C-428/02 Fonden Marselisborg Lystbådehavn

JUDGMENT OF THE COURT (Third Chamber)

Legal context and the dispute

3 March 2005 *

In Case C-428/02, REFERENCE for a preliminary ruling under Article 234 EC from the Vestre Landsret (Denmark), made by order of 15 November 2002, received November 2002, in the proceedings

Fonden Marselisborg Lystbådehavn

v

Skatteministeriet,

and

Skatteministeriet

v

Fonden Marselisborg Lystbådehavn,

* Language of the case: Danish.

at the Court on 26 THE COURT (Third Chamber),

composed of A. Rosas, President of the Chambre, Α. Borg Barthet, J.-P. Puissochet, J. Malenovský and U. Lõhmus (Rapporteur), Judges,

Advocate General: J. Kokott, Registrar: H. von Holstein, Deputy Registrar,

having regard to the written proceedings and further to the hearing on 23 September 2004,

after considering the observations submitted on behalf of:

— Fonden Marselisborg Lystbådehavn, by L. Henriksen and M. Andersen, advokaterne,

— the Skatteministeriet and the Danish Government, by J. Molde, acting as Agent, and P. Biering, advokat,

— the Greek Government, by M. Apessos and K. Georgiadis, acting as Agents,

— the Commission of the European Communities, by E. Traversa and T. Fich, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 14 October 2004, FONDEN MARSELISBORG LYSTBADEHAVN

gives the following

Judgment

1This reference for a preliminary ruling concerns the interpretation of Article 13B(b) 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 (OJ 1977 L 145, p. 1), as amended by Directive 92/111/EEC of 14 December 1992 (OJ 1992 L 384, p. 47, 'the Sixth Directive').

2That reference was made in the course of two sets of proceedings between Fonden Marselisborg Lystbådehavn (the Marselisborg Pleasure Boat Port Trust, 'FML') and the Skatteministeriet (Ministry of Fiscal Affairs) and the latter against FML concerning value added tax ('VAT') on the letting of mooring berths for boats in a pleasure boat port complex and of storage sites for housing pleasure boats during the winter.

Legal background

Community law

3According to the 11th recital in the preamble one of the purposes of the Sixth Directive is to draw up a common list of VAT exemptions so that the Communities' own resources may be collected in a uniform manner in all the Member States.

4Article 2(1) of the Sixth Directive makes 'the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such' subject to VAT.

5Article 4(1) and (2) of the Sixth Directive provides:

'1. Taxable person shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity.

2. The economic activities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity.'

6Article 13B(b) of the Sixth Directive, which appears in Title X, entitled 'Exemptions', provides:

'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:

(b) the leasing or letting of immovable property excluding:

1. the provision of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites; ...

2. the letting of premises and sites for parking vehicles;

3. lettings of permanently installed equipment and machinery;

4. hire of safes.

Member States may apply further exclusions to the scope of this exemption;

National legislation

7Article 13(1), point 8, of the Momsloven (Danish Law on VAT) provides:

The following goods and services are exempt from VAT:

(8) the administration, letting and leasing of immovable property, including the supply of gas, water, electricity and heating as part of the letting or leasing. The exemption does not, however, cover the letting of rooms in hotels and similar establishments, the letting of rooms in businesses that let for periods of less than one month, the letting of camp sites, parking areas and advertising spaces, or the hire of safes.'

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

8FML is responsible for the management of the pleasure boat port of Marselisborg. That independent institution lets water-based mooring berths and land sites for the winter storage of boats.

9Mooring berths may be let on a yearly or monthly basis or for a shorter period of one to several days.

10Where a mooring berth is let on an annual basis the lessee acquires the right to use a specific and identifiable mooring berth and is entitled to use the common facilities at the port, such as toilets and washing facilities. The mooring berths are adjusted to fit the size of the boats. Each one is individually numbered and is marked with fencing, y-beams or pontoon bridging with y-beams. If the lessee of a berth does not wish to use it for a period exceeding 24 hours, it is made available to visitors without reimbursement.

11Long-term lessees of mooring berths with a right to a land site must pay an annual site fee and must lodge a deposit which is calculated, inter alia, according to the size of the boat. On the other hand, no deposit is required for letting a mooring berth without a right to a land site. However, the annual rent is higher in this case.

12Where a mooring berth is let on a monthly basis a monthly hire charge is payable but no deposit is required. The lessee is, in principle, guaranteed a specific numbered mooring berth adapted to the size of his boat.

13Short-term letting is provided for visitors who receive only mooring berths in the port for one or several days. No deposit is required for this type of letting.

14As regards the letting of storage sites, the user is able to acquire the right to use a particular site for the winter storage of his boat. That site consists of a cradle, that is, a structure on which the boat is placed, which is numbered, to which the lessee has free access in order to tend and prepare his boat.

15The dispute in the main proceedings results from the fact that, following an inquiry in 1999 by FML to the Regional Tax Authority, Århus (Denmark), the latter took the view that the income from letting mooring berths was subject to VAT. FML contested that decision before the Landsskatteret (Denmark).

16In its order of 6 December 2000, the Landsskatteret held that the letting of water-based mooring berths could not benefit from the VAT exemption provided for by Article 13(1), point 8, of the Momsloven, on the ground that that activity could not be regarded as a letting of immovable property. It held that a boat owner does not rent a specific and identifiable area or parts of immovable property but merely acquires a right of use, which consists of having a mooring berth for his boat in the port.

17On the other hand, as regards winter storage of boats, the Landsskatteret held that that activity is not subject to VAT because it may be treated as a 'letting of immovable property' for the purposes of Article 13(1), point 8, of the Momsloven. It held that a boat owner rents, for a price determined by the surface occupied, a specific and identifiable area to which he has free access during the winter. That letting is not covered by the exemption concerning 'the letting of premises and sites for parking vehicles', because boats are not covered by the term 'vehicles' within the meaning of Article 13B(b)(2) of the Sixth Directive.

18Both FML and the Skatteministeriet brought proceedings to challenge the Landsskatterets order before the Vestre Landsret. Since the latter takes the view that the resolution of the dispute before it requires the interpretation of Article 13B (b) of the Sixth Directive, it has decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

'1. Must Article 13B(b) of the Sixth VAT Directive ... be construed as meaning that the term 'letting of immovable property' includes the letting of a boat site FONDEN MARSELISBORG LYSTBADEHAVN

consisting of a section of a land-based port area and of a defined and identifiable water-based area?

2. Must Article 13B(b)(2) of the Sixth Directive be construed as meaning that the term "vehicles" includes boats?'

The first question

19By its first question the national court asks, essentially, whether Article 13B(b) of the Sixth Directive must be interpreted as meaning that the concept of letting of immovable property includes the letting of water-based mooring berths and land storage sites for boats within the port area.

Observations submitted to the Court

20FML asserts that its activity of letting mooring berths and winter storage sites for boats fulfils the conditions laid down by the case-law of the Court for letting of immovable property within the meaning of Article 13B(b) of the Sixth Directive. Its activities give rise to the payment of rent, the site is let for a fixed contractual period and the letting involves the transfer to the lessee of rights to use the property and to exclude third parties from it.

21As regards the nature of the object let, FML argues that the port installations constitute fixed structures which cannot easily be dismantled or moved.

22The Danish Government takes the view that the letting of mooring berths cannot be regarded as the letting of immovable property within the meaning of Article 13B(b) of the Sixth Directive, because the exemptions provided for by that article must be interpreted strictly.

23It argues that even if the port installations may be treated as 'immovable', the decisive element in defining the concept of 'immovable property' for the purposes of the Sixth Directive, the use of those installations for mooring boats is only an ancillary service which for tax purposes must be treated in the same way as the main service, which is to attribute a mooring berth in the port to boat owners. The latter fails to fulfil the requirements for falling within the definition of immovable property.

24On the other hand, letting a clearly defined land site to a boat owner for winter storage should be treated as the letting of immovable property within the meaning of the Sixth Directive.

25The Greek Government supports the Danish Government's view that the definition of 'letting immovable property' does not cover a defined and identifiable water-based mooring berth, but does cover letting land sites for the winter storage of boats.

26The Commission of the European Communities submits that it is clear from the Court's very broad interpretation of the terms 'letting and leasing of immovable property' that the letting of parts of port land for the winter storage of boats undeniably constitutes a letting of immovable property within the meaning of the Sixth Directive. Furthermore, the letting of a water-based mooring berth cannot be treated differently depending on technical features, such as whether a boat is moored to a buoy or to pontoon bridging, rather than being anchored to the sea bed or moored to a mooring plate.

Grounds

Findings of the Court

27According to settled case-law, the exemptions provided for in Article 13 of the Sixth Directive have their own independent meaning in Community law which must therefore be given a Community definition (see Case C-358/97 Commission v Ireland [2000] ECR 1-6301, paragraph 51; Case C-315/00 Maierhofer [2003] ECR I-563, paragraph 25; Case C-275/01 Sinclair Collis [2003] ECR I-5965, paragraph 22; and Case C-284/03 Temco Europe [2004] ECR I-11237, paragraph 16) .

28In the absence of a definition of 'letting of immovable property' in Article 13B(b) of the Sixth Directive, that provision must therefore be interpreted in the light of the context in which it is used and the scheme of the Directive, having particular regard to the underlying purpose of the exemption which it establishes (see, to that effect, Temco Europe, paragraph 18).

29In that connection, given that the exemptions referred to in Article 13 of the Sixth Directive are exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person, they should be interpreted strictly (see, in particular, Commission ν Ireland, paragraph 52; Case C-359/97 Commission ν United Kingdom [2000] ECR1-6355, paragraph 64, and Sinclair Collis, paragraph 23).

30In numerous judgments the Court has defined the letting of immovable property, within the meaning of Article 13B(b) of the Sixth Directive, as the landlord assigning to the tenant, in return for rent and for an agreed period, the right to occupy his property and to exclude other persons from it (see, to that effect, Commission ν Ireland, paragraphs 52 and 57; Case C-409/98 Mirror Group [2001] ECR 1-7175, paragraph 31; Case C-326/99 'Goed Wonen' [2001] ECR I-6831, paragraph 55, and Temco Europe, paragraph 19).

31In the main proceedings, it is common ground that the relationship between FML and the users of the land sites, who have exclusive use of the sites assigned to them for a fixed period, fall within the definition of letting in that provision. The same is true as regards the relationship between the FML and users of water-based mooring berths, even occasional users, as a mooring berth may be temporarily occupied by another boat when the lessee is not using it for his own. Since such occasional use does not cause harm to the lessee, it cannot be regarded as altering the relationship between him and the port management.

32Therefore in order to answer the first question it remains to be established whether land- and water-based moorings for boats must be regarded as immovable property. FONDEN MARSELISBORG LYSTBADEHAVN

33As regards the land sites, it must be observed that the ground used for the storage of boats is immovable property.

34In the case of water-based mooring berths, the order for reference indicates that FML is the owner of the port land and the port basin. The fact that that land is partly under water does not prevent it from being categorised as immovable property that can be leased or let. As the owner FML may rent out all the port land, including specified parts of it. The letting does not, however, concern a particular quantity of water, but a specific part of the port basin. That water-covered area is clearly delimited and cannot be moved.

35Consequently, as the Advocate General pointed out in paragraph 32 of her Opinion, even on a narrow interpretation of Article 13B(b) of the Sixth Directive a mooring berth in a port basin fulfils the definition of immovable property within the meaning of that article.

36The answer to the first question must therefore be that Article 13B(b) of the Sixth Directive must be interpreted as meaning that the concept of letting of immovable property includes the letting of both water-based mooring berths for boats and land sites for storage of boats on port land.

The second question

37By its second question the national court asks, essentially, whether the definition of 'vehicles' in Article 13B(b)(2) of the Sixth Directive includes boats.

Observations submitted to the Court

38FML asserts that it is clear from Article 15(2), 28a(2)(a) and 28n(4)(b) and (c) of the Sixth Directive that the Community legislature draws a distinction between the terms 'means of transport' and 'vehicles'. Where a provision covers all means of transport, that is to say aircraft, motor vehicles, boats, etc., the expression 'means of transport' is used. On the other hand, the term 'vehicles' is used only for land-based means of transport on wheels. The definition of 'vehicles' as referred to in Article 13B(b) of the Sixth Directive covers, therefore, only means of land-based transport, and therefore the answer to the second question must be in the negative.

39The Danish and Greek Governments take the view that 'vehicles' must not be interpreted strictly. The definition should therefore cover anything which may transport a person from one point to another, including boats.

40The Commission also submits that, notwithstanding the different terminology in the various language versions of Article 13B(b)(2) of the Sixth Directive, the word 'vehicles' is in fact used consistently throughout the Directive and covers means of transport in the broad sense, including boats. A contrary interpretation has illogical consequences which are incompatible with the principle of fiscal neutrality. FONDEN MARSELISBORG LYSTBADEHAVN

Findings of the Court

41The words used in the various language versions of Article 13B(b)(2) to designate 'vehicles' are not consistent. As the Commission rightly stated, a number of language versions, among which are the French, English, Italian, Spanish, Portuguese, German and Finnish versions, encompass means of transport in general in that definition, including aircraft and boats. On the other hand, other versions, such as the Danish, Swedish, Dutch and Greek versions, have selected a more precise term with a more limited meaning which serves to designate principally 'land-based means of transport'. More particularly, the Danish word 'kjøretøjer' refers to land-based transport on wheels.

42In that connection it must be recalled that, according to settled case-law, where there is a difference between the language versions the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms a part (see, in particular, Case C-372/88 Cricket St Thomas [1990] ECR I-1345, paragraph 19, and Case C-384/98 D [2000] ECR I-6795, paragraph 16).

43As regards the letting of premises and sites for parking vehicles, Article 13B(b)(2) of the Sixth Directive introduces an exception to the exemption laid down for the leasing and letting of immovable property. It thus makes the transactions to which it refers subject to the general rule laid down in that directive, namely that VAT is to be charged on all taxable transactions, except in the case of derogations expressly provided for. That provision cannot therefore be interpreted strictly (see Case C-346/95 Blasi [1998] ECR I-481, paragraph 19).

44Therefore, the term 'vehicles' used in that provision must be interpreted as covering all means of transport, including boats.

45Letting mooring berths for boats is not limited solely to the right to privately occupy the surface of the water, but also involves making available various port equipment for mooring the boat, landing-stages for the crew and the use of various sanitary or other facilities. As the Advocate General points out in paragraph 51 of her Opinion, none of the reasons, including the social ones, that originally justified allowing the exemption from VAT for immovable property may be applied to the letting of mooring berths for pleasure boats in the circumstances in the main proceedings.

46In those circumstances, having regard to the objectives of Article 13B(b) of the Sixth Directive, point 2 of that provision, which excludes the letting of premises and sites for parking vehicles from the exemption from VAT, must be interpreted as meaning that it is generally applicable to the letting of premises and sites for parking all means of transport, including boats.

47In the light of the foregoing, the answer to the second question must be that Article 13B(b)(2) of the Sixth Directive is to be interpreted as meaning that the definition of Vehicles' includes boats.

Costs

48Since 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 (Third Chamber) rules as follows:

1. Article 13B(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 92/111/EEC of 14 December 1992, must be interpreted as meaning that the concept of letting of immovable property includes the letting of both water-based mooring berths for pleasure boats and land sites for storage of boats on port land.

2. Article 13B(b)(2) of Sixth Directive 77/388, as amended by Directive 92/111, must be interpreted as meaning that the definition of 'vehicles' includes boats.

[Signatures]

FONDEN MARSELISBORG LYSTBADEHAVN

OPINION OF ADVOCATE GENERAL KOKOTT delivered on 14 October 2004 1

I — Introduction

1This reference for a preliminary ruling made by the Vestre Landsret (Denmark) concerns the treatment for VAT purposes of the letting of mooring berths for boats in a pleasure boat port complex and of storage sites for housing pleasure boats during the winter. Under Article 13B(b) of the Sixth Council Directive 77/388/EEC of 17 March 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (hereinafter 'the Sixth Directive') 2 these services could be exempt from value added tax inasmuch as they relate to the leasing of immovable property. However, the tax exemption would not apply if the mooring berths for boats and the storage sites were to be categorised as 'premises and sites for parking vehicles').

1 — Original language: German.

2 - OJ 1977 L 145, p. 1.

II — Legal background

A — Community law

2Under Article 2(1) of the Sixth Directive the supply of goods or services effected for consideration within the territory of a country is subject, in principle, to value added tax. The second sentence of Article 4 (2) of the Sixth Directive provides that 'the exploitation of tangible ... property for the purpose of obtaining income therefrom on a continuing basis' is also to be considered an economic activity that is subject to value added tax.

3Under Article 13B(b) of the Sixth Directive the following are exempt from value added tax under certain conditions:

'the leasing or letting of immovable property excluding:

1. the provision of accommodation, as defined in the laws of the Member States, in the hotel sector or in sectors with a similar function, including the provision of accommodation in holiday camps or on sites developed for use as camping sites;

2. the letting of premises and sites for parking vehicles;

3. lettings of permanently installed equipment and machinery;

4. hire of safes.

Member States may apply further exclusions to the scope of this exemption'.

Β — Danish law

4Paragraph 13(1)(8) of the Danish law on VAT provides exemption for the following goods and services;

'the administration, letting and leasing of immovable property, including the supply of gas, water, electricity and heating as part of the letting or leasing. The exemption does not, however, cover the letting of rooms in hotels and similar establishments, the letting of rooms in businesses that let for periods of less than one month, the letting of camp sites, parking areas and advertising spaces, or the hire of safes.'

5Further guidance is given in Point D.11.8 of the 2001 VAT Guide as regards administrative practice in Denmark:

'The letting by sailing clubs of mooring berths, land storage sites and port and slipway sites is subject to VAT, even though such letting is made to club members only.

VAT is accordingly payable on site rent, including any fees or deposits charged to fixed lessees, together with port dues charged when visiting mariners use the port.'

6Under Paragraph 39(5) of the VAT Law tax on the installation, repair and mainte-FONDEN MARSELISBORG LYSTBADEHAVN nance of port complexes other than buildings can be deducted as input tax.

III — The facts, questions referred for a preliminary ruling and the main proceedings

7Fonden Marselisborg Lystbådehavn (the Marselisborg Pleasure Boat Port Trust, hereinafter the 'FML') is a foundation that operates and maintains a pleasure boat port. FML lets out mooring berths for boats within the port and storage sites on port land for the winter storage of boats. These services are offered either jointly or separately. Mooring berths can be rented on a long-term basis or for shorter periods, in other words on a monthly or daily basis.

8If a mooring berth and storage site are let together on a long-term basis the lessee has to pay a deposit in addition to the hire charge. The amount of both payments is determined inter alia according to the size of the site required for the particular boat concerned.

9In consideration of such payment the boat owner acquires the right to use a specific fixed mooring berth alongside a jetty or landing-stage, adjusted to fit the size of the boat, for a period of one year. If a berth holder does not wish to use his mooring berth for a period exceeding 24 hours the berth may be made available to visitors without reimbursement. The lessee also receives a storage site, which consists of a numbered stand situated within a special area of port property on which he can store his vessel outside the sailing season and to which he has free access. Finally, the lessee is entitled to use the communal facilities at the port, such as toilets and washing facilities.

10Boat owners who just rent a mooring berth, whether in the long term or on a monthly basis, do not need to pay a deposit. A greater hire charge is payable instead. They are also allocated a fixed berth for the period of the letting agreement. Visiting mariners who are only at the port for one day or for several days at a time are allocated vacant berths.

11The aforementioned land storage sites can also be rented separately from water-based mooring berths.

12The tax authority informed FML that its activities were subject to VAT in their entirety. On FML's appeal against that decision the Landsskatteret (court of first instance) upheld the tax authority's view with regard to the mooring berths. The letting of those berths did not come within the exemption for the leasing of immovable property. However, the court did consider that the letting of land storage sites was tax-exempt. Both the FML and the Skatteministeriet (Ministry of Fiscal Affairs) appealed against that decision to the Vestre Landsret, which made an order of 22 November 2002 referring the following questions to the Court of Justice for a preliminary ruling under Article 234 EC:

'(1) Must Article 13B(b) of the Sixth VAT Directive (Council Directive 77/388) be construed as meaning that the term "leasing and letting of immovable prop erty" includes the letting of a boat site consisting of a section of a land-based port area and of a defined and identifiable water-based area?

(2) Must Article 13B(b)(2) of the Sixth VAT Directive (Council Directive 77/388) be construed as meaning that the term "køretøjer" (vehicles) includes boats?'

13FML, the Danish and the Greek Governments and the Commission have submitted observations in the proceedings before the Court. With the exception of FML all of the parties are of the opinion that the letting of mooring berths and storage sites is subject to VAT. Whilst the Member States take the view that the water-based mooring berths, in any event, do not constitute immovable property within the meaning of the Directive, the Commission takes a different view on that point. The Commission and the Governments agree that the exclusion from VAT exemption for premises and sites for parking vehicles should apply. In the opinion of FML the provision governing premises and sites for parking vehicles should not apply to premises and sites for boats.

IV — Legal appraisal

14The questions referred for a preliminary ruling seek an interpretation of the provision allowing exemption from VAT for the leasing of immovable property in Article 13B(b). The aim of the first question is therefore to determine whether a mooring berth for boats within a port and a land storage site for boats should be considered immovable property. In order to answer the second question it is necessary to establish whether the exclusion from exemption for the letting of premises and sites for parking vehicles should also apply to such sites for boats.

FONDEN MARSELISBORG LYSTBÅDEHAVN

A — Preliminary observations

15Before looking in more detail at the questions referred for a preliminary ruling it should be borne in mind that the exemptions provided for by Article 13 of the Sixth Directive have their own independent meaning in Community law and that they must therefore be given a Community definition. 3

16The following principles of interpretation of the provisions at issue in the present case are to be derived from the structure of the Sixth Directive: since the tax exemptions constitute exceptions to the general rule that VAT is to be levied on all services supplied for consideration by a taxable person, the concept of rent on immovable property is to 4 be interpreted strictly. As a result of the exclusion from tax exemption provided in Article 13B(b)(2) of the Sixth Directive in relation to premises and sites for parking vehicles the turnover in question again becomes subject to the general rule laid down in this directive; that provision cannot 5 therefore be interpreted strictly.

3 - Case C-358/97 Commission v Ireland |2000] ECR I-6301, paragraph 51, Case C-315/00 Maierhofer |2003] ECR 1-563, paragraph 25, and Case C-275/01 Sinclair Collis (2003) ECR 1- 5965, paragraph 22.

4 — Commission v Ireland (cited in footnote 3, paragraph 52), Case C-150/99 Stockholm Lindopark [2001] ECR I-493, paragraph 25, and Sinclair Collis (cited in footnote 3, paragraph 23). 5 - Case C-346/95 Blast [1998] ECR I-181, paragraph 19.

17An interpretation of the directive might not have been required, moreover, if Denmark had made use of the opportunity afforded to it of applying further exclusions to the scope of that exemption in addition to those instances stated in Article 13B(b)(l) to (4) of the Sixth Directive. The Sixth Directive affords the Member States wide discretion in that respect, as the Commission quite rightly argued, citing the judgment in Far. 6 Denmark could therefore expressly provide for the letting of mooring berths for boats, in particular, to be subject to VAT like the letting of premises and sites for parking.

18However, if a Member State wishes to exercise that right it must do so by enacting the necessary legislation on VAT. It is not sufficient for the national provisions which are largely in line with the Sixth Directive to be supplemented by administrative practice or by administrative rules which are binding only at national level, with the result that further sets of circumstances give rise to 7 VAT liability.

6 - Case C-12/98 Far [2000] ECR I-527. See also Case C-326/99 Goed Wonen [ 2 0 0 1] ECR I-6831, paragraph 45.

7 — See the Opinion delivered by Advocate General Jacobs in Materhofer, cited in footnote 3. paragraphs 27 and 28, and in Case 173/88 Henriksen [1989] ECR I-2763. I-2770. paragraph 22.

19The administrative practice set out in 8 the 2001 VAT guide, according to which mooring berths for boats are to be deemed subject to VAT, cannot therefore be considered a wider national exclusion from the scope of the exemption afforded to the leasing and letting of immovable property.

20Under the national legislation taxable persons are entitled to deduct input tax on charges relating to the installation, repair and operation of port facilities provided that those charges do not relate to buildings. This indicates that the Danish legislature attributes such charges to a taxable activity. However, even an indirect reference such as this does not constitute an unequivocal further exclusion from tax exemption for the leasing of immovable property.

21In the absence of a specific rule for the tax treatment of the leasing of mooring berths for boats under Danish VAT law it is necessary to establish whether such an activity should be considered to be the leasing of immovable property and, if so, whether it should also be considered to be the letting of premises and sites for parking vehicles within the meaning of the Sixth Directive.

8 — See above, paragraph 5.

Β — The leasing of immovable property (first question)

22Article 13B(b) of the Sixth Directive does not define the term 'leasing of immovable property', nor does it refer to relevant definitions adopted in the legal orders of the Member States. 9

23However, it is settled case-law, firstly, that the fundamental characteristic of a letting of immovable property for the purposes of Article 13B(b) of the Sixth Directive lies in conferring on the person concerned, for an agreed period and for payment, the right to occupy property as if that person were the owner and to exclude any other person from enjoyment of such right. 10

24Secondly, in order to determine the nature of a taxable transaction, regard must be had to all the circumstances in which the 1 transaction in question takes place. 1

9 — See 'Goed Wonen' (cited in footnote 6, paragraph 44) and Sinclair Collis (cited in footnote 3, paragraph 24).

10 — See 'Goed Wonen' (cited in footnote 6, paragraph 55), Sinclair Collis (cited in footnote 3, paragraph 25) and Case C-108/99 Cantor Fitzgerald International [2001] ECR I-7257, paragraph 21.

11 - Case C-231/94 Faaborg-Gelting Linien [1996] ECR 1-2395, paragraph 12, Stockholm Lindopark (cited in footnote 4, paragraph 26) and Sinclair Collis (cited in footnote 3, paragraph 26).

FONDEN MARSELISBORG LYSTBÅDEHAVN

25The services offered by FML comprise both the letting of mooring berths within the port and of land storage sites for housing boats during the winter. Although these services can also be offered together, the question of whether this constitutes the leasing of immovable property must be examined separately in relation to berths and sites.

26The fact that a single price is charged for the combined renting of mooring berths and 12 storage sites is not decisive.

27What is crucial, however, is the fact that a mooring berth for boats and a land storage site can each be leased separately from each other, so that these are indeed two distinct and independent principal services and not a single integrated service from an economic 13 point of view. Nor does one form of letting of a boat site constitute the principal service and the other the ancillary service which shares the tax treatment of the principal 14 service.

12 - Case C-349/96 CPP [1999] ECR I-973. paragraph 31. 13 — CPP (cited in footnote 12, paragraph 29).

14 — CPP (cited in footnote 12. paragraph 30) and Joined Cases C-308/96 and C-94/97 Madgett and Baldwin [1998] ECR I-6229, paragraph 24; see, in particular, the judgment in Case 173/88 Henriksen [1989] ECR I-2763, paragraphs 14 to 16, in which the Court considered the leasing of a garage to be a service ancillary to the leasing of a dwelling which also came within the tax exemption for the leasing of immovable property.

28As regards the land storage sites it is clear from the details contained in the request for a preliminary ruling that the areas concerned are clearly defined and identified. The lessee has an exclusive right to use the storage site for a specific period. He has unrestricted access to the site. During the term of the agreement no other boat owner can occupy the site without the lessees consent. This therefore constitutes the leasing of immovable property within the meaning of Article 13B(b) of the Sixth Directive.

29The categorisation of mooring berths within the port basin is rather more difficult however. Here too, it is clear that the mooring berths are clearly distinguished from the rest of the port basin by jetties and posts. However, the Danish and Greek Governments doubt whether mooring berths can be deemed immovable property at all.

30Immovable property can be defined as a specific part of the earths surface, including the buildings firmly constructed thereon, over which title and possession can be created. Unlike the high seas, inland water ways can be held in the ownership and possession of a person. FML is therefore the owner of the port area, as can be seen from the request for a preliminary ruling. The fact that an area is completely or partially under water does not prevent it from being categorised as immovable property that can be leased or let. Just as FML was able to acquire title to the port land, including the port basin, it could equally well have rented the site. Whatever applies to the land as a whole must also, however, apply to its distinctive parts.

31Immovable property must also be distinguished from movable items. Admittedly, the water in which the boats lie does constitute a movable item. On that basis even the Danish Government seems to consider that only the posts and landing-stages which are attached to the earth and to which the boats are made fast should be considered immovable items, the provision of which it considers just an ancillary service. The subject-matter of the lease is not any movable quantity of water, however, but a specific part of the port basin. That water-covered area is clearly delimited and cannot be moved.

32Even on a narrow interpretation of Article 13B(b) of the Sixth Directive, therefore, a mooring berth in a port basin fulfils the definition of immovable property within the meaning of this provision.

33Nor is the existence of a lease precluded by the fact that FML is entitled to allocate a mooring berth to visitors during the temporary absence of the owner of the mooring berth.

34Admittedly, it is a fundamental characteristic of the leasing of immovable property that the lessee takes possession of the property and is entitled to exclude any other person from it at any time. However, it is also possible for leasing arrangements to exist where several lessees are entitled to use the same property with one of the lessees having a preferential right of use.

35This is the case here. The long-term lessee is free to decide whether or not he will move his boat from the mooring berth. Neither FML nor any other boat owner can require the lessee to vacate his mooring berth during the term of the agreement. The port authority may only temporarily allocate a berth to another boat owner only once the lessee has decided not to use his berth for a period of more than 24 hours.

36The answer to the first question must therefore be that the term 'leasing or letting of immovable property' within the meaning of Article 13B(b) of the Sixth Directive encompasses both the letting of a clearly delimited area of a port basin as a mooring berth for boats and a defined storage site for a boat on land.

FONDEN MARSELISBORG LYSTBÅDEHAVN

C — The letting of premises and sites for parking vehicles (second question)

37In its second question referred for a preliminary ruling the referring court wishes to know whether Article 13B(b)(2) of the Sixth Directive excludes parking places for boats from the tax exemption for the leasing of immovable property. The referring court has doubts chiefly because in the Danish version of the provision the term 'køretøjer' is used, which means just vehicles on wheels. It would therefore not be consistent with the wording of the Danish version for boats to be considered vehicles within the meaning of this provision.

38However, as the referring court, the Commission and the governments concerned quite rightly point out, this problem does not arise in the same way in the other language versions of the directive because they use more neutral terms that can also 15 cover boats.

15 — The English version uses the term 'vehicles', the French version the term 'véhicules', the Spanish version the term 'vehículos', the Portuguese version the term 'veículos', the Italian version the term 'veicoli', the Dutch version the term 'voertuigen' and the Swedish version the term 'fordon'.

39It is settled case-law that, where there is a difference between the various language versions, the provision at issue must be interpreted by reference to the purpose and general scheme of the rules of which it forms 16 part.

40Even in the language versions other than the Danish version, however, it is not quite clear whether the concept of 'premises and sites for parking vehicles' also includes mooring berths and storage sites for boats. If the meaning of a phrase cannot be determined on the basis of interpretation which is exclusively textual then, in order to clarify its meaning, reference must be made to the context in which the phrase occurs and consideration given to the structure of 17 the Sixth Directive.

4 1. FML argues that the term 'means of transport' is used in the Sixth Directive as an overall term for vehicles travelling on land, on water and in the air, whilst the word 'vehicle' means just land-based vehicles.

42Examination of the German version of the Sixth Directive does, however, give rise to

16 — Case C-372/88 Cricket St Thomas |1990] ECR I-1345. paragraph 19, and Case C-384/98 D. |2000] ECR 1-6795, paragraph 16.

17 — Case C-2/95 SDC [1997] ECR I-3017, paragraph 22, and the judgment in Henriksen (cited in footnote 14, paragraphs 10 and 11).

doubts as to whether the directive does have any such terminological structure. In the first paragraph of Article 15, subparagraph 2, cited by FML, therefore, the term 'means of transport' is indeed used. In other provisions quoted by FML, however, (Article 28a(2)(a), Article 28n(4)(b) and (c), Article 28o(1)(g) and Article 28p(7)(b) and (c) of the Sixth Directive) the word 'Fahrzeug' (vehicle) is used rather than the more general term 'Transportmittel' (means of transport). [Translator's note: in all these Articles the English version uses the term 'means of transport' and not 'vehicle'.]

43As an example to the contrary the Commission also quite rightly refers to Article 13A(1)(p) of the Sixth Directive, which relates to tax exemption for the supply of transport services for sick or injured persons in specially designed vehicles (véhi cules spécialement aménagés). Here too, the term 'vehicle' covers boats and aircraft.

44Since examination of the terms 'vehicle' and 'means of transport' used in various parts of the directive does not therefore provide any further assistance it is necessary to examine, having regard to the meaning and purpose of the tax exemption for the leasing of immovable property and the exclusions from that exemption, whether boats come within the definition of 'vehicles' in Article 13B(b)(2) of the Sixth Directive.

45There are two principal reasons for exempting the leasing of immovable property from value added tax. Firstly, land that has already been used is not the result of a production process, as Advocate General Jacobs has stated in his Opinion in the Blasi 18 case. Once immovable property has been developed for the first time and a building has been constructed, that property is generally used in a passive manner not entailing added value. 19 It is therefore only the first supply of developed building land and the supply of a building before first occupation that are subject to value added tax, 20 whilst the later transfer of a previously occupied building and the leasing thereof are exempt from value added tax.

46Secondly, in any event in most of the Member States, prior to harmonisation under the Sixth Directive the letting of residential property was not subject to value 21 added tax for social reasons. It was intended that this position should be maintained in the Sixth Directive in order to avoid a rise in rents for residential premises.

47Neither of these two reasons justifying tax exemption apply to the cases in Article 13B(b)(1) to (4) of the Sixth Directive, so that

18 — Opinion in Case C-346/95 Blasi [1998] ECR I-483, paragraphs 15 and 16.

19 — This might not be the case where an undertaking's production works is constructed on the property so that the property becomes part of the production process. 20 — See Article 4(3)(a) and (b) of the Sixth Directive.

21 — See the Commission Proposal for the Sixth Directive (Bulletin of the European Communities, issue II-1973, p.17). FONDEN MARSELISBORG LYSTBADEHAVN those special cases of letting immovable property were excluded from the exemption and again made subject to value added tax.

48One distinguishing feature of these services is, firstly, a generally more active use of the immovable property. The provision of hotel accommodation and accommodation on camping sites under subparagraph 1, for example, encompasses numerous other services going beyond the mere provision of accommodation or sites.

49Although this argument has less weight in connection with the letting of premises and sites for parking vehicles under the second subparagraph, certain additional services — such as security on the parking sites — might also be included. However, the second aspect is of particular significance in this context, that is to say the absence of any socio-political reason for tax exemption.

50The letting of mooring berths for boats also entails a more intensive use of the property, such as is generally characteristic of the activities excluded under Article 13B (b)(1) to (4) of the Sixth Directive. For instance, as on a campsite, other facilities, such as sanitary installations, are provided over and above the basic berth or storage site. It is also necessary for the berths to be equipped with landing-stages and special devices for making boats fast, and these have to be regularly checked and maintained because of the effect that water can have.

51Nor do the social reasons that originally justified allowing an exemption in respect of the leasing of immovable property appear to apply to the leasing of mooring berths for pleasure boats.

52It would therefore appear, having regard to the aims of Article 13B(b) of the Sixth Directive, that subparagraph 2 of that provision should be construed as meaning that it also applies to the letting of mooring berths and storage sites for pleasure boats. Such an interpretation also respects the principle that the provision should not be afforded a strict interpretation.

V — Conclusion

53It is recommended that the questions referred to the Court by the Vestre Landsret should be answered as follows:

(1) The term 'leasing or letting of immovable property' within the meaning of Article 13B(b) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment encompasses both the letting of a clearly delimited area of a port basin as a mooring berth for boats and a defined storage site for a boat on land.

(2) Article 13B(b)(2) of the Sixth Directive also applies to the leasing of mooring berths and storage sites for boats.