C-33/16 A

JUDGMENT OF THE COURT (Eighth Chamber)

4 May 2017 ( *1 )

‛Reference for a preliminary ruling — Taxation — Value added tax — Directive 2006/112/EC — Article 148(d) — Exemption — Supply of services to meet the direct needs of vessels used for navigation on the high seas — Loading and unloading of cargo by a subcontractor on behalf of an intermediary’

In Case C‑33/16,

REQUEST for a preliminary ruling under Article 267 TFEU from the Korkein hallinto-oikeus (Supreme Administrative Court, Finland), made by decision of 15 January 2016, received at the Court on 20 January 2016, in the proceedings brought by

A Oy

intervening parties:

Veronsaajien oikeudenvalvontayksikkö,

THE COURT (Eighth Chamber),

composed of J. Malenovský (Rapporteur), acting as President of the Eighth Chamber, M. Safjan and D. Šváby, Judges,

Advocate General: Y. Bot,

Registrar: I. Illéssy, Administrator,

having regard to the written procedure and further to the hearing on 20 October 2016,

after considering the observations submitted on behalf of:

A Oy, by R. Nyrhinen and M. Pokkinen,

the Finnish Government, by H. Leppo, acting as Agent,

the Greek Government, by E. Tsaousi and K. Nasopoulou, acting as Agents,

the Netherlands Government, by K. Bulterman and M. de Ree, acting as Agents,

the Polish Government, by A. Kramarczyk-Szaładzińska and B. Majczyna, acting as Agents,

the European Commission, by M. Owsiany-Hornung and P. Aalto, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 7 December 2016,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of Article 148(d) 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 brought by A Oy concerning a tax decision adopted by the Keskusverolautakunta (Finnish Central Tax Board) by which it held that the loading and unloading cargo onto and off a vessel, when supplied by a subcontractor which invoices them to the contracting undertaking rather than to the ship owner directly, do not qualify for the exemption from value added tax (VAT) provided for in Article 148(d) of Directive 2006/112.

Legal context

European Union law

3The 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 (OJ 1977 L 145, p. 1), as amended by Council Directive 91/680/EEC of 16 December 1991 (OJ 1991 L 376, p. 1) (‘the Sixth Directive’) provided in Article 15 thereof:

‘Without prejudice to other Community provisions, Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any possible evasion, avoidance or abuse:

1the supply of goods dispatched or transported to a destination outside the Community by or on behalf of the vendor;

…

5the supply, modification, repair, maintenance, chartering and hiring of the sea-going vessels referred to in paragraph 4(a) and (b) and the supply, hiring, repair and maintenance of equipment — including fishing equipment — incorporated or used therein;

…

8the supply of services other than those referred to in paragraph 5, to meet the direct needs of the sea-going vessels referred to in that paragraph or of their cargoes;

…’

4The Sixth Directive was repealed by Directive 2006/112, which entered into force on 1 January 2007.

5Article 28 of Directive 2006/112 provides:

‘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 131 of Directive 2006/112 provides:

‘The exemptions provided for in Chapters 2 to 9 [of Title IX] shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.’

7Chapter 7 of Title IX of that directive, entitled ‘Exemptions related to international transport’, provides:

‘Member States shall exempt the following transactions:

the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships’ provisions;

…

the supply, modification, repair, maintenance, chartering and hiring of the vessels referred to in point (a), and the supply, hiring, repair and maintenance of equipment, including fishing equipment, incorporated or used therein;

the supply of services other than those referred to in point (c), to meet the direct needs of the vessels referred to in point (a) or of their cargoes;

…’

Finnish law

8Paragraph 71(3) of Arvonlisäverolaki 1501/1993 (Law No 1501/1993 on value added tax) of 30 December 1993, in the version applicable at the time of the facts of the main proceedings (‘the AVL’), provides:

‘Tax is not payable on the following sales:

…

the sale of services on board a ship or an aircraft engaging in international traffic to persons travelling abroad and the sale of services to meet the direct needs of such a ship or its cargo.’

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

9A is a subsidiary of B Oy. It operates in two ports where it supplies loading and unloading, warehousing, shipping agency and freight forwarding services.

10The services supplied by A include the loading and unloading of the cargo of vessels used for navigation on the high seas and for the purposes of a commercial activity. In practice, the loading and unloading is carried out by a subcontractor which invoices those services to A, which re-invoices them to its customers which, depending on the circumstances, may be B Oy, the holder of the goods, the loader, the forwarding company or the ship owner. The details of the vessel and the cargo concerned are sent to the subcontractor and set out both on its invoice and on the invoice issued by A.

11A made a request for a tax decision from the Central Tax Board asking whether, in accordance with Paragraph 71(3) of the AVL, the loading and unloading of cargo carried out by subcontractors acting on behalf of its customers are eligible for exemption from VAT.

12By decision of 1 October 2014, the Central Tax Board informed A that the services of loading and unloading cargo are not to be regarded as services exempt from VAT under Paragraph 71(3) of the AVL, which transposes Article 148(a), (c) and (d) of the VAT Directive, because the supply of services to vessels operating in international traffic or to their cargoes may be exempt from VAT only if those services are provided at the end of the commercial chain. In the circumstances under consideration in the request, the loading and unloading services are provided at an earlier stage.

13A brought an appeal against that decision before the Korkein hallinto-oikeus (Supreme Administrative Court, Finland), on the ground that it was contrary to Article 148(d) of Directive 2006/112, since that provision must be interpreted as meaning that supplies of services which, by their nature, are linked to the direct needs of the cargo of vessels, such as loading and unloading of cargo, must be exempt from VAT, irrespective of the person which sells or buys those services.

14In its defence, the Finnish tax administration relied, in particular, on the judgment of the Court of Justice of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563), arguing that the VAT exemption laid down by that provision applies only at the end of the commercial chain of the services concerned.

15However, the referring court considers that, where it is clear from the nature of the service concerned that they are supplied to meet the direct needs of the cargo of vessels used for navigation on the high seas and for the purposes of a commercial activity, that judgment does not enable it to answer the question whether it is still necessary for the application of the VAT exemption that those services are directly invoiced to the ship owner.

16In those circumstances, the Korkein hallinto-oikeus (Supreme Administrative Court, Finland) decided to stay proceedings and seek a preliminary ruling from the Court on the following questions:

Is Article 148(d) of Directive 2006/112 to be interpreted as meaning that the services of loading and unloading of cargo onto and off a vessel are supplies of services made to meet the direct needs of the cargo of vessels for the purposes of Article 148(a)?

Given the findings of the Court of Justice in paragraph 24 of the judgment [of 14 September 2006, Elmeka, C‑181/04 to C‑183/04, EU:C:2006:563], according to which the exemption provided for in those rules could not be extended to services supplied at an earlier stage in the commercial chain, is Article 148(d) of Directive 2006/112 to be interpreted as meaning that it applies also to the services at issue in the case in the main proceedings in which the service supplied by A’s subcontractor in the first phase of operations concerns a service which has a direct physical relationship to the cargo, which A re-invoices to the forwarding or transport company?

In light of the findings of the Court of Justice in paragraph 24 of the judgment [of 14 September 2006, Elmeka, C‑181/04 to C‑183/04, EU:C:2006:563], according to which the exemption provided for by the rules in question apply only to services which are supplied to the ship owner, is Article 148(d) of Directive 2006/112 to be interpreted as meaning that that exemption cannot apply if the service is supplied to the cargo holder, such as the exporter or importer of the cargo concerned?’

Consideration of the questions referred

The first question

17By its first question, the referring court asks essentially whether Article 148(d) of Directive 2006/112 must be interpreted as meaning that the loading and unloading of cargo are services to meet the direct needs of the cargo of the vessels referred to in Article 148(a) thereof.

18As a preliminary point, it must be recalled that, in accordance with Article 148(d) of Directive 2006/112, the supply of services, other than those referred to in point (c) of that article, made for the direct needs of the vessels referred to point (a) of that article, are exempt from VAT.

19Thus, it is clear from the wording of Article 148(d) that, to be one of those ‘other services’, that provision requires, first, that the services at issue are performed to meet the direct needs of a vessel and its cargo and, second, that that vessel is one of those referred to in Article 148(a) of that directive.

20As regards the second of those two conditions, the referring court appears to take the view that, in the case in the main proceedings, that condition is fulfilled, which is for that court to ascertain.

21As far as concerns the first condition, it must be observed that Article 148(d) of Directive 2006/112 does not indicate how the concept of ‘direct needs of a vessels and its cargo’ is to be understood. In those circumstances, that concept must be interpreted with regard to the context of which Article 148(d) forms part.

22In that connection, it must be recalled that Article 148(c) of Directive 2006/112, to which Article 148(d) expressly refers, aims, like the latter, to exempt services related to international maritime transport and refers, in order to designate those services, to the same vessels, namely those referred to in point (a) thereof. Those two provisions thus being similar and complementary, the concept of ‘direct needs of a vessel and its cargo’ must be interpreted being guided by the general scheme of the provisions of Article 148(c) of that directive.

23It must be observed that Article 148(c) of Directive 2006/112 exempts, inter alia, hire, repairs and maintenance if the latter pertains to something used for the operation of vessel covered by point (a) of that article. Essentially, Article 148(c) therefore lays down a requirement for the existence of a link between the supply of services made and the operation of the vessel concerned (see, to that effect, judgment of 4 July 1985, Berkholz, 168/84, EU:C:1985:299, paragraph 21).

24The services of loading and unloading of cargo satisfy that requirement. The transport of cargo constitutes a usual form of operating vessels used for navigation on the high seas. In order for cargo to be transported and, thus for a vessel to be operated, it is necessary for that cargo to be transported from the port of departure and then unloaded at the port of arrival.

25Therefore, such services must be regarded as meeting the direct need of the cargo of a vessel referred to in Article 148(a) of Directive 2006/112 and, since they are necessary to the operation of a vessel transporting that cargo as also meeting the direct needs of that vessel.

26Under those circumstances, the answer to the first question is that Article 148(d) of Directive 2006/112 must be interpreted as meaning that loading and unloading of cargo are services supplied for the direct needs of the cargo of the vessels referred to in Article 148(a) thereof.

Concerning the second and third questions

27By its second and third questions, which it is appropriate to examine together, the referring court asks essentially whether Article 148(d) of Directive 2006/112 must be interpreted as meaning that only the loading and unloading of cargo carried out at the end of the commercial chain of such services covered by Article 148(a) thereof are exempt, or whether services performed at an earlier stage, such as services supplied by the subcontractor of an economic operator which then re-invoices them to a freight forwarder or a transporter are also exempt. The referring court also asks whether Article 148(d) must be interpreted as meaning that services for loading and unloading cargo supplied to the holder of that cargo, such as the exporter or importer are also exempt.

28In the first place, it must be observed that, as regards the supply of services that it covers, Article 148(d) of Directive 2006/112 does not refer to a particular stage of the commercial chain, and does not mention any person to whom those services are to be invoiced. Therefore, the wording of that provision in itself does not give rise to the conclusion that services supplied at a stage prior to the end of the commercial chain or those invoiced to an intermediary are excluded from the benefit of the exemption which it provides.

29In those circumstances, it must be examined whether such exclusion may derive from the context of which Article 148(d) of Directive 2006/112 forms part.

30In that connection, in accordance with Article 131 of Directive 2006/112 which sets out in identical terms the first sentence of Article 15 of the Sixth Directive, the exemption provided for in Article 148(d) of Directive 2006/112 must be able to be implemented by the Member States in a manner which permits its correct and straightforward application, and the prevention of any possible fraud, avoidance and abuse.

31In such a context, the Court held, in paragraph 24 of the judgment of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563) to which the national court refers, that the exemption laid down in Article 15(8) of the Sixth Directive, whose wording is repeated in Article 148(d) of Directive 2006/112, applies only to operations made at the end of the commercial chain concerned.

32However, it must be recalled that the circumstances of the joined cases which gave rise to the judgment of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563) were very specific, concerning services for the transport of petroleum products for provisioning vessels which were then sold on to ship owners. Therefore, several transactions had to physically take place before the services supplied could be used to meet the needs referred to in Article 15(8) of the Sixth Directive, such use only being guaranteed once the fuel was delivered to the operators of the vessels which would use it. Therefore, in that judgment, the Court held that the extension of the exemption provided for to earlier stages of the commercial chain of those services would require the putting in place of guarding and surveillance services in order to ensure the ultimate use of that fuel. Those mechanisms would amount to constraints which would be impossible to reconcile with the correct and straightforward application of the exemptions.

33Such case-law, adapted to the specificities of the cases which gave rise to that judgment, concerning supplies of services liable to be diverted and used for purposes other than those originally intended, cannot be transposed to situations in which, having regard to its nature, the purpose of a supply of services may be guaranteed once it is agreed. In such situations the correct and straightforward application of the exemption laid down in Article 148(d) of Directive 2006/1112 is guaranteed without the need for guarding and surveillance services.

34Such is the situation with services of loading and unloading of cargo, such as those at issue in the main proceedings. It is clear from the answer to the first question that the verification of whether those services fulfil the conditions for the application of the exemption laid down in Article 148(d) of Directive 2006/112 depends solely on the type of vessels onto or from which the loading and unloading is to be carried out. Therefore, the use which is made of those services may be guaranteed once the implementation is agreed.

35Since no other individual elements are able to justify the limitation of the application of the exemption laid down in Article 148(d) of that directive to the end of the commercial chain of the services at issue, it must be held that that exemption applies, as regards services for loading and unloading of cargo, such as those at issue in the main proceedings, not only to services supplied at the end of the commercial chain of those services, but also to those supplied at an earlier stage.

36Moreover, that conclusion is borne out by the objective pursued by Article 148 Directive 2006/112.

37As appears from the title of Chapter 7 of Title IX of that directive, the objective pursued by the latter is to facilitate the international transport of goods or persons. To interpret the exemption laid down in Article 148(d) of Directive 2006/112 as applying only to the end of the commercial chain of loading and unloading services would be contrary to such an objective, since each intermediary in that chain would have to pass on the cost of financing the advance cash-flow arising from the payment of the VAT, that interpretation would lead to an increase in the prices applied in international transport, without such an increase being justified by the need to guarantee the correct and straightforward application of that exemption.

38Second, as regards the loading and unloading of cargo supplied to an economic operator but re-invoiced to another operator, such as a freight forwarder or transporter, it is common ground, first, that all economic operators are presumed to act on their own behalf. Secondly, where a person agrees to pay an invoice for the supply of services, on behalf of another, it may be regarded as taking part in the supply of those services.

39Article 28 of Directive 2006/112 provides that, where a taxable person acting in his own name but on behalf of another takes part in a supply of services, he is to be considered to have received and supplied those services himself.

40It follows that, when loading or unloading of cargo carried out for an economic operator is re-invoiced to a freight forwarder or transporter, it must be held, unless it is established that that undertaking has not acted on its own behalf, that a new supply of services has been made, which has had the effect of changing the place in the commercial chain of the services supplied earlier.

41However, that fact, in itself, cannot call into question the application, to services relating to loading and unloading of cargo, of the exemption provided for in Article 148(d) of Directive 2006/112. If, as is clear from paragraph 35 of the present judgment, the exemption laid down by that provision applies to such services irrespective of the stage of the commercial chain when the supply at issue takes place, the fact that a further supply of services takes place in that chain has no effect on the application of the exemption.

42Third, as far as concerns the applicability of the exemption laid down by Article 148(d) of Directive 2006/112 to loading and unloading services supplied to the holders of the cargo concerned, in so far as, as stated above, that it may apply to loading and unloading of cargo irrespective of the stage of the commercial chain in which the supply at issue is made, such supplies of services may be exempt if they are part of that commercial chain.

43In that connection, as the referring court states, the Court of Justice held, in paragraph 24 of the judgment of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563), that the commercial chain of the services at issue in the cases which gave rise to that judgment ended where those services were supplied to the owner of the vessel concerned.

44That being said, such a solution must also be placed in its context. Those cases concerned the transport of petroleum products for the provisioning of vessels. Given that such supplies of services were to meet the needs of the vessels concerned without being directly related to the cargo transported, they could not therefore be passed on, as such, to the holders of the cargo.

45However, in the case of loading and unloading of cargo, which is directly related to the cargo transported and where therefore may be passed on, as such, to the holders of that cargo, the supply of those services to the holder of that cargo must be regarded as always being part of the commercial chain of those services. It follows that such supplies of services may be exempt on the basis of Article 148(d) of Directive 2006/112.

46In those circumstances, the answer to the second and third questions is that Article 148(d) of Directive 2006/112 must be interpreted as meaning that, first, not only supplies of services concerning loading or unloading cargo onto or from a vessel covered by Article 148(a) of that directive which take place at the end of the commercial chain of such services may be exempt, but also supplies of services made at an earlier stage, such as services supplied by a subcontractor to an economic operator which then re-invoices them to a freight forwarder or transporter and, second, services for loading and unloading of cargo supplied to the holders of that cargo, such as the exporter or importer may also be exempt.

Costs

47Since 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 148(d) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that loading and unloading of cargo are services supplied for the direct needs of the cargo of the vessels referred to in Article 148(a) thereof.

In those circumstances, the answer to the second and third questions is that Article 148(d) of Directive 2006/112 must be interpreted as meaning that, first, not only supplies of services concerning loading or unloading cargo onto or from a vessel covered by Article 148(a) of that directive which take place at the end of the commercial chain of such a service may be exempt, but also supplies of services made at an earlier stage, such as services supplied by a subcontractor to an economic operator which then re-invoices them to a freight forwarder or transporter and, second, services for loading and unloading of cargo supplied to the holders of that cargo, such as the exporter or importer may also be exempt.

Signatures

[Signatures]

( *1 ) Language of the case: Finnish.

OPINION OF ADVOCATE GENERAL

BOT

delivered on 7 December 2016 ¹

‛Reference for a preliminary ruling — Taxation — Value added tax (VAT) — Directive 2006/112/EC — Article 148(d) — Supply of services — Concept — Exemption — Supply of services to meet the direct needs of vessels used for navigation on the high seas or of their cargoes — Supply of cargo-loading or -unloading services by subcontractors acting on behalf of intermediaries’

1This request for a preliminary ruling concerns the interpretation of Article 148(d) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax. ²

2It has been made in the course of a dispute between A Oy ³ and the Keskusverolautakunta (Finnish Central Tax Board) concerning a tax decision in which the latter considered that the services of loading and unloading cargo onto and off a vessel, when supplied by a subcontractor which invoices them to the contracting undertaking rather than to the shipowner directly, do not qualify for the VAT exemption provided for in Article 148(d) of the VAT Directive.

3In this Opinion, I shall argue that the concept of the supply of services to meet the direct needs of the vessels referred to in Article 148(a) of that directive or of their cargoes includes the services of loading and unloading cargo onto and off a ship.

4I shall further submit that the exemption provided for in Article 148(d) of that directive includes the services of loading and unloading cargo onto and off a ship, where those services are supplied by a subcontractor acting on behalf of an economic operator which is itself linked not to the shipowner but to a freight forwarder, carrier or forwarding agent, or to the holder of the cargo concerned.

I – Legal context

A – EU law

5Article 148(a), (c) and (d) of the VAT Directive provides:

‘Member States shall exempt the following transactions:

the supply of goods for the fuelling and provisioning of vessels used for navigation on the high seas and carrying passengers for reward or used for the purpose of commercial, industrial or fishing activities, or for rescue or assistance at sea, or for inshore fishing, with the exception, in the case of vessels used for inshore fishing, of ships’ provisions;

…

the supply, modification, repair, maintenance, chartering and hiring of the vessels referred to in point (a), and the supply, hiring, repair and maintenance of equipment, including fishing equipment, incorporated or used therein;

the supply of services other than those referred to in point (c), to meet the direct needs of the vessels referred to in point (a) or of their cargoes’.

6Article 148(a), (c) and (d) corresponds to Article 15(4)(a) and (b) and (5) and (8) 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, ⁴ which it replaced.

B – Finnish law

7Paragraph 71(3) of Arvonlisäverolaki 1501/1993 (Law No 1501/1993 on value added tax) of 30 December 1993, ⁵ in the version applicable at the time of the facts of the main proceedings, provides:

‘Tax is not payable on the following sales:

…

the sale of services on board a ship or an aircraft engaging in international traffic to persons travelling abroad and the sale of services to meet the direct needs of such a ship or its cargo.’

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

8A, which is a subsidiary of the company B Oy, operates in two ports, where it supplies loading and unloading, warehousing, shipping agency and freight forwarding services.

9The package of services supplied by A includes the loading and unloading of the cargoes of vessels used for navigation on the high seas and for the purposes of a commercial activity. Those services are performed by a subcontractor which invoices them to A, which invoices them on to its customer, which, depending on the circumstances, may be B Oy, the holder of the goods, the loader, the forwarding company or the shipowner. The details of the vessel and the cargo concerned are sent to the subcontractor and set out both on its invoice and on the invoice issued by A.

10Following a request by A for a tax decision on whether, under Article 71(3) of the AVL, the loading and unloading operations which it performs as a subcontractor acting on behalf of its customers were eligible for exemption from VAT, the Keskusverolautakunta, by decision of 1 October 2014, held that loading and unloading services are not to be regarded as services exempt from VAT under Paragraph 71(3) of the AVL, which transposes Article 148(a), (c) and (d) of the VAT Directive, because, according to the case-law of the Court of Justice, the supply of services to vessels operating in international traffic or to their cargoes may be exempt from VAT only if those services are provided at the end of the commercial chain, and, in the circumstances contemplated in the request, the loading and unloading services are provided at a stage earlier than the end of the commercial chain.

11A lodged an appeal against that decision before the Korkein hallinto-oikeus (Supreme Administrative Court, Finland), which decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

Is Article 148(d) of [the VAT Directive] to be interpreted as meaning the loading and unloading of cargo onto and off a vessel are supplies of services made to meet the direct needs of the cargo of vessels for the purposes of Article 148(a)?

Given the findings of the Court of Justice [of 14 September 2006, Elmeka ⁶], according to which the exemption provided for in those rules could not be extended to services supplied at an earlier stage in the commercial chain, is Article 148(d) of [the VAT Directive] to be interpreted as meaning that it applies also to the services at issue in the case in the main proceedings in which the service supplied by A’s subcontractor in the first phase of operations concerns a service which has a direct physical relationship to the cargo, which A invoices to the forwarding or transport company?

In light of the findings of the Court of Justice in paragraph 24 of the judgment [of 14 September 2006, Elmeka ⁷], according to which the exemption provided for by the rules in question apply only to services which are supplied to the shipowner, is Article 148(d) of [the VAT Directive] to be interpreted as meaning that that exemption cannot apply if the service is supplied to the cargo holder, such as the exporter or importer of the cargo concerned?’

III – My assessment

A – Preliminary observations

12As a preliminary point, it should be recalled that the Court applies the following principles to the interpretation of the VAT exemptions provided for in Article 148 of the VAT Directive.

13First, those exemptions constitute independent concepts of EU law which must, therefore, be interpreted and applied uniformly throughout the European Union. ⁸

14Secondly, those exemptions must be placed in the general context of the common system of VAT introduced by the VAT Directive. ⁹ That system is based in particular on two principles: on the one hand, the principle that each supply of goods and services effected for consideration by a taxable person is subject to VAT; ¹⁰ and, on the other hand, the principle of fiscal neutrality, which precludes economic operators carrying out the same transactions from being treated differently in relation to the levying of VAT. ¹¹

15Thirdly, the terms used to define the exemptions envisaged in Article 148 of the VAT Directive are to be interpreted strictly since those exemptions constitute exceptions to the principle that VAT is to be levied on all services supplied for consideration by a taxable person. However, that rule of interpretation does not mean that the terms used to specify those exemptions should be construed in such a way as to deprive them of their effects. ¹²

16The request for a preliminary ruling from the Korkein hallinto-oikeus (Supreme Administrative Court) must be answered in the light of those criteria for interpretation.

B – The first question referred for a preliminary ruling

17By its first question, the referring court asks, in essence, whether Article 148(d) of the VAT Directive must be interpreted as meaning that the concept of the supply of services to meet the direct needs of the cargoes of vessels includes the services of loading or unloading a ship.

18That question, which all the parties which have submitted observations to the Court are united in answering in the affirmative, does not seem to me to pose any particular difficulty.

19It is sufficient to note that Article 148(d) of the VAT Directive does not exhaustively list the services which are exempt but defines them generally on the basis of a criterion relating to the objective pursued, which must be to meet the direct needs of vessels and of their cargoes. According to the Court, the supplies exempt are ‘those which are directly connected with the needs of sea-going vessels or their cargoes, that is to say services necessary for the operation of such vessels’. ¹³

20Now, just as the activities of piloting, towing or docking a ship are typical of services supplied to meet the direct needs of vessels, the activities of loading or unloading a ship are indisputably in the nature of services supplied to meet the needs of cargoes.

21In actual fact, the uncertainty engendered by the wording of Article 148(d) of the VAT Directive has less to do with whether the activities of loading or unloading a ship are included in the concept of the supply of services to meet the direct needs of cargoes than with the meaning to be given to the requirement that activities be effected ‘to meet the direct needs of the vessels … or of their cargoes’. ¹⁴

22In that regard, it should be noted that the language versions of Article 148(d) of the VAT Directive use a different coordinating conjunction to separate the words ‘vessels referred to in point (a)’ and the words ‘of their cargoes’. Thus, while, in the German, Greek, Spanish, French, and Italian language versions in particular, that provision states that ‘the supply of services … to meet the direct needs of the vessels referred to in point (a) and of their cargoes’ is exempt, in the Bulgarian, Romanian, Finnish and English language versions in particular, the same provision provides for the exemption of ‘the supply of services … to meet the direct needs of the vessels referred to in point (a) or of their cargoes’. ¹⁵ That difference in the form of words used creates some uncertainty as to whether the exemption from VAT concerns only supplies of services which are capable of cumulatively satisfying the needs of vessels and their cargoes or applies to all supplies of services which meet the direct needs of vessels and all supplies of services which meet the needs of their cargoes.

23It is settled case-law that, since provisions of EU law must be interpreted and applied uniformly in the light of the versions existing in all EU languages, the wording used in one language version of a provision of EU law cannot serve as the sole basis for the interpretation of that provision or be given priority over the other language versions. Where there is divergence between the various language versions of an EU legislative text, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part. ¹⁶

24In the present case, it need hardly be pointed out that an interpretation which confined the exemption provided for in Article 148(d) of the VAT Directive exclusively to services that are common to vessels and to cargoes would considerably reduce the scope of that exemption by excluding the operations that are most typically carried out in port environments for the vessels referred to in point (a) of that article.

25Thus, the activities of piloting and towing, which could be regarded as supplied exclusively to meet the direct needs of the vessel, inasmuch as they meet the cargo’s needs only indirectly, would be excluded from the exemption, while the activity of loading the cargo onto the vessel could also be excluded, on the pretext that that activity is of direct benefit only to the cargo and of only indirect benefit to the ship.

26Ultimately, this would mean that only activities such as guarding and surveillance services carried out on board the ship could be regarded as meeting the direct needs of the vessel and of its cargo cumulatively and simultaneously.

27Furthermore, that interpretation is also inconsistent with the objective of Article 148 of the VAT Directive, which seeks to promote the international transport of goods and passengers by air and sea by securing for undertakings active in that sector a cash-flow advantage in the form of a dispensation from VAT prefinancing. In order to achieve that objective, the exemption, which applies to all operations involving the fuelling and provisioning of sea vessels, must likewise apply to all supplies of services to meet the direct needs of those vessels or of their cargoes.

28It is for those reasons that I propose that the Court’s answer to the first question should be that Article 148(d) of the VAT Directive must be interpreted as meaning that the concept of the supply of services to meet the direct needs of the vessels referred to in point (a) of that article or of their cargoes includes the services of loading and unloading cargo onto and off a ship.

C – The second and third questions referred for a preliminary ruling

29By its second and third questions, which must be examined together, the referring court asks, in essence, whether Article 148(d) of the VAT Directive must be interpreted as meaning that the exemption provided for in that provision covers the services of loading and unloading cargo onto and off a ship, where those services are supplied by a subcontractor acting on behalf of an economic operator which is itself linked not to the shipowner but to a freight forwarder, carrier or forwarding agent, or to the holder of the cargo concerned.

30Since the provision which is the subject of the question referred for a preliminary ruling is worded in the same terms as Article 15(8) of the Sixth Directive, which was repealed and replaced by the VAT Directive, the case-law concerning the interpretation of that article must be considered relevant to the interpretation of Article 148(d) of the VAT Directive.

31The Court’s case-law is determined by the judgments of 26 June 1990, Velker International Oil Company, ¹⁷ of 14 September 2006, Elmeka, ¹⁸ and of 3 September 2015, Fast Bunkering Klaipėda. ¹⁹

32The judgment of 26 June 1990, Velker International Oil Company, ²⁰ concerns the interpretation of Article 15(4) of the Sixth Directive, relating to operations involving the fuelling and provisioning of vessels. The company Velker International Oil Company Ltd NV, Rotterdam, ²¹ which had acquired two consignments of bunker oil, had sold them on to the company Forsythe International BV, The Hague, ²² which had had them delivered in tanks rented by it before loading them on to sea-going vessels which it did not operate itself. The question asked by the referring court was whether or not the supplies of bunker oil made by Velker to Forsythe qualified for VAT exemption. More specifically, the issue was whether the concept of the ‘supply of goods for the fuelling and provisioning of vessels’ was capable of including not only supplies of goods on board that were to be used directly for fuelling and provisioning and followed by exportation but also supplies made at previous commercial stages.

33The Court’s answer, that ‘only supplies to a vessel operator of goods to be used by that operator for fuelling and provisioning are to be regarded as supplies of goods for the fuelling and provisioning of vessels’, was based on two considerations: that operations involving the fuelling and provisioning of vessels are to be treated as exports, and that extending the exemption to stages prior to the final supply of goods would impose constraints.

34First, according to the Court, ‘just as, in the case of export transactions, the mandatory exemption provided for in Article 15(1) applies exclusively to the final supply of goods exported by the seller or on his behalf, likewise the exemption laid down in Article 15(4) applies only to the supply of goods to a vessel operator who will use those goods for fuelling and provisioning and cannot therefore be extended to the supply of those goods effected at a previous stage in the commercial chain’. ²³

35Secondly, the Court noted that ‘the extension of the exemption to stages prior to the final supply of the goods to the vessel operator would require Member States to set up systems of supervision and control in order to satisfy themselves as to the ultimate use of the goods supplied free of tax. Far from bringing about administrative simplification, such systems would amount to constraints on the Member States and the traders concerned which it would be impossible to reconcile with the “correct and straightforward application of such exemptions” prescribed in the first paragraph of Article 15 of the Sixth Directive’. ²⁴

36The judgment of 14 September 2006, Elmeka, ²⁵ applies the solution thus adopted in the case of the exemption of supplies of goods for the fuelling and provisioning of vessels to the exemption provided for in Article 15(8) of the Sixth Directive in respect of the supply of services. The case in the main proceedings concerned fuel transport operations carried out by the undertaking Elmeka NE, which was engaged in the business of operating a tanker on behalf of a company trading in petroleum products, Oceanic International Bunkering SA, which was responsible for supplying goods to the owners of the ships concerned.

37The Court held that, ‘in order to guarantee a coherent application of the Sixth Directive as a whole’, the exemption provided for in Article 15(8) of that directive ‘applies only to services supplied directly to the shipowner, and cannot therefore be extended to services supplied at an earlier stage in the commercial chain’. ²⁶ It justified its solution by transposing to the exemption applicable to supplies of services under that provision the reasoning set out in paragraphs 22 and 24 of the judgment in Velker International Oil Company, ²⁷ concerning the vessel fuelling and provisioning operations referred to in Article 15(4) of the Sixth Directive.

38The judgment of 3 September 2015, Fast Bunkering Klaipėda, ²⁸ does not call into question the principle that the aforementioned exemption cannot be extended to supplies of goods or services at earlier stages in the commercial chain, even though, for reasons relating to the analysis of the concept of the supply of goods to a person under Article 14(1) of the VAT Directive, it accepts that that exemption may be applicable to the particular circumstances of the case in the main proceedings, in which a company supplied fuel to sea-going vessels under a contract not with the operators of those vessels but with intermediaries acting in their own name.

39Taking into account the fact that the company itself loaded the fuel directly into the fuel tanks of the vessels for which it was intended and that it was only after loading that the exact amount of fuel so supplied could be determined, the Court considered that, even though, according to the procedures prescribed by the applicable national law, ownership of the fuel was transferred to the intermediaries, those intermediaries were at no time in a position to dispose of the quantities supplied, since the power to dispose of the fuel belonged to the operators of the vessels as soon as it had been loaded into the tanks, from which point those operators were usually deemed to be entitled to dispose of it in practice as if they were the owners. ²⁹

40The Court inferred from this that the supplies at issue in the main proceedings could not be classified as supplies made to intermediaries acting in their own name, but were to be regarded as supplies made directly to the operators of vessels, which may, on that basis, benefit from the exemption laid down in Article 148(a) of the VAT Directive. ³⁰ The solution thus adopted by the Court therefore amounts to recognition that supplies of fuel are exempt from VAT even where they are invoiced not to the vessel operators themselves but to intermediaries.

41I share the view expressed by the referring court, which considers that the case-law does not provide a clear answer to the question of whether the aforementioned exemption applies to the services of loading and unloading cargo onto and off a vessel solely by virtue of the fact that those services are by their very nature directly linked to the needs of the cargo, irrespective of the person supplying or receiving them, or whether, on the contrary, those services may be exempt only when invoiced to the operator situated at the final stage of the commercial chain.

42In order to answer that question, it is necessary to identify the rationale behind the exemption provided for in Article 148(d) of the VAT Directive. There are, after all, two different ways of understanding that provision as interpreted by the Court, which has ruled that that exemption applies only ‘to the final supply of the goods to the vessel operator’ ³¹ and to the ‘supply of services directly to the shipowner for the direct needs of sea-going vessels’. ³²

43According to the first interpretation, which is that adopted by A and the Netherlands, Polish and Finnish Governments, the only criterion for exemption under Article 148(d) of the VAT Directive is the nature of the supply of services, it being irrelevant whether that supply is performed by a subcontractor or whether it is invoiced to the holder of the cargo or to a third party, rather than being directly invoiced to the shipowner. According to the Polish Government, that interpretation is perfectly consistent with the Court’s case-law, taking into account the differences between the previously settled cases, which concerned supplies of fuel to vessels and the related transport services, and the present case, which concerns the services of loading and unloading cargo onto and off a vessel.

44According to the second interpretation, supported by the Greek Government and the European Commission, the services of loading and unloading cargo may be exempt from VAT only where they are provided at the end of the commercial chain and are supplied directly to the shipowner. To that effect, the Greek Government argues that those services may be exempt only on condition that the cargo contains goods necessary to the operation and maintenance of the vessel. In its submission, the only services eligible for exemption are therefore those which are linked to the vessel itself and which are supplied to the shipowner itself. In support of its interpretation to the effect that only the final transaction, that is to say only the service supplied to the shipowner, may be exempt under Article 148(d) of the VAT Directive, the Commission states that that interpretation does not penalise any link in the commercial chain since the person who performs the transaction qualifies for the right to deduct. Thus, where subcontractors are used, the services supplied to the shipowner by the principal undertaking may be exempt under Article 148(d) of the VAT Directive, whereas the services supplied to the principal undertaking by the subcontractor cannot be exempt, since they are not provided at the final stage of the commercial chain, although this does not prevent the principal undertaking from subsequently deducting the VAT it paid to its subcontractor or having it refunded. According to the Commission, the interpretation proposed is alone consistent with the Court’s case-law and the principle that the exemptions referred to in Article 148 of the VAT Directive are to be treated as exports. It also helps ensure that the application of the exemption is straightforward, whereas extending that exemption to earlier stages of the commercial chain creates practical difficulties.

45There are sound arguments for both of those interpretations.

46To my mind, there are two main reasons that may be put forward in support of the interpretation to the effect that the exemption is applicable only to services supplied directly to the shipowner.

47The first reason concerns the treatment of supplies of services within the meaning of Article 148(d) of the VAT Directive as export transactions, for the purposes of which the mandatory exemption applies exclusively to final supplies of goods exported by the seller or on its behalf. Supplies effected by a subcontractor and invoiced to a principal undertaking which invoices them on to a customer other than the shipowner, however, take place at earlier stages in the commercial chain and for that reason cannot be compared with an export transaction.

48The second concerns the objective pursued by Article 148 of the VAT Directive, which, as I said earlier, is to promote the international transport of goods and passengers by air and sea by securing for undertakings within that sector a cash-flow advantage in the form of a dispensation from VAT prefinancing. ³³ From that point of view, it seems logical to limit the exemption exclusively to undertakings which actually engage in the international transport of goods by air and sea, without extending it to economic operators performing different transactions, albeit ones directly linked to transport. The exemption must therefore depend on the status of the person to which the supply of services is invoiced.

49In my view, however, there are other more conclusive reasons that can be found to support the second interpretation, to the effect that it is important to have regard to the nature of the transaction rather than to make the application of the exemption subject to the condition that the transaction be performed by the supplier itself acting on the direct behalf of the shipowner.

50The first reason is drawn from the wording of Article 148(d) of the VAT Directive itself, which defines exempt transactions on the basis of the nature of the services supplied rather than on the basis of the supplier or recipient of the service, to neither of which that provision makes any reference. The details of the persons concerned are therefore, in principle, of no relevance for the purposes of determining which transactions are exempt.

51The second reason is drawn from the principle of fiscal neutrality inherent in the common system of VAT, to the effect that economic operators performing the same transactions must not be treated differently in relation to the levying of VAT. To my mind, that principle precludes an economic operator supplying a service that meets the direct needs of vessels or of their cargoes from being treated differently according to whether it supplies that service directly or indirectly and according to the status of the person to which it supplies that service.

52The third reason, which to my mind is key, is that the Court’s case-law to the effect that, in a commercial chain, the exemption from VAT must be limited to the final link in that chain cannot, in my opinion, be transposed to the specific situation of performance of a single supply of services directly linked to the needs of the vessel or of its cargo. The cases which gave rise to the judgments of 26 June 1990, Velker International Oil Company, ³⁴ and of 14 September 2006, Elmeka, ³⁵ both concerned situations in which the operation of fuelling and provisioning the vessel was preceded by a separate operation, that is to say the fact, in the first case, that the bunker oil was delivered by tank before being loaded onto the vessels and, in the second case, that the fuel was transported before being delivered to the shipowners.

53In the case in the main proceedings, on the other hand, as A and the Polish Government rightly argue, a single supply of loading and unloading services directly linked to the needs of the vessel and of its cargo was performed and invoiced by the subcontractor before being invoiced on by A to its customer.

54The Court justified the refusal to extend the exemption to stages prior to the final supply of goods to the vessel operator by reference to the risk of a change to the ultimate use of the goods or services at issue and the fact that, as a result, Member States would be required to set up systems of supervision and control in order to satisfy themselves as to their ultimate use. Such systems would amount to constraints on the Member States and operators concerned which it would be impossible to reconcile with the correct and straightforward application of the exemptions laid down in Article 131 of the VAT Directive. ³⁶

55However, that risk arises from the performance of operations that precede the actual fuelling and provisioning of the vessel and have the effect of introducing into the commercial chain opportunities for changing the ultimate use of the petroleum products. No such risk therefore exists in the case of a cargo-loading and -unloading service supplied directly on board the vessel.

56It is true that, at the hearing, the Commission contended that there was a further risk that the loading and unloading operation might be performed on a vessel which does not meet the criteria set out in Article 148(a) of the VAT Directive, given that not all Member States have a computerised register for verifying the details of the vessel being loaded or unloaded. While there is no denying the existence of a potential risk that the cargo might be loaded onto or unloaded from a vessel which, among other things, is not used for navigation on the high seas, it should be noted that that risk is not unique to an operation performed by a subcontractor and invoiced on by the principal undertaking to the customer. It is, after all, also conceivable that an operation directly invoiced to the shipowner by the supplier might actually relate to a ship other than those referred to in Article 148(a) of the VAT Directive. Logically, therefore, the general risk alleged by the Commission would necessarily have the effect of calling into question the very principle of an exemption for the operations set out in Article 148 of that directive.

57In those circumstances, I take the view that the Court’s case-law relating to operations prior to the fuelling and provisioning of a vessel cannot be transposed to the supply of services to meet the direct needs of the cargo. In my opinion, the exemption provided for in Article 148(d) of the VAT Directive must be applied by reference to the nature of those services rather than by reference to the person supplying or receiving them.

IV – Conclusion

Conclusion

58Consequently, I propose that the Court’s answer to the questions referred for a preliminary ruling by the Korkein hallinto-oikeus (Supreme Administrative Court, Finland) should be as follows:

Article 148(d) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the concept of the supply of services to meet the direct needs of the vessels referred to in Article 148(a) of that directive or of their cargoes includes the services of loading and unloading cargo onto and off a ship.

Article 148(d) of the VAT Directive must be interpreted as meaning that the exemption provided for in that provision includes the services of loading and unloading cargo onto and off a ship, where those services are supplied by a subcontractor acting on behalf of an economic operator which is itself linked not to the shipowner but to a freight forwarder, carrier or forwarding agent, or to the holder of the cargo concerned.

¹ Original language: French.

² OJ 2006 L 347, p. 1, ‘the VAT Directive’.

³ ‘A’.

⁴ OJ 1977 L 145, p. 1 (‘the Sixth Directive’).

⁵ ‘AVL’.

⁶ C‑181/04 to C‑183/04, EU:C:2006:563.

⁷ C‑181/04 to C‑183/04, EU:C:2006:563.

⁸ See, in particular, the judgment of 3 September 2015, Fast Bunkering Klaipėda (C‑526/13, EU:C:2015:536, paragraph 41 and the case-law cited).

⁹ See, in particular, the judgment of 19 July 2012, A (C‑33/11, EU:C:2012:482, paragraph 31 and the case-law cited).

¹⁰ See, in particular, the judgment of 19 July 2012, A (C‑33/11, EU:C:2012:482, paragraph 48 and the case-law cited).

¹¹ See, in particular, the judgment of 19 July 2012, A (C‑33/11, EU:C:2012:482, paragraphs 32, 33 and 48 and the case-law cited).

¹² See, in particular, the judgment of 19 July 2012, A (C‑33/11, EU:C:2012:482, paragraph 49 and the case-law cited).

¹³ See the judgment of 4 July 1985, Berkholz (168/84, EU:C:1985:299, paragraph 21, which excludes from the category of exempt supplies the installation of gaming machines, which ‘have no intrinsic connection with navigational requirements’).

¹⁴ My italics.

¹⁵ My italics.

¹⁶ See to that effect, in particular, the judgment of 28 July 2016, Edilizia Mastrodonato (C‑147/15, EU:C:2016:606, paragraph 29 and the case-law cited).

¹⁷ C‑185/89, EU:C:1990:262.

¹⁸ C‑181/04 to C‑183/04, EU:C:2006:563.

¹⁹ C‑526/13, EU:C:2015:536.

²⁰ C‑185/89, EU:C:1990:262.

²¹ ‘Velker’.

²² ‘Forsythe’.

²³ Judgment of 26 June 1990, Velker International Oil Company (C‑185/89, EU:C:1990:262, paragraph 22).

²⁴ Judgment of 26 June 1990, Velker International Oil Company (C‑185/89, EU:C:1990:262, paragraph 24).

²⁵ C‑181/04 to C‑183/04, EU:C:2006:563.

²⁶ Judgment of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563, paragraph 24).

²⁷ C‑185/89, EU:C:1990:262.

²⁸ C‑526/13, EU:C:2015:536.

²⁹ Judgment of 3 September 2015, Fast Bunkering Klaipėda (C‑526/13, EU:C:2015:536, paragraph 47).

³⁰ Judgment of 3 September 2015, Fast Bunkering Klaipėda (C‑526/13, EU:C:2015:536, paragraph 52).

³¹ Judgment of 26 June 1990, Velker International Oil Company (C‑185/89, EU:C:1990:262, paragraph 24).

³² Judgment of 14 September 2006, Elmeka (C‑181/04 to C‑183/04, EU:C:2006:563, paragraph 25).

³³ See point 27 of this Opinion.

³⁴ C‑185/89, EU:C:1990:262.

³⁵ C‑181/04 to C‑183/04, EU:C:2006:563.

³⁶ See, in particular, the judgment of 3 September 2015, Fast Bunkering Klaipėda (C‑526/13, EU:C:2015:536, paragraph 28).