C-456/07 Mihal

A self-employed bailiff is a taxable person despite exercising public powers

What is the case?

Mr Mihal worked as a bailiff in Slovakia. Under the applicable national legislation a bailiff carries out enforcement acts that fall within the rights and powers of a public authority, but does so on his own account rather than as part of the public administration, and is remunerated for his services. The Slovak tax office treated him as a taxable person for VAT purposes. He argued that his activity was outside the tax because of the public nature of the powers he exercised.

What is the Court asked?

Whether an activity carried on by a private individual such as a bailiff falls outside VAT under the first subparagraph of Article 4(5) of the Sixth Directive, which treats bodies governed by public law as non-taxable persons for activities engaged in as public authorities, where the activity consists in acts falling within the rights and powers of a public authority.

The Court’s decision

Ruling by order, the Court held that the activity is not exempted from VAT merely because it consists in acts falling within the rights and powers of a public authority. Even assuming that a bailiff performs such acts, under legislation of the kind at issue he does not exercise his activity in the form of a body governed by public law, since he is not integrated into the organisation of the public administration but acts as an independent economic operator in a self-employed capacity. He therefore falls outside the exclusion. The rule that matters here is cumulative.

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