C-438/01 Design Concept

JUDGMENT OF THE COURT 5 June 2003 *

In Case C-438/01,

REFERENCE to the Court under Article 234 (Fifth Chamber)

EC by the Cour de cassation (Luxembourg) for a preliminary ruling in the proceedings pending before that court between

Design Concept SA

and

Flanders Expo SA,

on the interpretation of Article 9(2)(e) of Sixth 17 May 1977 on the harmonisation of the laws Council Directive 77/388/EEC of of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1),

* Language of the case: French.

THE COURT (Fifth Chamber),

composed of: M. Wathelet, President of the Chamber, C.W.A. Timmermans, D.A.O. Edward, A. La Pergola and S. von Bahr (Rapporteur), Judges,

Advocate General: F.G. Jacobs,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

— Design Concept SA, by M. Di Stefano, avocat,

— the French Government, by G. de Bergues and P. Boussaroque, acting as Agents,

— the Commission of the European Communities, by E. Traversa and C. Giolito, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Design Concept SA, represented by M. Di Stefano, of the Greek Government, represented by V. Kyriazopoulos and S. Chala, acting as Agents, and of the Commission, represented by C. Giolito, at the hearing on 14 November 2002,

after hearing the Opinion of the Advocate General at the sitting on 12 December 2002, gives the following

Judgment

Legal context and the dispute

1By judgment of 8 November 2001, received at the Court on 13 November 2001, the Cour de cassation (Court of Cassation) (Luxembourg) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Article 9(2)(e) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; 'the Sixth Directive').

2That question was raised in the course of proceedings between Flanders Expo SA ('Flanders Expo'), a company incorporated under Belgian law, established in Ghent (Belgium), and Design Concept SA ('Design Concept'), a company incorporated under Luxembourg law, established in Hesperange (Luxembourg), concerning the refusal of the latter to pay value added tax ('VAT') on services which had been supplied to it.

Community legislation

3The seventh recital in the preamble to the Sixth Directive states:

'Whereas the determination of the place where taxable transactions are effected has been the subject of conflicts concerning jurisdiction as between Member States, in particular as regards supplies of goods for assembly and the supply of services; whereas although the place where a supply of services is effected should in principle be defined as the place where the person supplying the services has his principal place of business, that place should be defined as being in the country of the person to whom the services are supplied, in particular in the case of certain services supplied between taxable persons where the cost of the services is included in the price of the goods'.

4Article 9(1) of the Sixth Directive states:

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

5Article 9(2)(e) of the Sixth Directive provides:

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

— advertising services,

…'

The main proceedings and the question referred for a preliminary ruling

6In connection with a trade fair known as 'Horeca', organised in Ghent for professionals in the hotel and catering business, Design Concept, acting for the Luxembourg Ministry of Economic Affairs, commissioned from Flanders Expo various services including the construction of two stands, the cleaning of those stands during the exhibition and the provision of staff to transport equipment.

7Flanders Expo submitted an invoice to Design Concept for the price of its services, including in it the amount of VAT. However, Design Concept excluded the amount of VAT from its payment on the ground that since the services supplied were advertising services and the recipient of those services, Design Concept, was not situated in the same Member State as the supplier, Flanders Expo, the place where the services were supplied was where the customer was established, that is to say Luxembourg, in accordance with the rule laid down in Article 9(2)(e) of the Sixth Directive. Design Concept therefore took the view that it was not obliged to pay the VAT claimed from it by Flanders Expo in Belgium.

8Flanders Expo brought an action before the Tribunal de paix (Magistrates' Court) (Luxembourg) which upheld its claim for payment of VAT. On appeal the Tribunal d'arrondissement (District Court) (Luxembourg) confirmed the decision at first instance, holding, contrary to the interpretation put forward by Design Concept, that the services supplied by Flanders Expo are not advertising services and that the general rule on the place of taxation laid down in Article 9(1) of the Sixth Directive is applicable. According to that rule the place where a service is supplied is the place from which the service is performed, in this case Belgium.

9The Cour de cassation, to which Design Concept appealed, takes the view that the lower courts were probably wrong to refuse to treat the services supplied by Flanders Expo as advertising services. However, it is uncertain whether their decision is justified on another ground based on the interpretation of Article 9(2)(e) of the Sixth Directive, read in the light of the seventh recital in the preamble thereto.

10After having recalled the terms of the seventh recital, the Cour de cassation states that if incorporation in the price of the goods of the cost of advertising services were an essential condition for the transfer of taxation to the customer's country, the decision of the lower courts would then be justified, given that in the present case the cost of those services is borne ultimately not by a trader, but by the Luxembourg State which, as the advertiser, commissioned those services from the intermediate customer.

11Since it was uncertain of the answer to the question of Community law raised by the appeal before it, the Cour de cassation decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:

'Is Article 9(2)(e) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment concerning "advertising services" applicable to services supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser, if the advertiser does not produce goods in the price of which the cost of the services is going to be included?'

Preliminary observations

12In its order for reference, the Cour de cassation states that, 'prima facie', the lower courts did not correctly interpret the concept of 'advertising services' referred to in the second indent of Article 9(2)(e) of the Sixth Directive. The question raised by the Cour de cassation is thus founded on the premiss that the services supplied by Flanders Expo are 'advertising services' within the meaning of that provision.

13However, although it does not form the subject-matter of a question referred for a preliminary ruling, the nature of the services supplied by Flanders Expo has given rise to a considerable number of observations from Design Concept, the French Government and the Commission.

14In that regard, it should be remembered that it is settled case-law that, in the context of the cooperation between the Court of Justice and the national courts provided for by Article 234 EC, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, inter alia, Case C-379/98 PreussenElektra [2001] ECR I-2099, paragraph 38).

15Thus, in the present case the answer to the sole question referred must proceed from the premiss taken as a basis by the national court, namely that the services in question in the main proceedings are advertising services. Nevertheless, in so far as that premiss is based on a finding that the Cour de cassation itself describes as 'prima facie', it is necessary to point out that the notion of 'advertising services' referred to in the second indent of Article 9(2)(e) of the Sixth Directive is a Community law concept which must be interpreted uniformly (see, inter alia, Case C-69/92 Commission v Luxembourg [1993] ECR I-5907, paragraph 15) and that it will be for the national court, where necessary, to determine the classification of the services concerned in the light of the case-law of the Court.

The question referred for a preliminary ruling

16By its question the national court seeks essentially to ascertain, first, whether Article 9(2)(e) of the Sixth Directive must be interpreted as applying to advertising services supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser and, second, whether that provision is applicable where the advertiser does not produce goods or services in the price of which the cost of the advertising services may be included.

The first part of the question

17In accordance with the case-law of the Court, the second indent of Article 9(2)(e) of the Sixth Directive must be interpreted as applying not only to advertising services supplied directly and invoiced by the supplier to a taxable advertiser, but also to services supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser (Case C-108/00 SPI [2001] ECR I-2361, paragraph 22).

18It follows that the indirect nature of the services, resulting from the fact that they were supplied and invoiced by a first supplier to an undertaking, which was itself commissioned to perform advertising services, before being invoiced by that undertaking to the advertiser, does not constitute an obstacle to the application of Article 9(2)(e) of the Sixth Directive.

The second part of the question

19Design Concept and the Commission argue that the fact that the advertiser, that is the Luxembourg Ministry of Economic Affairs in the main proceedings, does not produce goods or supply services in the price of which the cost of the services may be included is not relevant to the resolution of this dispute.

20They take the view that the relationship between the first supplier and the intermediate recipient of the services must be considered independently of the relationship between that intermediate customer and the advertiser. It is, therefore, not necessary to examine the status of the final customer, in this case the advertiser, or, in particular, to ascertain whether it is itself a taxable person and therefore capable of passing on the cost of the services received in the price of the goods or services which it supplies.

21The French Government takes the contrary view that, if the final recipient of the services does not include the sum paid in consideration for those services in the price of any goods or service which it sells, the rule provided in Article 9(2)(e) of the Sixth Directive is not applicable.

22In that regard, as is apparent from the seventh recital in the preamble to the Sixth Directive, Article 9 of the directive lays down the rules for determining the place where taxable transactions are effected, for the purpose of avoiding conflicts concerning jurisdiction.

23Moreover, according to the fundamental principle which underlies the VAT system, VAT applies to each transaction by way of supply of goods or services after deduction has been made of the VAT which has been levied directly on transactions relating to inputs (see, in particular, Case C-62/93 BP Supergas [1995] ECR I-1883, paragraph 16).

24Therefore, the rules for determining the place where a taxable transaction is effected, laid down in Article 9 of the Sixth Directive, must be applied to each transaction by way of supply of services.

25Thus, in a case such as that in the main proceedings the rule laid down in Article 9(2)(e) of the Sixth Directive must be applied to the services supplied by the first supplier to the intermediate customer.

26Under Article 9(1) and (2), the determination of the place where a service is supplied depends solely on the place where the supplier and the recipient of the service in question are established. That article in no way requires account to be taken of transactions carried out after that first supply of services.

27As the Advocate General points out in paragraphs 22 to 33 of his Opinion, the seventh recital in the preamble to the Sixth Directive does not lead to a different interpretation from that which results from paragraphs 24 to 26 of the present judgment.

28It follows that in a case of an indirect supply of services, such as that at issue in the main proceedings, involving a first supplier of services, an intermediate customer and an advertiser who receives services from the intermediate customer, the transaction by way of supply of services effected by the first supplier to the intermediate customer must be considered separately, for the purpose of determining the place of taxation of that transaction. The rule laid down in the second indent of Article 9(2)(e) of the Sixth Directive applies, as a rule, if the intermediate customer, as recipient of the advertising services, is a taxable person established in a Member State other than that in which the first supplier is based. It is not necessary to determine whether the advertiser, who is the final recipient of the services, is also a taxable person who includes the cost of those services in the price of goods or services supplied by him.

29The answer to the question referred must therefore be that Article 9(2)(e) of the Sixth Directive must be interpreted as applying to advertising services supplied indirectly to the advertiser and invoiced to an intermediate customer who in turn invoices them to the advertiser. The fact that the advertiser does not produce goods or services in the price of which the cost of the advertising services may be included is not relevant for the purpose of determining the place where the services are supplied to the intermediate customer.

Costs

Costs

30The costs incurred by the Greek and French Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Fifth Chamber),

in answer to the question referred to it by the Cour de cassation by judgment of 8 November 2001, hereby rules:

Article 9(2)(e) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment must be interpreted as applying to advertising services supplied indirectly to the advertiser and invoiced to an intermediate customer who in turn invoices them to the advertiser. The fact that the advertiser does not produce goods or services in the price of which the cost of the advertising services may be included is not relevant for the purpose of determining the place where the services are supplied to the intermediate customer.

Wathelet Timmermans Edward

La Pergola von Bahr

Delivered in open court in Luxembourg on 5 June 2003.

R. Grass M. Wathelet

Registrar President of the Fifth Chamber

OPINION OF ADVOCATE GENERAL JACOBS delivered on 12 December 2002 1

Introduction

1In these proceedings the Cour de cassation of the Grand Duchy of Luxembourg asks the Court of Justice to interpret Article 9(2)(e) of the Sixth VAT Directive (the Sixth Directive or the Directive). That provision lays down that advertising services supplied to a customer in another Member State are to be subject to value added tax (VAT) in the Member State where the customer is situated. It therefore constitutes an exception to the normal rule, whereby a service is subject to VAT in the Member State where the person supplying the service is situated.

2The question referred to the Court raises two issues. The first is whether Article 9(2)(e) of the Sixth Directive applies to advertising services supplied indirectly to an advertiser (that is, the party who determines what is to be advertised, and is therefore the ultimate beneficiary of the services) and invoiced to a third party who in turn invoices them to the advertiser. As regards this first issue, the Court has already decided in its recent judgment in the case of SPI 3 that the provision in question does apply in such a situation.

3The issue which falls to be determined in the present case is therefore the second one raised by the referring court, namely whether Article 9(2)(e) of the Sixth Directive applies to advertising services if the recipient of those services does not produce goods in the price of which the cost of those services is to be included.

The relevant legal provisions

4Under Article 2 of the Sixth Directive, a supply of goods or services effected for consideration by a taxable person acting as such is to be subject to VAT. According to Article 4(1), a taxable person is a person who carries out an economic activity, whatever the purpose or results of that activity. Economic activities include, under Article 4(2), the activities of persons supplying services. The first subparagraph of Article 6(1) defines a supply of services as 'any transaction which does not constitute a supply of goods'.

5Title VI of the Sixth Directive sets out the rules which determine the place of taxable transactions. Those rules are important in cases where the supply of goods or services affects more than one country. Guidance as to the purposes of the rules is supplied by the seventh recital in the preamble to the Sixth Directive:

'... the determination of the place where taxable transactions are effected has been the subject of conflicts concerning jurisdiction as between Member States, in particular as regards supplies of goods for assembly and the supply of services;... although the place where a supply of services is effected should in principle be defined as the place where the person supplying the services has his principal place of business, that place should be defined as being in the country of the person to whom the services are supplied, in particular in the case of certain services supplied between taxable persons where the cost of the services is included in the price of the goods.'

6In pursuit of the objective indicated by that recital, Article 9(1) of the Sixth Directive lays down the general rule that:

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

7Article 9(2) sets out a number of exceptions to that rule. Subparagraph (a) provides that the place of the supply of services connected with immovable property shall be the place where the property is situated. Subparagraph (c) provides, inter alia, that the place of supply of services relating to cultural, artistic, sporting, scientific, educational, entertainment or similar activities shall be the place where the services are physically carried out. Under subparagraph (e):

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

— advertising services...'

The facts and question referred

8Design Concept, a company established in Luxembourg, was commissioned by the Luxembourg Ministry of Economic Affairs to organise display stands for the Ministry at a trade fair, known as HORECA, in Ghent, Belgium. In order to carry out its commission, Design Concept contracted with Flanders Expo, a Belgian company, for the supply of various services, including the construction of two stands at the fair, the cleaning of those stands while the fair was in progress, and the provision of staff to transport the material displayed.

9When Flanders Expo submitted its invoice for the services which it had provided, it included a sum representing the VAT payable on the transaction in Belgium under applicable Belgian law. Design Concept, however, deducted from its payment the sum representing the VAT. It argued that the services which had been supplied to it were advertising within the meaning of Article 9(2)(e) of the Directive, and that VAT was therefore payable in Luxembourg, the place where it, as the customer, was established.

10Flanders Expo brought an action in Luxembourg to recover the disputed sum. It denied that its services qualified as advertising for the purposes of Article 9(2)(e). In its view, they fell instead within the general rule laid down by Article 9(1) of the Directive (with the consequence that VAT was payable in Belgium as the supplier's State of establishment), or within the rule concerning services connected with immovable property laid down by Article 9(2)(a) of the Directive (with the consequence that VAT was payable in Belgium as the place where the property was situated), or within the rule concerning services related to cultural, artistic, sporting, scientific, educational, entertainment or similar activities laid down by Article 9(2)(c) (again with the consequence that VAT was payable in Belgium as the place where the services were physically carried out).

11Both the Tribunal de paix de Luxembourg, at first instance, and the Tribunal d'arrondissement de Luxembourg, on appeal, found that the services supplied were not in the nature of advertising, and therefore upheld Flanders Expo's claim to the Belgian VAT.

12The case is now before the Cour de cassation of the Grand Duchy of Luxembourg. The Cour de cassation, contrary to the conclusions of the inferior courts, is of the view that the services supplied by Flanders Expo are advertising within the meaning of Article 9(2)(e) of the Sixth Directive.

13The Cour de cassation nonetheless considers that the applicability of the rule in Article 9(2)(e) to the circumstances of the case remains in doubt. It notes that, according to the seventh recital, the place for the supply of services should be defined as being the place where the recipient of the services is located 'in particular in the case of certain services supplied between taxable persons where the cost of the services is included in the price of the goods'. In the view of the Cour de cassation, that recital is sufficient to raise a legitimate doubt as to whether it is an essential condition for the application of Article 9(2)(e) that the cost of the advertising services be included in the price of goods.

14The Cour de cassation considers that the answer to that question affects the outcome of the matter before it, given that the cost of the services in the present case ultimately lies with the Luxembourg State which does not produce goods and therefore cannot pass the cost on in the manner foreseen by the seventh recital.

15The Cour de cassation has therefore decided to stay the proceedings before it and to ask the Court whether Article 9(2)(e) of the Sixth Directive is applicable in the case of advertising services supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser, if the advertiser does not produce goods in the price of which the cost of the services is going to be included.

16Written observations have been lodged by Design Concept, Flanders Expo, the French Government and the Commission. Submissions were made on behalf of the Greek Government at the hearing, at which Design Concept and the Commission were also represented.

Assessment

17On a preliminary point, a number of the submissions before the Court concern whether the Cour de cassation is correct to characterise the services at issue in the present proceedings as advertising services within the meaning of Article 9(2)(e) of the Sixth Directive. It is in my view important that the notion of advertising services should not be given an unduly broad interpretation. However, I do not propose to consider the meaning of advertising services in the context of the present reference. The Luxembourg Cour de cassation has concluded that the services at issue in the proceedings before it are in the nature of advertising, and the question which it refers is therefore premissed upon the existence of advertising services. In the absence of any request on the part of the referring court for assistance on that issue, I shall confine my Opinion to a consideration of the two issues on which the Court's guidance has actually been sought.

18The first issue is whether Article 9(2)(e) of the Sixth Directive applies to advertising services supplied indirectly to an advertiser and invoiced to a third party who in turn invoices them to the advertiser.

19As all of the parties to the present proceedings observe, that question has already received an affirmative answer from the Court in the SPI case, 4 in which it was held that 'Article 9(2)(e) must be interpreted as applying not only to [advertising] services supplied directly and invoiced by the supplier to a taxable advertiser, but also to services supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser'.

20I shall therefore turn to the second issue raised by the question referred, namely whether Article 9(2)(e) of the Sixth Directive applies to advertising services in circumstances where the advertiser does not produce goods in the price of which the cost of the advertising services is to be included.

21The French Government maintains that Article 9(2)(e) should not apply in such circumstances, given the reference in the seventh recital to the cost of the service being included in the price of the goods. In support of its position, it cites the following passage from the Court's judgment in Commission v France: 5

'As may be seen from the seventh recital in the preamble to the Sixth Directive, defining the place of taxation of advertising services as the place where the person to whom the services are supplied has his principal place of business is justified by the fact that the cost of those services, supplied between taxable persons, is included in the price of the goods. The Community legislature therefore considered that, in so far as the person to whom the services are supplied customarily sells the goods or supplies the services advertised in the State where he has his principal place of business, and charges the corresponding VAT to the final consumer, the VAT based on the advertising service should itself be paid by that person to that State. This reasoning is one of the factors which must be taken into account in interpreting the term "advertising services" in Article 9(2)(e) of the Sixth Directive.'

22In my view, the French Government's argument with regard to the second issue cannot be accepted.

23It is true that, as appears from the seventh recital, Article 9(2)(e) is in particular intended to ensure that VAT is payable in the State of the recipient of services in cases where the recipient produces goods or services in the price of which the cost of the services which he receives will be included.

24The rule in Article 9(2)(e) has been shaped in several respects by that objective. First, the provision requires that the recipient of the services which it specifies must be a taxable person. The recipient will thus be involved in an economic activity, and will ordinarily, therefore, pass on the costs of services received, including the VAT payable thereon, to his or her own customers. Secondly, the services specified in the provision are all of a kind which makes them likely to constitute inputs to other economic activities.

25As the Court has held, the seventh recital is therefore a useful aid in interpreting the meaning of the terms of Article 9(2)(e). 7T he approach advocated by the French Government does not, however, employ the recital to assist in establishing the meaning of a term actually contained in Article 9(2)(e), but as a basis for reading into that provision an additional element which is nowhere to be found in the text of the provision itself.

26In my opinion it would be necessary, in order to sustain such an approach, at least to demonstrate that the term to be read into the text was unequivocally supported by the purposes underlying the provision and was necessary to give effect to them. I am not convinced that such is the case here for the following three reasons.

27First, it is important to note that the seventh recital indicates that VAT should be payable in the State where the recipient of services is situated in particular where VAT would be passed on by the recipient to its own customers. The recital therefore implies that there may be other valid objectives justifying the payment of VAT in the State of the customer which may be served by Article 9(2)(e). By way of example, a purpose which underlies a number of provisions of the Sixth Directive is the avoidance of distortions of competition resulting from differences in the level at which VAT is set from State to State. By making VAT payable on services in the State of the customer in circumstances where the VAT will not be passed on, a risk of competitive distortion arises. It cannot therefore be assumed that a narrow ing of the application of Article 9(2)(e) in the manner suggested by the French Government would not undermine other objectives which the provision was also intended to pursue.

28Secondly, the approach advocated by the French Government would in any event appear to exclude from Article 9(2)(e) situations which meet the specific objective set out in the seventh recital. By requiring that the cost of the services be passed on in the price of goods or services produced by the advertiser itself, such an approach would prevent Article 9(2)(e) from applying in circumstances such as those in the present proceedings where services are supplied to an intermediate customer, who then includes the cost of those services in the price of the services which it supplies to the advertiser. That approach cannot therefore be justified by reference to the specific objective set out in the seventh recital.

29Thirdly, such an approach would appear to be in tension with the more general objective of Article 9, which is to avoid instances of double taxation or non-taxation through the establishment of a common scheme for allocating the place of taxation of services. That purpose is apparent from the seventh recital's reference to 'conflicts concerning jurisdiction as between Member States', and has been confirmed by the Court on numerous occasions. It has been held also to underlie the provisions of Article 9(2). 9

30It follows from the status of Article 9 as a scheme for allocating jurisdiction among the Member States that, whatever the more particular purposes justifying its various provisions, they should all be interpreted in such a way as to ensure the legal certainty upon which the effective operation of such a scheme depends.

31In addition to any loss of legal certainty which might be thought to result as a consequence of departing from the text of the provision, the approach advocated by the French Government would seem to me to give rise to a number of practical uncertainties in its application.

32Suppliers of advertising services, as well as the relevant authorities of the Member States, would be required to determine whether in a given case an advertiser could be said to produce goods or services in the price of which the cost of the advertising services would be absorbed. The assessment would be complicated by the fact that advertising services may be supplied to the advertiser indirectly via a third party. In such cases, enquiries would need to extend beyond the supplier's immediate customer. Nor would it necessarily be apparent from the services themselves whether the advertiser produced goods or services in the price of which the cost of the services might be entered, given that, as the Commission points out, an organisation such as a producers' collective may advertise goods without actually producing them itself, and given also the range 33. Accordingly, I am of the view that it is of services qualifying as advertising for the not justifiable, having regard to the pur purposes of Article 9(2)(e). Such practical poses of Article 9(2)(e), to make its appli difficulties bring with them an inevitable cation subject to an additional requirement risk that authorities will differ in their that the advertising services be supplied to appreciation of a given case, resulting in an advertiser who produces goods in the either the double taxation or non-taxation price of which the cost of the advertising of an advertising service.

services will be entered.

Conclusion

34It is therefore my opinion that the Court should answer the referring court's question in the following way:

The second indent of Article 9(2)(e) 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, concerning 'advertising services', is applicable in circumstances where the services in question are supplied indirectly to the advertiser and invoiced to a third party who in turn invoices them to the advertiser; it also applies regardless of whether the advertiser to whom the services are supplied produces goods in the price of which the cost of the advertising services will be included.

Notes

(1) Original language: English.

(2) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — common system of value added tax: uniform basis of assessment, OJ 1977 L 145, p. 1.

(3) Case C-108/00 [2001] ECR I-2361.

(4) Cited in note 3.

(5) Case C-68/92 [19931 ECR I-5881, paragraph 15.

(6) As is clear from paragraph 15 of the Court's judgment in Commission v France (reproduced at paragraph 21 of this Opinion), although the seventh recital refers only to the recipient of the services producing goods, the specific obiective contained in the recital must be taken also to apply in situations where the recipient of the services is itself a supplier of services.

(7) See paragraph 21.

(8) See Case 168/84 Berkholz [1985] ECR 2251, paragraph 14 of the judgment; Case 283/84 Trans Tirreno Express IVA [19861 ECR 231, paragraph 14; Case C-68/92 Commission v France, paragraph 14; Case C-327/94 Dudda [1996] ECR I-4595, paragraph 20; and Case C-108/00 SPI, paragraph

(15) .

(9) Case C-108/00 SPI at paragraphs 16 and 17 of the judgment.