated to them on 30 May 2011 and 13 November 2012.

18On 1 February 2013, the applicant and his business partner drew up a property transfer (alienation) deed stipulating that, having regard to the agreement of 10 January 2011, the applicant transferred to his business partner Buildings Nos 4 and 5 together with the parts of the parcel of land allocated thereto.

19By decision of 6 February 2013, under the joint activity agreement of 19 February 2010, the applicant and his business partner resolved that the applicant would sell Building No 5 and the part of the parcel of land allocated thereto, registered in his name, and immediately transfer the amount received to the business partner. By sale contract of 13 February 2013, that immovable property was sold to a legal person established in Lithuania.

20The applicant and his business partner did not regard those sales of immovable property carried out on 14 December 2010, 30 May 2011, 13 November 2012 and 13 February 2013 as (economic) activity subject to VAT, which was why they did not calculate and identify the VAT to be paid by the purchasers, did not declare and pay the VAT and did not use a VAT deduction.

21After carrying out a tax inspection in respect of the applicant regarding personal income tax and VAT for 2010 to 2013, the local tax authority classified the contested supplies as a single activity subject to VAT and held the applicant to be a taxable person liable for the VAT relating to all those supplies.

22When calculating the VAT due, the local tax authority acknowledged on its own initiative the applicant’s right of deduction of VAT under the aforementioned VAT invoices issued by Konsela UAB and calculated the contested VAT amounts payable after deducting the VAT for the acquisition (construction) of the buildings.

23The applicant was asked to pay the calculated VAT of EUR 39 586.71, plus late payment interest of EUR 11695. By decision of 3 November 2015, the Vilniaus apskrities valstybinė mokesčių inspekcija (Vilnius County State Tax Inspectorate) confirmed the tax notice. The complaint concerning that decision was dismissed by the Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos (State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania) by decision of 3 March 2016.

24The applicant’s further appeals were dismissed by decision of the Mokestinių ginčų komisija (Commission on Tax Disputes) of 18 July 2016 and by judgment of the Vilniaus apygardos administracinis teismas (Regional Administrative Court, Vilnius, Lithuania). The applicant lodged an appeal against that judgment before the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania).

IV. Request for a preliminary ruling and proceedings before the Court

25By order of 10 April 2019, the Supreme Administrative Court of Lithuania referred the following questions to the Court for a preliminary ruling pursuant to Article 267 TFEU:

Are Article 9(1) and Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax to be interpreted as meaning that, in circumstances such as those in the case under consideration, a natural person such as the applicant cannot be regarded as having “independently” carried out the (economic) activity in question and as having to pay by himself the value added tax on the contested supplies, that is to say, for the purposes of Article 9(1) and Article 193 of Directive 2006/112, is the taxable person liable for the obligations at issue to be taken to be the joint activity/partnership (the participants in the joint activity collectively; in the instance under consideration, the applicant and his business partner collectively) — which under national law is not regarded as a taxable person and does not enjoy legal personality — and not solely a natural person such as the applicant?

If the first question is answered in the affirmative: Is Article 193 of Directive 2006/112 to be interpreted as meaning that, in circumstances such as those in the case under consideration, VAT is paid individually by each of the participants (in the instance under consideration, the applicant and his business partner) in the joint activity/partnership — which joint activity/partnership is, under national law, not regarded as constituting a taxable person and does not enjoy legal personality — on the part of each payment by way of consideration that is received by them (or is receivable by or owed to them) for the taxable supplies of immovable property? Is Article 287 of Directive 2006/112 to be interpreted as meaning that, in circumstances such as those in this case, the annual turnover referred to in that provision is established by taking into account the entire revenue of the joint activity (received collectively by the participants in the joint activity)?’

26In the proceedings before the Court, only the Republic of Lithuania and the European Commission submitted written observations.

V. Legal assessment

A. First question and first part of second question: Who is the correct taxable person in this case?

27By the first question and the first part of the second question, which can be examined together, the referring court wishes to know who ultimately is the taxable person in accordance with Article 9(1) of the VAT Directive and therefore liable for payment of the VAT on the parcels of land supplied in this particular case.

28The only possibilities are the applicant alone (according to the Lithuanian tax authorities), the partnership between the applicant and the business partner (in part, according to the Commission), the applicant and his business partner collectively (in the opinion of the referring court) or, in part at least, the business partner alone (in part, according to the Commission).

29The answer to this question depends on at least one of the four possibilities (applicant, business partner, partnership between applicant and business partner, applicant and business partner together) qualifying for recognition as a taxable person within the meaning of the VAT Directive (1.). This then raises the following question: what criteria should be applied in this case to decide which of the four possible taxable persons is liable for payment of the VAT on the sale of the parcels of land. That ultimately comes down to the question of how the specific transactions are allocated to each of the possible taxable persons (2.).

1. Capacity to be a taxable person

30According to the first sentence of Article 9(1) of the VAT Directive, ‘taxable person’ means any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity. ⁴

31According to the case-law of the Court, the terms used in Article 9(1) of the VAT Directive, in particular the term ‘any person who’, give to the notion of ‘taxable person’ a broad definition. ⁵ That definition focuses on independence in the pursuit of an economic activity to the effect that all persons — natural or legal, both public and private, even entities devoid of legal personality — which, in an objective manner, satisfy the criteria set out in that provision must be regarded as being taxable persons for the purposes of VAT. ⁶

32Thus, according to the Court, in order to establish that an economic activity is being carried out in an independent manner, it is necessary to examine whether the person concerned performs his activities in his own name, on his own behalf and under his own responsibility, and whether he bears the economic risk associated with the carrying-out of those activities. ⁷

33Although that final consideration is concerned more with the allocation of the transaction to a particular person and less with the status of the taxable person, it is, according to the case-law of the Court, a basic requirement of an economic activity according to Article 9 of the VAT Directive, whereas the legal form in which those activities are performed (natural person, legal person or partnership) and whether that legal form is recognised as having its own legal personality under national law are immaterial. ⁸

34However, economic activity requires the respective national legal system to recognise the capacity to act (in an economic sense) in legal transactions. ⁹ However, only structures which are able to have rights and obligations can act in legal transactions and therefore have legal capacity.

35Natural and legal persons have legal capacity per definitionem. Other structures (that is other forms of activity) may too under the respective national legal system, without (as the Court rightly emphasised) needing to have their own legal personality. However, without one’s own legal personality, one cannot be a taxable person within the meaning of the VAT Directive.

36On the one hand, this is confirmed by the case-law of the Court on the existence of a taxable supply, in which the Court emphasises that, in order for a taxable supply of a taxable person to exist, a legal relationship between the parties is needed, within the framework of which the supplies and the consideration are exchanged. ¹⁰ However, only a person with legal capacity can establish a legal relationship.

37On the other hand, this confirms the case-law of the Court on the function of a taxable person in the system of VAT, ¹¹ in which the Court has found that the taxable person performs the function of tax collector on behalf of the State. ¹² However, only a structure with legal capacity can identify tax on an invoice and collect it via the price or enforce it.

38The Commission’s counter-contention that the Court has already recognised a civil partnership/marital community (without legal capacity) as a taxable person, ¹³ must be refuted.

39That is because the judgment of the Court cited by the Commission ¹⁴ did not concern the question of who in that particular case was the taxable person liable for payment of the VAT. On the contrary, it concerned co-ownership in fact in which several persons co-owned a property in Germany with undivided shares. That community by undivided shares was simply a participation in rem in a property which could not act as such in legal transactions. ¹⁵ However, one of the co-owners was already a taxable person and wanted to exercise the right of deduction in respect of the production costs of part of the property used for business purposes.

40In HE, the Court’s ruling on the question of who was the recipient of the transactions was that the community by undivided shares formed by the two spouses was neither a partnership with legal personality nor a form which, although without legal personality, was able to act independently; therefore it was not carrying out an economic activity ¹⁶ and it was the co-owners who were the recipients of the transaction. ¹⁷ Thus, on the contrary, the Court rightly found that a form of cooperation without legal capacity (that is a community without the power to act) does not have the capacity to be a taxable person.

41Therefore, the fact remains that a certain legal capacity is required in order to be a taxable person within the meaning of the VAT Directive. In this case, either the applicant or the business partner alone or the applicant together with his business partner could easily have that capacity by reason of the fact that they are natural persons and thus have legal capacity.

42However, what is unclear in this case is whether the form of cooperation between the applicant and the business partner had that capacity. The referring court is required to decide, based on the rules of the national legal system, whether that form of cooperation can in fact act in legal transactions or whether it is, on the contrary, merely an undisclosed partnership that cannot conduct itself outwardly. After all, it might be a silent partnership in which the business partner merely has a financial interest in the activities of the applicant, while he (rather than the partnership) acts outwardly.

43If the national legal system recognises the capacity of this form of cooperation between the applicant and his business partner to enter into such legal relationships, then it can also be a taxable person. However, it cannot be a taxable person if the national legal system does not recognise that capacity for this form of cooperation (an example in Germany would be a silent partnership within the meaning of Paragraph 230 of the Handelsgesetzbuch (Commercial Code)).

2. Allocation of specific transactions to a taxable person

44Which of the three or four possible taxable persons should be allocated the taxable transactions and be liable for payment of VAT in this particular case is a separate question.

45The case-law cited above (see points 31 and 32) provides a starting point. According to that case-law, in order to establish that an economic activity is being carried out in an independent manner, it is necessary to examine whether the person concerned performs his activities in his own name, on his own behalf and under his own responsibility, and whether he bears the economic risk associated with the carrying-out of those activities. ¹⁸ That is because, where there are several possible taxable persons, only one taxable person can ultimately fulfil those criteria. As far as I am aware, it is not possible to act fully in one’s own name and in the name of a third party at one and the same time.

46These criteria established by the Court also guarantee that the customer can exercise any right of deduction with legal certainty as, according to Article 226, point 5, of the VAT Directive, the customer requires an invoice with the full name and address of the taxable person in order to do so. However, he can only verify that information on the invoice if he knows who has acted in relation to him (that is, outwardly).

47In that sense, it is necessary in this case to examine who supplied the new buildings to each respective purchaser in light of those criteria.

48According to the referring court, the applicant alone purchased the parcels of land in his own name and was the sole owner recorded in the land register, he alone applied for and obtained the construction permit and he alone sold the new buildings in his own name and raised the corresponding invoices. Even if the form of cooperation between the applicant and the business partner had legal capacity under national law, it did not conduct itself outwardly in its own name in the legal transactions. As the cooperation between the applicant and the business partner had already ended on 10 January 2011, it is also hard to imagine that they carried out the transactions in May 2011, November 2012 and February 2013 as well. Nor did the applicant and his business partner jointly conduct themselves outwardly, either before or after their cooperation had ended. Thus, it follows immediately from those facts that the applicant alone acted as a taxable person in this particular case.

49The business partner’s internal share of the profit and loss does not alter that. Contrary to the view taken by the referring court and the Commission, the fact that a third party has an internal financial interest does not mean that the person carrying out the activity outwardly (in this case the applicant) has ceased to act independently. On the contrary, he has in any event initially acted alone, on his own behalf and at his own risk and is therefore the taxable person liable for payment of the VAT incurred on the transaction.

50The applicant simply then has the opportunity to pass part of the risk on to another person or the obligation to share the profit with another person. Inasmuch as it is uncomfortable with the fact that the applicant alone is liable for payment of all the VAT, the referring court has overlooked the fact that, depending on how the internal arrangement is configured, the business partner also contributed to those additional project costs. If sharing of those costs was forgotten in the internal arrangement, that is simply a question of the interpretation of the arrangement. However, it has no impact on who qualifies as the taxable person carrying out the activity for VAT purposes.

51The fact, mentioned by the referring court, that the tax authorities allocated certain income to the business partner for income tax purposes is also immaterial here, as national income tax law and EU VAT law pursue different objectives. For example, as a rule, income tax law generally taxes the income of persons who do not act independently, such as employees, whom the VAT Directive expressly excludes as taxable persons (Article 10).

52Furthermore, the subsequent (internal) possibility of passing the risk on to a third party does not of itself change the fact that the person initially acted on their own behalf. This can be illustrated using an insurance policy as an example. Even if an insurance policy covers all the economic risks of a transaction conducted by an enterprise, that does not alter the fact that the acting enterprise is the taxable person. Therefore, the insurance policy does not become the taxable person in respect of that transaction, because the enterprise is able to pass on the risk of loss in the event of a claim. The same would apply to any internal sharing of profit from the insurance policy.

53Similarly, it follows from Article 132(1)(f) of the VAT Directive that internal forms of cooperation must themselves conduct transactions in order to be treated as taxable persons. That is not the case here, however. According to the facts recounted, the initial transactions (the sale of the new buildings) were carried out by the applicant alone, not by the form of cooperation between the applicant and the business partner.

54Even the business partner’s internal involvement in business decisions, highlighted by the referring court, does not affect that conclusion. It has no outward effects and, therefore, cannot affect the taxable person status of the person acting outwardly. First, it is nigh impossible to determine with legal certainty the relevant impact of a third party required for that to happen. Second, the customer cannot identify that internal influence even approximately, meaning that his right of deduction would always be in jeopardy due to the absence of an invoice in due form. This would conflict with the principle of a simple and efficient system of value added tax. ¹⁹

55Moreover, as the Court has previously ruled, ‘the fact that some degree of cooperation occurs’ cannot suffice to call into question the independence of the person carrying out the activity. ²⁰ In addition, the determinative role of a person in production ‘does not appear capable’ of calling into question the finding that the persons carry out their activities independently, in that each of them acts in his own name, on his own behalf and under his own responsibility. ²¹ In that context, the Court has also regarded persons which conduct themselves outwardly as such in relation to their suppliers, public authorities and, to a certain extent, their customers as independent undertakings which are taxable persons for VAT purposes, even though they acted for the most part under a common trade mark through a limited company whose share they hold. ²² This applies a fortiori in this case, in which the applicant conducted himself independently in relation to the vendor of the parcels of land and, later, in relation to the planning authorities and, subsequently, his purchasers.

56The relevance of conducting oneself outwardly is also illustrated by the rules in the VAT Directive on commission payable on purchase or sale (Article 14(2)(c) and Article 28). In particular, Article 28 of the VAT Directive ²³ clearly illustrates that the deciding factor is that the person is acting in his own name, even if not on his own behalf. That is because, where a taxable person acts in his own name but on a third party’s behalf, it is by performing the activity that he supplies the goods or services and he therefore remains an independent taxable person.

57This might be important in particular in relation to the ‘termination agreement’ of 10 January 2011 and the property transfer deed of 1 February 2013 for Buildings Nos 4 and 5. After all, the subsequent sale of Building No 5 by the applicant to third parties might possibly have been a transaction for commission in accordance with Article 14(2)(c) of the VAT Directive.

58However, even if this case did involve a transaction for commission, that would not change the applicant’s status as a taxable person acting independently. He acted in the sale of the buildings either in his own name and on his own behalf (‘trading for own account’) or in his own name on behalf of a third party (‘trading for commission’).

3. Intermediate conclusion

59Thus, in this case, the applicant would appear to be the taxable person liable for payment of the VAT. He alone acted in his own name and on his own behalf (or possibly on behalf of a third party) and thus at his own risk in relation to his customers (that is, outwardly).

B. Second part of the second question: calculation of annual turnover for the purpose of the exemption for small enterprises

60As, in my opinion, only the applicant can be regarded as a taxable person, there is no need to answer the second part of the second question.

61However, it needs to be answered in the alternative, in case the Court holds that either the (silent) partnership between the applicant and the business partner or both those persons might possibly be taxable persons each for their own part. It concerns how annual turnover is calculated for the purpose of the exemption for small enterprises where several persons are involved in generating the turnover.

62As the Commission rightly states, the exemption for small enterprises relates to the individual taxable persons and their turnover. That follows from the wording and the spirit and purpose of Article 287 of the VAT Directive.

63As the tax exemption is not objectively linked to the nature of the activity, but only to a turnover limit not being reached by the individual taxable persons, Article 287 of the VAT Directive provides for a subjective exemption. As the Court has already ruled ²⁴ and I have stated elsewhere, ²⁵ the purpose behind this subjective exemption resides primarily in administrative simplification.

64Without such a limit, the tax authorities would have to treat any person who carries on even a limited economic activity for the purposes of Article 9 of the VAT Directive as a taxable person from the first euro. This would give rise to administrative expenditure not only for the taxable person but also for the tax authorities, for which there would be no corresponding tax revenue. ²⁶ The de minimis limit in Article 287 of the VAT Directive is designed to avoid this. ²⁷

65That purpose also applies where two taxable persons act jointly, but each on his own behalf, without being regarded jointly as an independent taxable person. The same applies where joint action gives rise to a new taxable person who, by reason of his own legal capacity, must be distinguished from his ‘founders’ and does not exceed the de minimis limit.

66If, therefore, the partnership between the applicant and the business partner is the taxable person performing the activity, the turnover of the partnership would be the criterion for the purpose of establishing annual turnover within the meaning of Article 287 of the VAT Directive. If it is the applicant and the business partner in the amount of their respective interest in the joint transactions, then the annual turnover must also be considered separately for each of them. Provided the configuration selected in each case is not to be regarded as an abusive practice, ²⁸ and there is no evidence of that in this case, this conclusion applies.

67In the alternative, the answer to the second part of the second question must therefore be: Article 287 of the VAT Directive provides for a subjective exemption from VAT. Therefore, the annual turnover relates to the individual taxable persons carrying out the activity.

VI. Conclusion

Conclusion

68To conclude, I propose that the Court answer the questions referred for a preliminary ruling by the Lietuvos vyriausiasis administracinis teismas (Supreme Administrative Court of Lithuania) as follows:

Article 9(1) and Article 193 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 the taxable persons referred to therein must be able to enter into legal relationships, identify VAT on an invoice and collect it on the basis of the agreed price. This depends upon their capacity to act as such in legal transactions under the national legal system, that is their legal capacity.

Article 9(1) and Article 193 of Directive 2006/112/EC are to be interpreted as meaning that a person with the capacity to be a taxable person performs the economic activity concerned ‘independently’ if he acts in his own name and on his own behalf (or on behalf of a third party within the framework of trading for commission), as the applicant did in this case.

¹ Original language: German.

² Judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241).

³ OJ 2006 L 347, p. 1.

⁴ See judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 26); of 29 September 2015, Gmima Wrocław (C‑276/14, EU:C:2015:635, paragraph 27); and of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 35).

⁵ Judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 27), and of 29 September 2015, Gmima Wrocław (C‑276/14, EU:C:2015:635, paragraph 28).

⁶ Judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 27), and of 29 September 2015, Gmima Wroclaw (C‑276/14, EU:C:2015:635, paragraph 34).

⁷ Judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 28), and of 29 September 2015, Gmima Wroclaw (C‑276/14, EU:C:2015:635, paragraph 34). See also, to that effect, judgment of 18 October 2007, van der Steen (C‑355/06, EU:C:2007:615, paragraph 23).

⁸ As expressly found in judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 27); of 29 September 2015, Gmima Wrocław (C‑276/14, EU:C:2015:635, paragraph 28); and of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54).

⁹ The Court refers to a form which, although without legal personality, is able to act independently — see judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54).

¹⁰ Judgments of 27 March 2014, Le Rayon d’Or (C‑151/13, EU:C:2014:185, paragraph 29); of 3 May 2012, Lebara (C‑520/10, EU:C:2012:264, paragraph 27); and of 3 March 1994, Tolsma (C‑16/93, EU:C:1994:80, paragraph 14). In its judgment of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 43), the Court refers to agreement between the parties on a price. However, only a person with legal capacity can enter into such an agreement.

¹¹ See judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25); and my Opinion in Dong Yang Electronics (C‑547/18, EU:C:2019:976, point 41).

¹² See judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25).

See also, in that regard, my Opinion in Di Maura (C‑246/16, EU:C:2017:440, point 21).

¹³ The Commission cites in support of that statement the judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 58), which expressly states: ‘Therefore, the answer to the second question must be that where a marital community which does not have legal personality and does not itself carry out an economic activity within the meaning of the Sixth Directive places an order for a capital item, the co-owners forming that community are to be regarded as recipients of the transaction for the purposes of the directive.’ How this means that the Court recognised the marital community as a taxable person is a mystery to me.

¹⁴ Judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241).

¹⁵ See also, in that regard, the Court’s correct assessment judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 32). This would not apply if the co-owners with undivided shares established a partnership which was able to conduct itself outwardly in legal transactions and generate its own turnover, in which case the partnership would be the taxable person carrying out the activity based on that legal capacity.

¹⁶ Judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54).

¹⁷ Judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 58).

¹⁸ Judgments of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 28), and of 29 September 2015, Gmima Wroclaw (C‑276/14, EU:C:2015:635, paragraph 34). See also judgment of 18 October 2007, van der Steen (C‑355/06, EU:C:2007:615, paragraph 23).

¹⁹ In this regard, see in particular the fifth recital in the preamble to the VAT Directive.

²⁰ Judgment of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 31) and, before that, Opinion of Advocate General Szpunar in Nigl (C‑340/15, EU:C:2016:505, point 21), who states that ‘the very fact that there is cooperation, even close cooperation’ does not indicate that the person has ceased to be an independent taxable person.

²¹ Judgment of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 33).

²² Judgment of 12 October 2016, Nigl (C‑340/15, EU:C:2016:764, paragraph 34).

²³ Article 28 of the VAT Directive reads as follows: ‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’

²⁴ Judgments of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, end of paragraph 37), and of 26 October 2010, Schmelz (C‑97/09, EU:C:2010:632, paragraph 63).

²⁵ Opinions in Administraţia Judeţeană a Finanţelor Publice Caraş-Severin — Serviciul Inspecţie Persoane Fizice, Direcţia Generală Regională a Finanţelor Publice Timişoara — Serviciul Soluţionare Contestaţii 1 (C‑716/18, EU:C:2020:82, point 22 et seq.), and in Schmelz (C‑97/09, EU:C:2010:354, end of point 33).

²⁶ As expressly stated in the judgment of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, paragraph 38).

²⁷ See p. 27 of the explanatory memorandum of the Commission proposal of 20 June 1973 (COM(73) 950 final) on Article 25 (small undertakings).

²⁸ In that regard, see in particular, judgment of 22 November 2017, Cussens and Others (C-251/16, EU:C:2017:881, paragraph 31 et seq.).