C-520/14 Gemeente Borsele and Staatssecretaris van Financiën

JUDGMENT OF THE COURT (Fifth Chamber)

12 May 2016 ( *1 )

‛Reference for a preliminary ruling — Value added tax — Directive 2006/112/EC — Articles 2(1)(c) and 9(1) — Taxable persons — Economic activities — Definition — Transport of schoolchildren’

In Case C‑520/14,

REQUEST for a preliminary ruling under Article 267 TFEU from the Hoge Raad der Nederlanden (Supreme Court, Netherlands), made by decision of 7 November 2014, received at the Court on 18 November 2014, in the proceedings

Gemeente Borsele

v

Staatssecretaris van Financiën

and

Staatssecretaris van Financiën

v

Gemeente Borsele,

THE COURT (Fifth Chamber),

composed of J.L. da Cruz Vilaça, President of the Chamber, F. Biltgen, A. Borg Barthet (Rapporteur), E. Levits and M. Berger, Judges,

Advocate General: J. Kokott,

Registrar: M. Ferreira, Principal Administrator,

having regard to the written procedure and further to the hearing on 26 November 2015,

after considering the observations submitted on behalf of:

the Gemeente Borsele, by D. Bos and A.T.M. Joore-van Zanten, belastingadviseurs,

the Netherlands Government, by M. Bulterman, M. Gijzen and M. Noort, acting as Agents,

the United Kingdom Government, by V. Kaye and S. Simmons, acting as Agents, and R. Hill, Barrister,

the European Commission, by L. Lozano Palacios and G. Wils, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 23 December 2015,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling relates to the interpretation of Articles 2(1)(c) and 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1, ‘the VAT Directive’).

2The request has been made in proceedings between the Geemente Borsele (municipality of Borsele) and the Staatssecretaris van Financiën (Secretary of State for Finance) concerning the right to deduct the value added tax (‘VAT’) claimed by that municipality.

Legal context

EU law

3Article 2(1)(c) of the VAT Directive provides that the following are to be subject to VAT:

‘the supply of services for consideration within the territory of a Member State by a taxable person acting as such’.

4Article 9(1) of the VAT Directive is worded as follows:

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

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

5Article 13(1) of the VAT Directive provides:

‘States, regional and local government authorities and other bodies governed by public law shall not be regarded as taxable persons in respect of the activities or transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with those activities or transactions.

However, when they engage in such activities or transactions, they shall be regarded as taxable persons in respect of those activities or transactions where their treatment as non-taxable persons would lead to significant distortions of competition.

In any event, bodies governed by public law shall be regarded as taxable persons in respect of the activities listed in Annex I, provided that those activities are not carried out on such a small scale as to be negligible.’

6Under the heading ‘List of the activities referred to in the third subparagraph of Article 13(1)’, Annex I to the VAT Directive refers, at point 5 thereof, to ‘passenger transport’.

7Article 73 of the VAT Directive provides:

‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’

Netherlands law

8Under the heading ‘School transport costs’, Article 4 of the Wet op het primair onderwijs (Law on primary education) provides:

‘1. For the purposes of schooling, the mayor and aldermen shall, on request, cover the transport costs which they deem necessary of the parents of pupils residing in the territory of their municipality. The municipal council shall adopt a decree laying down the detailed rules for covering the transport costs, taking into account the provisions of the following paragraphs.

...

4. The decree shall take into account the contribution that may reasonably be required of parents and provide that appropriate transport may be provided for the pupil. The decree shall lay down the detailed rules governing how the mayor and aldermen may consult experts in this area.

5. The decree shall provide that transport costs are to be covered in respect of the distance between the pupil’s home and

the nearest primary school accessible to him, or if the pupil needs to attend a special needs primary school, the nearest special needs primary school accessible to him;

a different ordinary or special needs primary school if the transport to that school costs the municipality less than the transport to the ordinary or special needs primary school referred to in point (a), where the parents agree to transport to the other school;

the nearest special needs primary school accessible to the pupil in the pupil’s primary school district, where the parents agree to transport to that special needs primary school; or

a different special needs primary school in the school district referred to in point (c), if the transport to that school costs the municipality less than the transport to the special needs primary school referred to in point (c), where the parents agree to transport to the other school.

...

7. The decree may provide that, for parents whose combined income exceeds EUR 17700, transport costs are to be covered only to the extent that the transport costs exceed the cost of public transport over the distance set by the municipal council on the basis of paragraph 8; that distance may not exceed 6 kilometres. The calculation of income shall be based on the income received during the second calendar year preceding the calendar year during which the school year in respect of an application has been made for transport costs begins. The public transport costs referred to in the first sentence correspond to the public transport costs that would be reasonably incurred for the distance covered, taking into account the zoning system introduced by the decree based on Article 27(1) of the Law on transport of passengers, regardless of whether the area concerned is served by public transport or the extent to which it is actually used. Where paragraph 10 is applied, the decree shall provide for a financial contribution from the parent, to be calculated in accordance with the third sentence above. From 1 January 1999, the amount referred to in the first sentence above shall be adjusted annually on the basis of changes in the index of standard wages of adult workers in relation to the previous year, rounded to a multiple of EUR 450. That adjusted amount shall replace the amount referred to in the first sentence.

8. The decree may provide that there is no right for transport costs to be covered on the basis of the distance between the school which is accessible to the pupil and his home, measured using the shortest route which is sufficiently practical and safe for the pupil.

...

10. The decree may allow the municipality itself to provide transport or arrange for its provision instead of covering the costs of transport.

11. The decree may provide that, in respect of pupils for whom the distance referred to in paragraph 5 exceeds 20 kilometres, the amount of transport costs to be covered is to depend on the parents’ ability to contribute or that the transport which the municipality provides either directly or through others is to be arranged in return for payment of a contribution which depends of the parents’ ability to contribute and which cannot exceed the cost of transporting the pupil concerned. In that case, the decree shall also contain provisions concerning the calculation of the parents’ ability to contribute. The first sentence shall not apply to pupils attending special needs primary schools who live at a distance of more than 20 kilometres from the closest public or private special needs primary school.

...’

9Under Article 4(1) of the wet op de expertisecentra (Law on centres of expertise), the ‘decree shall take account of contributions that may reasonably be required of parents and shall provide that transport may be provided in a manner which is appropriate for the pupil; however, pupils in special needs secondary education are entitled to have their transport costs covered only where they are obliged to use, on account of their disability, a means of transport other than public transport or cannot, on account of their disability, travel independently on public transport’.

10The Verordening leerlingenvervoer gemeente Borsele 2008 (Decree concerning the transport of pupils in the municipality of Borsele, 2008) provides, inter alia, that:

for journeys of distances up to 6 kilometres, the cost of transporting schoolchildren is not covered;

for journeys of distances between 6 and 20 kilometres, transport for schoolchildren is provided in return for payment by the parents of the child transported of a fixed contribution equal to the price of public transport covering a distance of 6 kilometres;

for journeys of distances of more than 20 kilometres, transport for schoolchildren is provided in return for payment of a contribution that cannot exceed the cost price of the transport, calculated, per family, by taking account of the parents’ ability to contribute, in the light of the parents’ combined adjusted income, within the meaning of the 2001 Law on Income Tax.

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

11The municipality of Borsele uses, for the transport of eligible pupils to and from school, the services of transport undertakings. In that respect, for 2008, it paid the sum of EUR 458231, inclusive of VAT.

12In accordance with the provisions of the Decree of the municipality of Borsele concerning the transport of pupils, 2008, approximately one third of parents of pupils for whom school transport was provided paid contributions, equivalent to 3% of the amount paid by that municipality to fund school transport services, totalling to EUR 13958. The difference was financed by the municipality from public funds.

13The municipality of Borsele claimed, before the tax authorities, that it was a taxable person for the purposes of VAT in respect of the provision of school transport services in return for payment of contributions and was thus entitled to deduct from that payment the VAT that had been charged by transport undertakings. That claim was rejected on the ground that the municipality did not provide services for consideration and thus did not carry out any economic activity.

14By decision of 1 July 2009, the tax authorities fixed the amount owed by the VAT Compensation Fund to the municipality of Borsele in respect of 2008; that amount did not include the VAT charged to that municipality by the transport undertakings.

15The municipality of Borsele brought an action against that decision before the Rechtbank te ’s-Gravenhage (District Court, the Hague, Netherlands). That action was rejected as unfounded by decision of 29 December 2010. The municipality of Borsele appealed against that decision before the Gerechtshof te ’s-Gravenhage (Appeal Court, the Hague, Netherlands), which, by judgment of 20 April 2012, set aside the decision at first instance and annulled the decisions of the tax authorities. The municipality of Borsele and the Secretary of State for Finance each brought a separate appeal on a point of law before the Hoge Raad der Nederlanden (Supreme Court, the Netherlands) against the decision of the Gerechtshof te ’s-Gravenhage (Appeal Court, the Hague).

16In those circumstances, the Hoge Raad der Nederlanden (Supreme Court, the Netherlands) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

Should Article 2(1)(c) and Article 9(1) of the VAT Directive be interpreted as meaning that, with regard to the transport of school pupils, on the basis of an arrangement as described in the present judgment, a municipality should to this extent be regarded as a taxable person within the meaning of that directive?

For the purpose of answering that question, should the arrangement as a whole be considered, or should this assessment be made for each transport operation separately?

If the latter is the case, should a distinction be made according to whether pupils are transported over a distance of between 6 and 20 kilometres or over a distance exceeding 20 kilometres?’

The questions referred

17By its questions, the referring court asks, in essence, whether Article 9(1) of the VAT Directive must be interpreted as meaning that a regional or local authority which provides a service for the transport of schoolchildren under conditions such as those described in the main proceedings acts as a taxable person and is, accordingly, subject to VAT.

18The first subparagraph of Article 9(1) of the VAT Directive provides that the term ‘taxable person’ means any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.

19Accordingly, in order to establish whether, in the context of the case before the referring court, a regional or local authority acts as a taxable person, it is necessary to determine whether it carries out an economic activity within the meaning of the VAT Directive.

20In that regard, it must be recalled that the second subparagraph of Article 9(1) of the VAT Directive provides that any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, is to be regarded as an ‘economic activity’.

21As the Advocate General stated at point 32 of her Opinion, an activity can be regarded as an economic activity within the meaning of Article 9(1) of the VAT Directive only where the activity corresponds to one of the chargeable events defined in Article 2 of that directive.

22In the present case, in order to determine whether the transport for schoolchildren provided by a municipality under conditions such as those described in the main proceedings constitutes an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive, it is therefore necessary to establish, in the first place, whether, in organising that school transport, such a municipality supplied a service for the purposes of Article 2(1)(c) of the VAT Directive.

23In so far as the information provided by the referring court in its request for a preliminary ruling permits the inference that the transport services at issue in the main proceedings do indeed constitute a supply of services, it is necessary to verify whether those services may be regarded as being provided by the municipality in question for consideration, as required by Article 2(1)(c) of the VAT Directive.

24In that regard, it should be noted that, according to settled case-law, a supply of services is effected ‘for consideration’, within the meaning of Article 2(1)(c) of the VAT Directive, and is therefore taxable, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient (see, inter alia, judgments of 3 March 1994 in TolsmaC‑16/93, EU:C:1994:80, paragraph 14; 5 June 1997 in SDC, C‑2/95, EU:C:1997:278, paragraph 45; and 26 June 2003 in MKG-Kraftfahrzeuge-Factoring, C‑305/01, EU:C:2003:377, paragraph 47).

25In the present case, it must be noted that the parental contribution to the transport costs is not calculated on the basis of the actual costs of the services provided. The amount of the parental contribution is not linked to the number of kilometres travelled per day, the cost price per journey for each pupil transported, or the frequency of the journeys.

26However, the fact that the price paid for an economic transaction is higher or lower than the cost price is irrelevant to the question whether a transaction is to be regarded as a ‘transaction effected for consideration’. The latter concept requires only that there be a direct link between the supply of goods or the provision of services and the consideration actually received by the taxable person (see, to that effect, judgments of 8 March 1988 in Apple and Pear Development Council, 102/86, EU:C:1988:120, paragraph 12, and 20 January 2005 in Hotel Scandic Gåsabäck, C‑412/03, EU:C:2005:47, paragraph 22).

27Accordingly, the fact that approximately one third of the parents in question pay a contribution towards school transport permits the inference that the municipality of Borsele supplied services for consideration for the purposes of Article 2(1)(c) of the VAT Directive.

28In the second place, as the Advocate General observed in points 49 and 50 of her Opinion, it should be noted that the existence of a supply of services for consideration within the meaning of the abovementioned provision is not sufficient to establish the existence of an economic activity within the meaning of Article 9(1) of the VAT Directive.

29In that regard, according to the Court’s case-law, in order to determine whether a service is supplied ‘in return for remuneration’, so that the activity in question is to be classified as an economic activity (see, to that effect, the judgment of 26 March 1987 in Commission v Netherlands, 235/85, EU:C:1987:161, paragraph 15), all the circumstances in which it is supplied have to be examined (see, to that effect, judgment of 26 September 1996 in Enkler, C‑230/94, EU:C:1996:352, paragraph 27).

30Comparing the circumstances in which the person concerned supplies the services in question with the circumstances in which that type of service is usually provided may therefore be one way of ascertaining whether the activity concerned is an economic activity (see, by analogy, judgment of 26 September 1996 in Enkler, C‑230/94, EU:C:1996:352, paragraph 28).

31Other factors, such as, inter alia, the number of customers and the amount of earnings, may be taken into account along with others when that question is under consideration (see, by analogy, judgment of 26 September 1996 in Enkler, C‑230/94, EU:C:1996:352, paragraph 29).

32While it is, of course, ultimately for the national court to assess all the facts of the case in the main proceedings, the Court, which is called on to provide answers of use to the national court, may provide guidance, based on the file in those proceedings and on the written and oral observations which have been submitted to it, which may enable the national court to give judgment in the specific case before it.

33In that regard, it should be noted, first, that the municipality of Borsele recovers, through the contributions that it receives, only a small part of the costs incurred. The contributions at issue in the main proceedings are not payable by each user and were paid by only a third of the users, with the result that they account for only 3% of the overall transport costs, the balance being financed by public funds. Such a difference between the operating costs and the sums received in return for the services offered suggests that the parental contribution must be regarded more as a fee than as consideration (see, by analogy, judgment of 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 50).

34It therefore follows from that lack of symmetry that there is no genuine link between the amount paid and the services supplied. Hence, it does not appear that the link between the transport service provided by the municipality in question and the payment to be made by parents is sufficiently direct for that payment to be regarded as consideration for that service and, accordingly, for that service to be regarded as an economic activity within the meaning of Article 9(1) of the VAT Directive (see, by analogy, judgment of 29 October 2009 in Commission v Finland, C‑246/08, EU:C:2009:671, paragraph 51).

35It should be noted, second, that the conditions under which the services at issue in the main proceedings are supplied are different from those under which passenger transport services are usually provided, since the municipality of Borsele, as the Advocate General observed in point 64 of her Opinion, does not offer services on the general passenger transport market, but rather appears to be a beneficiary and final consumer of transport services which it acquires from transport undertakings with which it deals and which it makes available to parents of pupils as part of its public service activities.

36It follows from all the forgoing considerations that, in answer to the questions submitted by the referring court, Article 9(1) of the VAT Directive must be interpreted as meaning that a regional or local authority which provides a service for the transport of schoolchildren under conditions such as those described in the main proceedings does not carry out an economic activity and is not therefore a taxable person.

Costs

37Since 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 (Fifth Chamber) hereby rules:

Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that a regional or local authority which provides a service for the transport of schoolchildren under conditions such as those described in the main proceedings does not carry out an economic activity and is not therefore a taxable person.

Signatures

[Signatures]

( *1 ) Language of the case: Dutch.

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 23 December 2015 ¹

‛Tax legislation — Value added tax — Article 9(1) of Directive 2006/112/EC — Taxable person — Economic activity — Transport of school pupils on behalf of a municipality — Parents’ financial contribution to the municipality dependent on their income’

I – Introduction

1The Netherlands municipalities appear to be well administered. It is certainly the case that at least some of the authorities in those municipalities frequently make a point of coming up with ways to secure tax savings for the benefit of their citizens. Since these initiatives do not always proceed without coming into conflict with the Netherlands tax administration, the Court of Justice has already had occasion to deal with a number of requests for a preliminary ruling on the interpretation of EU law on value added tax (VAT). ²

2The present proceedings are concerned with the question of whether, in organising the transport of pupils to its schools, the municipality of Borsele is carrying on an activity subject to VAT. The municipality would like this to be the case. For it would like to use the right to deduct input tax associated with such an activity in order to make considerable savings on the VAT which it has paid on the services provided by transport undertakings entrusted with the provision of school transport facilities.

3From the point of view of VAT law, it is therefore necessary to determine whether the municipality of Borsele has thus carried on an ‘economic activity’. Admittedly, the Court has already looked at the definition of that term on a number of occasions, in particular in relation to public or quasi-public activities. ³ The assessment criteria laid down by case-law in this regard require further clarification, however.

II – Legal framework

4The collection of VAT within the European Union is governed by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ⁴ (‘the VAT Directive’). It is true that the Sixth Directive, ⁵ applicable until 31 December 2006, is not directly relevant to the dispute in the main proceedings. Given, however, that its provisions are largely identical, ⁶ the Court’s case-law on the Sixth Directive must also be taken into account in the present case.

5In accordance with Article 2(1)(c) of the VAT Directive, ‘the supply of services for consideration within the territory of a Member State by a taxable person acting as such’, inter alia, is subject to VAT.

6Article 9(1) of the VAT Directive (formerly Article 4(1) and (2) of the Sixth Directive) defines ‘taxable person’ as follows:

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

Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.’

7Article 13(1) of the VAT Directive (formerly the first to the third subparagraphs of Article 4(5) of the Sixth Directive) contains a special provision on public activities:

States, regional and local government authorities and other bodies governed by public law shall not be regarded as taxable persons in respect of the activities or transactions in which they engage as public authorities, even where they collect dues, fees, contributions or payments in connection with those activities or transactions.

However, when they engage in such activities or transactions, they shall be regarded as taxable persons in respect of those activities or transactions where their treatment as non-taxable persons would lead to significant distortions of competition.

In any event, bodies governed by public law shall be regarded as taxable persons in respect of the activities listed in Annex I, provided that those activities are not carried out on such a small scale as to be negligible.’

8Annex I to the VAT Directive, to which the third subparagraph of Article 13(1) refers, includes, in point 5, the activity of ‘passenger transport’.

III – Dispute in the main proceedings

9The dispute in the main proceedings concerns the VAT owed by the Netherlands municipality of Borsele (‘the municipality’) for December 2008 and the payments from the Netherlands VAT Compensation Fund to which the municipality is entitled in respect of the year 2008.

10In the 2008/2009 school year, the municipality organised transport to their schools for certain pupils living within the municipal area. To that end, it hired a number of transport undertakings which invoiced the municipality for the provision of those transport services, including VAT. The costs thus incurred by the municipality amounted to EUR 458231.

11The municipality collected contributions from the pupils’ parents, who had to apply to the municipality to receive the school transport service. For distances of between 6 and 20 kilometres, the amount of those contributions was determined by how much it would have cost to take public transport to cover a distance of 6 kilometres; for distances of greater than 20 kilometres, account was also taken of the parents’ income. As a result, only a third of parents paid contributions. In 2008, those contributions amounted in total to EUR 13958.

12The municipality takes the view that its school transport activities are subject to VAT. Consequently, it submits, it is, on the one hand, liable to pay VAT on the contributions collected from parents in the amount of EUR 13958, and, on the other hand, entitled to deduct the input tax represented by the VAT element of the EUR 458231 which the transport undertakings charged it for providing transport services. The net effect of this would be that the municipality would be entitled to a tax refund. The Netherlands tax administration is of the view, however, that the organisation of school transport by the municipality is not subject to VAT because it does not constitute an economic activity.

IV – Procedure before the Court

13The Hoge Raad der Nederlanden (Supreme Court of the Netherlands), before which the dispute has now been brought, considers EU VAT law to be crucial to the resolution of the dispute, and, for that reason, on 18 November 2014 referred the following questions to the Court under Article 267 TFEU:

Should Article 2(1)(c) and Article 9(1) of the VAT Directive be interpreted as meaning that, with regard to the transport of school pupils, on the basis of an arrangement as described in the present judgment, a municipality should to this extent be regarded as a taxable person within the meaning of that directive? For the purpose of answering that question, should the arrangement as a whole be considered, or should this assessment be made for each transport operation separately? If the latter is the case, should a distinction be made according to whether pupils are transported over a distance of between 6 and 20 kilometres or over a distance exceeding 20 kilometres?

14In the procedure before the Court, written observations have been submitted by the Kingdom of the Netherlands, the United Kingdom of Great Britain and Northern Ireland and the European Commission. The hearing of 26 November 2015 was also attended by the municipality.

V – Legal assessment

15By its questions, the referring court wishes to ascertain to what extent the municipality in the present case, in so far as it organised school transport in the manner described, acted as a taxable person within the meaning of Article 9(1) of the VAT Directive and is thus liable to VAT.

16According to the first subparagraph of that provision, this is subject to two conditions. First, the municipality would have to have carried out an ‘economic activity’ and, secondly, would have to have done so ‘independently’. In the present proceedings, it is only the first of those two conditions that is called into question, that is to say whether the municipality carried out an economic activity in organising school transport.

17The second subparagraph of Article 9(1) of the VAT Directive contains a legal definition of economic activity. This states that an economic activity is — for the purposes relevant in the present case ⁷ — ‘any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions’.

18At first sight, that definition seems to be very narrow for the purposes of the present case. From the point of view of its wording alone, it seems doubtful whether a municipality can be classified under one of the categories of undertakings and professions listed. The Court, however, has given the concept of ‘economic activity’ a broad interpretation in its settled case-law ⁸ and that interpretation is further confirmed in this particular case by the special rules for public activities that are contained in Article 13 of the VAT Directive.

19After all, the first subparagraph of Article 13(1) of the VAT Directive provides that bodies governed by public law — which explicitly include, inter alia, municipalities — are not to be regarded as taxable persons in respect of the activities in which they engage as public authorities. That provision thus presupposes that the State and its various bodies governed by public law are also capable of carrying out economic activities within the meaning of Article 9(1) of the VAT Directive and, therefore, of being subject to VAT. Indeed, so far as concerns the present case of publicly-performed passenger transport, this follows directly from the third subparagraph of Article 13(1) of, in conjunction with point 5 of Annex I to, the VAT Directive. These stipulate that bodies governed by public law — even where they engage in activities as public authorities under the first subparagraph of Article 13(1) of the VAT Directive — are to be regarded as taxable persons on condition that they do not provide passenger transport on such a small scale as to be negligible.

20It cannot be inferred from the latter provision, however, that a body governed by public law is always a taxable person where it engages in the activity of passenger transport. For the Court has repeatedly held that the application of the special rules for public activities contained in Article 13 of the VAT Directive presupposes that, in the particular case question, the State is actually carrying out an economic activity in the first place. ⁹ Consequently, it is only where a public body is providing passenger transport that also constitutes an economic activity within the meaning of Article 9(1) of the VAT Directive that the body itself acts as a taxable person in the supply of passenger transport as a public authority under point 5 of Annex I to, and the third subparagraph of Article 13(1) of, that directive.

21Since the latter provision would otherwise be redundant, it must in any event be concluded from it that publicly-performed passenger transport can constitute an economic activity. When it is to be assumed that it does so in a particular case, however, falls to be ascertained below.

A – Preliminary remarks on the purpose served by taxing public activities

22The present case provides an opportunity to give careful thought to this very issue of the circumstances in which a public activity constitutes an economic activity and may therefore be subject to VAT.

23As Advocate General Jacobs previously observed in a different context, the purpose of imposing VAT on services provided by the State is not readily apparent. An arrangement whereby VAT is borne by one public body only to benefit another is ultimately no more than a circuitous way of reallocating revenue at national level. ¹⁰ That is true in this case too. The advantage or disadvantage which the municipality derives from taxing its activity is at the same time disadvantageous or advantageous to the tax revenue collected by the Netherlands tax administration. From the point of view of the Netherlands State’s finances taken as a whole, therefore, it makes no difference whether the activity carried on by the municipality in the present case is subject to VAT or not.

24As is apparent by converse inference from the special rules contained in Article 13 of the VAT Directive, however, the EU legislature has decided that public activities too are in principle subject to VAT, provided that they also constitute an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive. There are two good reasons for this.

25First, the taxation of publicly-performed economic activities serves to prevent distortions of competition arising from VAT. Thus, where public bodies provide services which are in competition with services provided by private economic operators, the public bodies would enjoy a considerable competitive advantage if their activities were not subject to VAT too. Furthermore, that reason for taxing public activities is also taken into account in the special rules contained in Article 13 of the VAT Directive. Although the first subparagraph of that provision exempts from VAT economic activities in which the State engages as a public authority, the second and third subparagraphs then proceed immediately to restrict that exemption to the extent that there is a risk of distortion of competition on the relevant market.

26Secondly, economic activities carried on by the State must also be taxed in order to ensure that the target of VAT taxation is captured as comprehensively as possible. In accordance with recital 5 of the VAT Directive, VAT is to be levied ‘in as general a manner as possible’. Under the system by which it is collected, VAT is, in principle, levied ultimately only on final consumption, ¹¹ and, in accordance with case-law too, it is intended to tax only the final consumer. ¹² Where the State provides services culminating in such a final consumption of goods, that final consumption, which is satisfied by the State, would ultimately go at least partially untaxed if publicly-performed economic activities were not also potentially subject to VAT. The foregoing is also significant from the point of view of the European Union’s own resources, which are made up in part from VAT receipts. ¹³

27The fact that the levying of VAT on public activities is not self-evident, but requires special justification, is apparent from the Court’s case-law. This states that the examination of whether, in a particular case, a public or quasi-public activity constitutes an economic activity within the meaning of Article 9(1) of the VAT Directive is subject to manifestly stricter criteria than would apply in the case of an activity carried on by a private individual. ¹⁴ And with some justification. After all, such an examination should always include consideration of the two specific reasons for taxing public activities which I have just set out, so as to ensure that ‘self-taxation’ by the State makes sense in the context of individual cases too.

B – Conditions for the existence of an economic activity

28In the light of the foregoing, it must now be clarified whether, in the present case, the organisation of school transport by a municipality constitutes an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive.

29First, we must address the Commission’s objection that the municipality cannot even potentially have acted in the context of an economic activity unless it charged the pupils’ parents VAT on the organisation of school transport facilities. This, it submits, is not apparent from the information provided by the referring court.

30However, that assessment by the Commission is based on a misunderstanding. The question of whether a person has acted in the context of an economic activity must be assessed without regard to whether or not it charged VAT. On the contrary, the examination must focus rather on whether that person was right to charge or to refrain from charging VAT, as the case may be. This specifically depends, inter alia, on whether its activity is to be classified as an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive. If that were not the case, every taxable person could evade his tax obligations simply by not charging VAT to his customers.

1. Supply of services

31The Kingdom of the Netherlands calls into question the presence of an economic activity in this case on the ground, first, that, in its view, the municipality has not even supplied any services corresponding to the chargeable event defined in Article 2(1)(c) of the VAT Directive.

32The Kingdom of the Netherlands is right to say that an economic activity within the meaning of Article 9(1) of the VAT cannot be said to exist where an activity does not correspond to any of the various chargeable events defined in Article 2 of the VAT Directive. The Court’s repeated references to the chargeable events defined in Article 2 of the VAT Directive when interpreting Article 9 of that directive must also be understood in this way. ¹⁵

33It is also true that the only chargeable event potentially applicable in the present case is that provided for in Article 2(1)(c) of the VAT Directive, which stipulates that the supply of services for consideration is to be subject to VAT. Accordingly, any assumption that the municipality carries on an economic activity is subject to the essential condition that, in organising school transport, the municipality supplied services within the meaning of the definitions, applicable here, given in Articles 24 and 25 of the VAT Directive.

34On the other hand, in so far as the Kingdom of the Netherlands disputes the existence of such services because, in organising school transport, the municipality is simply fulfilling a legal obligation, reference need only be made to Article 25(c) of the VAT Directive, which states that a service subject to VAT may also be performed ‘in pursuance of the law’. For that reason, the Court has previously held that, so far as concerns any assumption as to the existence of an economic activity, the fact that an activity is conferred and regulated by law in the public interest is irrelevant. ¹⁶

35The Kingdom of the Netherlands has also argued, however, that the relationships characterising the supply of services in the present case are not as described by the referring court. In its submission, it is clear from Article 4 of the Netherlands Law on primary school education and the corresponding implementing provisions adopted by the municipality that the municipality does not provide any services to the pupils’ parents. After all, the parents have no claim against the municipality for the provision of transport for their children and do not pay the municipality anything for providing that transport. The position is rather that the municipality is entitled only to ask the parents to make a contribution towards the costs which the parents themselves incur in connection with the transport of schoolchildren.

36However, since the Court has no jurisdiction in the context of a request for a preliminary ruling to check the factual circumstances of the case before the referring court as set out in the order for reference ¹⁷ or to verify the accuracy of the interpretation of national law made by the referring court, ¹⁸ it must be assumed, for the purposes of answering the questions referred, that the relationships characterising the supply of services in question are as defined by the referring court. Accordingly, it was the municipality itself which commissioned transport services from various transport undertakings and paid them for those services. The municipality made those transport services available to the pupils’ parents at the parents’ request. The municipality was then entitled to obtain a contribution from the relevant parents in return for those services.

37The information thus provided by the referring court therefore supports the conclusion that, in organising school transport facilities, the municipality supplied services within the meaning of Article 2(1)(c) of the VAT Directive. To that extent, then, the economic nature of its activity is not in question.

2. The obtaining of income

38That said, it is the Court’s case-law that an activity is to be regarded as an economic activity only if it is carried out for the purpose of obtaining income on a continuing basis. ¹⁹

39At times, the Court has also expressed that condition as meaning that the activity must be permanent and carried out ‘in return for remuneration’. ²⁰ Even in those cases, however, the Court expressly referred to the provision contained in the second sentence of the second subparagraph of Article 9(1) of the VAT Directive, which states that the exploitation of property constitutes an economic activity where this takes place ‘for the purposes of obtaining income therefrom on a continuing basis’. For that requirement is intended to apply not only to the exploitation of property, but to all activities. ²¹

40The continuing nature of the municipality’s activity is not at issue in the present case. What is at issue is whether the municipality organised school transport for the purpose of obtaining income or in return for remuneration within the meaning of the Court’s case-law.

41The Kingdom of the Netherlands and the Commission take the view that the assumption as to the pursuit of an economic activity on the part of the municipality falls down in any event because the municipality did not organise the school transport in return for consideration. The reason for this is that the contributions which the pupils’ parents pay to the municipality are not linked to the costs of providing the service. In support of that view, they rely on a judgment concerning a dispute between the Commission and Finland, in which the Court held that a public activity was not economic because the remuneration sought for that activity was, in relation to the actual value of the services provided, only a part payment the amount of which depended on the income and assets of the recipient of those services. ²²

42The United Kingdom, on the other hand, considers that that judgment contradicts the judgment in Hotel Scandic Gåsabäck, in which the Court explicitly held that even a payment lower than the cost price is capable of supporting the assumption that a transaction has been effected for consideration. ²³

a) The link between consideration and the obtaining of income

43Those differing views show that the aforementioned judgments of the Court must first be differentiated in order to ensure that they are not misconstrued.

44A distinction must thus be drawn between the obtaining of income, as required by Article 9(1) of the VAT Directive, and the status of being effected for consideration that must attach to the supply of an individual service or the supply of goods as a condition, laid down in Article 2 of the VAT Directive, of the latter’s being subject to VAT, consideration also forming the basis of assessment to VAT under Article 73 of the VAT Directive.

45So far as concerns the determination of whether the supply of a service is effected for consideration as it must be in order to be chargeable to tax in accordance with Article 2(1)(c) of the VAT Directive, it is true that the Court stated unambiguously in the judgment in Hotel Scandic Gåsabäck that the supply of a service or the supply of goods is also effected ‘for consideration’ within the meaning of Article 2(1) of the VAT Directive where a price lower than the cost price is charged. ²⁴ Moreover, there is no reason not to subject to VAT sales at below cost price which, in certain circumstances, are necessary and reasonable in business. Nor is pricing which is in some way based on the income or assets of a customer, such as, for example, the discounts which businesses offer for students or pensioners, eligible for exemption from VAT.

46The same applies without question to the determination of consideration for the purposes of the basis of assessment to VAT. It is settled case-law that the ‘consideration obtained’, which is decisive from the point of view Article 73 of the VAT Directive, is a ‘subjective value’, that is to say the value actually received and not a value estimated according to objective criteria. ²⁵ The Court thus makes the point that VAT is always assessed by reference to the consideration obtained in the particular case in question, not by reference to the ‘objective’ value of the service or goods supplied. This also clearly follows, by converse inference, from the provision contained in Article 80 of the VAT Directive, which allows the Member States, in certain cases, to use as the basis of assessment the objective market value of the supply ²⁶ rather than the consideration actually obtained.

47So far as concerns the determination of whether an activity is to be regarded as economic within the meaning of Article 9(1) of the VAT Directive, on the other hand, there are other criteria which apply.

48It is true that, in the aforementioned judgment in Commission v Finland, the Court, in relation to Article 9(1) of the VAT Directive, examined the condition as to whether the State carried out its activity for remuneration and thus for the purpose of obtaining income by reference to the chargeable events defined in the current Article 2(1)(a) and (c) of the VAT Directive. ²⁷ However, as is apparent from the wording of the French-language version of the judgment, the language in which the judgment was deliberated, the Court does not by any means assume that the concept of consideration in those two provisions is identical. ²⁸ On the contrary, the reason the Court, when defining an economic activity, sometimes refers only to the ‘consideration’ for that activity is, as we have seen, that income must be derived from an activity in order for that activity to be economic. Income is not obtainable, however, if an activity is carried out exclusively free of charge. ²⁹

49When, in the judgment in Commission v Finland, the Court refers to ‘remuneration’ in the context of Article 9(1) of the VAT Directive, it specifically does not have in mind the exact same concept as when, in the judgment in Hotel Scandic Gåsabäck, it interprets the term ‘consideration’ as used in Article 2(1) of the VAT Directive. Even though the same outcomes may often be expected, a strict separation must be observed between the determination of any consideration for the purposes of Article 2 of the VAT Directive, on the one hand, and the question of whether any income is obtained that falls to be examined in the context of Article 9 of that directive, on the other. This also settles the issue of the alleged contradictions in the Court’s case-law. ³⁰

50In summary, it may be said that, on the one hand, it is true that, where consideration within the meaning of the chargeable events defined in Article 2(1) of the VAT Directive is not sought, no economic activity is present, since no income is obtained from that activity as the second sentence of the second subparagraph of Article 9(1) of the VAT Directive requires. On the other hand, however, as the Court has consistently held, the fact that a taxable person seeks in connection with an activity consideration within the meaning of the definition of the events chargeable to VAT is not sufficient for a finding, required by Article 9(1) of the VAT Directive, that its activity is also carried out for the purposes of obtaining income or, therefore, to support the assumption that an economic activity is present. ³¹

b) The obtaining of income in the present case

51It thus remains to be examined in the present case whether the municipality organises school transport for the purposes of obtaining income.

i) ‘Consideration’ within the meaning of the definition of the event chargeable to VAT

52First of all, that question cannot be answered in the negative just because the municipality did not seek any consideration within the meaning of Article 2(1)(c) of the VAT Directive for its activity. The opposite is the case.

53After all, it is settled case-law that a supply for consideration within the meaning of the definition of the events chargeable to tax given in Article 2(1)(a) and (c) of the VAT Directive presupposes only that there is a direct link between the supply of goods or services and the consideration actually received by the taxable person. ³² The existence of that link is predicated only on the presence of a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, ³³ as well as the reciprocal condition of performance and counter-performance. ³⁴

54In so far as a third of parents had to pay a contribution towards school transport, those requirements are clearly satisfied. Moreover, as is clear from the aforementioned judgment in Hotel Scandic Gåsabäck, the fact that the municipality sought remuneration below the cost price it had incurred does not rule out the assumption as to the presence of consideration in those cases. ³⁵ The municipality does not therefore organise school transport exclusively free of charge.

ii) The obtaining of income in the narrower sense

55As I have shown, the presence of consideration within the meaning of Article 2(1)(c) of the VAT Directive is not, however, sufficient to support the finding that an activity is carried out for the purposes of obtaining income within the meaning of the second sentence of the second subparagraph of Article 9(1) of the VAT Directive.

56The presence of an activity engaged in for the purpose of obtaining income seems questionable in the present case because, in its judgment in Commission v Finland, the Court held that public bodies operating in the field of legal aid services were not carrying on an economic activity inasmuch as they sought in return for that activity only a part payment dependent on the income and assets of the recipients of the services. The situation in the present case would appear to be similar.

57In that judgment, however, the Court had regard primarily to the fact that the payment received only ever represented part of the fees generally set by law for legal aid services. ³⁶ In the present case, on the other hand, there does not appear to be a general price for transport set by law.

58A further factor in the Court’s decision, however, appears to have been the fact that the amount of the payment was dependent on the income and assets of the recipient of the legal aid services. ³⁷ Such dependence exists at least in part in the present case, in relation to the parents’ income.

59Furthermore, in that judgment, the Court took the view that the non-economic character of the activity in question was confirmed by the fact that the income obtained covered only a fraction of the costs incurred in providing the legal aid services. ³⁸ The situation is exactly the same in the present case. In total, the municipality receives from the parents a part payment amounting to only some 3% of the costs it incurs in providing school transport.

60Although there are thus a number of unmistakeable parallels between the two cases, it none the less cannot immediately be ruled out in the present case that the purpose of the activity carried out by the municipality is — at least in part — to obtain income. For it is important in particular not to confuse the purpose of obtaining income with the intention to make a profit, which, according to case-law, is not a condition of assuming the presence of an economic activity. ³⁹

61One consideration which the Court, in the judgment in Commission v Finland, did not make explicit but which ultimately informed its decision, however, was the absence of a specific, implicit condition that must be satisfied in order for an activity to be carried out for the purpose of obtaining income within the meaning of the second sentence of the second subparagraph of Article 9(1) of the VAT Directive: market participation.

iii) Market participation

62The Court has thus previously held, in the judgment in SPÖ Landesorganisation Kärnten, that an activity was not carried out for the purpose of obtaining income within the meaning of the second sentence of the second subparagraph of Article 9(1) of the VAT Directive because the political party organisation at issue did not participate in any market in the course of its activities. ⁴⁰ In other decisions, too, it has ultimately found that public bodies do not carry out an economic activity because there was no evidence of market participation. ⁴¹

63That requirement of market participation is confirmed and supplemented by the fact that, in order to find that an economic activity is being carried out, the Court occasionally examines whether an activity is carried out in the same way as a corresponding economic activity is usually carried out. In order to do so, it must, in particular, compare the activity at issue with the usual activities of the trades and professions referred to in the first sentence of the second subparagraph of Article 9(1) of the VAT Directive. ⁴²

64There is no evidence of any such typical market participation by the municipality in the present case, however. In the course of its activity, the municipality does not offer any services on the general market in transport services. In fact, it has the appearance of itself being the final consumer of the services provided by transport undertakings, whose transport services it makes available to the parents of pupils exclusively in the public interest, even though it sometimes levies a financial contribution for so doing.

65This is borne out in particular by the fact that the municipality recovers only a small percentage of the costs of the services it receives by levying a contribution for the services it provides. This is not the typical conduct of a market participant.

66In this regard, the Court too made it clear at an early stage that there is a certain link between the level of remuneration and the existence of an economic activity. ⁴³ It was that very link which the Court also later confirmed in the judgment in Commission v Finland. ⁴⁴ After all, an activity which, under the normal system of VAT, can give rise only to tax refunds, on account of the structure of the unit costs and prices connected with that activity, does not lead to any taxation of ‘added value’ because, structurally, no such added value can be generated.

67Moreover, taxation of the municipal organisation of school transport is not necessary on either of the two grounds given above for bringing public activities within the scope of VAT. ⁴⁵

68First, notwithstanding that this, as a point of fact, must ultimately be determined by the referring court, there are no indications of any distortions of competition resulting from the non-collection of VAT. In so far as parents do not use the services of private transport undertakings to have their children taken to school because of the transport services provided by the municipality, they do so not because there is no VAT but because the municipality charges them a contribution which from the outset appears to be lower than the market prices for comparable transport services, if indeed it asks them for a contribution at all. Taxing that activity would, on the contrary, make the competitive position of private operators even worse because the permanent surplus of deductible input tax inherent in the cost/price structure would enable the municipality to reduce the parents’ contributions even further.

69Secondly, the target of VAT taxation in the form of the taxation of final consumption can be adequately captured in the present case only if the activity of the municipality is not taxed. After all, if the organisation of school transport by the municipality, for which the latter uses external transport undertakings, were subject to VAT, the deduction of input tax would mean that VAT would ultimately be charged only on the basis of assessment formed by the contributions payable by the parents. These, however, represent only a small fraction of the market price for those transport services, since, in total, the contributions make up only 3% of the costs incurred in connection with the provision of transport services by external providers. The final consumption of those transport services would end up being largely exempt from VAT. In order to prevent this from happening and to ensure that the transport services are subject to VAT at their market price, final taxation must take place at the stage the municipality receives those services. This presupposes that the organisation of school transport by the municipality does not constitute an economic activity.

iv) General or case-by-case analysis

70The United Kingdom has proposed, however, that, if a case-by-case analysis is adopted, the transport services for which the municipality receives from the parents a contribution at least approximating to a market price must in any event be regarded as constituting an economic activity.

71It is true that the requirement of market participation on the part of a public activity must in principle be assessed in relation to the activity as a whole and does not necessitate the analysis of each individual transaction. Where public activities are taxed on the ground of preventing distortions of competition, however, it may be necessary in particular cases to split an activity into its economic and non-economic components.

72For that reason, the referring court will also have to examine to what extent, in the situation at issue here, the aforementioned non-collection of VAT is capable of giving rise to a distortion of competition in relation to private transport providers which affects particular transport services. When carrying out such an examination, it is always important to take account also of the impact of the deduction of input tax.

73There would, however, be no need to differentiate between the economic and non-economic components of the municipality’s activity if it were to be found in the present case that there is only a negligible number of particular cases in which the non-taxation of the school transport organised by the municipality would distort competition. This, after all, is consistent with the criteria arising from the special rules for public activities laid down in the second and third subparagraphs of Article 13(1) of the VAT Directive. ⁴⁶

v) Interim conclusion

74First, however, it must be concluded, subject to the referring court’s examination of the competitive position, that the purpose of the organisation of school transport by the municipality is not to obtain income within the meaning of the second subparagraph of Article 9(1) of the VAT Directive.

C – Conclusion

75It must be concluded, subject once again to the referring court’s examination of the competitive position, that, in organising school transport in the present case, the municipality does not therefore carry out an economic activity within the meaning of the second subparagraph of Article 9(1) of the VAT Directive. Consequently, so far as concerns that activity, the municipality is not to be regarded as a taxable person within the meaning of the first subparagraph of Article 9(1) of the VAT Directive.

VI – Conclusion

76I therefore propose that the questions referred by the Hoge Raad der Nederlanden be answered as follows:

A municipality such as that in the dispute in the main proceedings which organises transport for school pupils by calling on the services of external transport undertakings and receives from the pupils’ parents contributions amounting to only 3% of the costs of providing the transport does not act as a taxable person within the meaning of Article 9(1) of Directive 2006/112/EC. If the referring court finds that there are distortions of competition affecting a not negligible number of particular transport services, the municipality acts as a taxable person to that extent.

¹ Original language: German.

² See, with regard to the deduction of input tax, the judgments in Gemeente Leusden and Holin Groep (C‑487/01 and C‑7/02, EU:C:2004:263), concerning the letting of playing fields, Gemeente ‘s-Hertogenbosch (C‑92/13, EU:C:2014:2188), concerning the construction of an office building, and Gemeente Woerden (C‑267/15), still pending, which also concerns the construction of a building; see also the judgments in Gemeente Emmen (C‑468/93, EU:C:1996:139), concerning the tax exemption applicable to the supply of building land, and Gemeente Vlaardingen (C‑299/11, EU:C:2012:698), concerning the taxation of the application of a sports pitch.

³ See in this regard the judgments in Hong-Kong Trade Development Council (89/81, EU:C:1982:121); Commission v Netherlands (235/85, EU:C:1987:161); University of Huddersfield (C‑223/03, EU:C:2006:124); T-Mobile Austria and Others (C‑284/04, EU:C:2007:381); Hutchison 3G and Others (C‑369/04, EU:C:2007:382); Götz (C‑408/06, EU:C:2007:789); SPÖ Landesorganisation Kärnten (C‑267/08, EU:C:2009:619); Commission v Finland (C‑246/08, EU:C:2009:671); and Saudaçor (C‑174/14, EU:C:2015:733).

⁴ OJ 2006 L 347, p. 1.

⁵ 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).

⁶ See recital 3 of the VAT Directive.

⁷ The second sentence of the second subparagraph of Article 9(1) of the VAT Directive refers in particular to the ‘exploitation of tangible or intangible property’ as an economic activity. However, the organisation of school transport at issue here cannot under any circumstances be regarded as falling under this category.

⁸ See, inter alia, the judgments in Commission v Netherlands (235/85, EU:C:1987:161, paragraph 8); Commission v Greece (C‑260/98, EU:C:2000:429, paragraph 26); University of Huddersfield (C‑223/03, EU:C:2006:124, paragraph 47); Commission v Finland (C‑246/08, EU:C:2009:671, paragraphs 34 and 37); and Saudaçor (C‑174/14, EU:C:2015:733, paragraph 31).

⁹ See the judgments in T-Mobile Austria and Others (C‑284/04, EU:C:2007:381, paragraph 48); Hutchison 3G and Others (C‑369/04, EU:C:2007:382, paragraph 42); Götz (C‑408/06, EU:C:2007:789, paragraph 15); Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 53); and Commission v Spain (C‑154/08, EU:C:2009:695, paragraph 99).

¹⁰ See the Opinion of Advocate General Jacobs in Landboden-Agrardienste (C‑384/95, EU:C:1997:433, point 12).

¹¹ See Article 1(2) of the VAT Directive.

¹² Judgments in Lebara (C‑520/10, EU:C:2012:264, paragraph 25) and Tulică and Plavoşin (C‑249/12 and C‑250/12, EU:C:2013:722, paragraph 34); see also the judgment in Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21 and the case-law cited), concerning the taxable person’s role as mere ‘tax collector for the State’, and the judgment in Profaktor Kulesza, Frankowski Jóźwiak, Orłowski (C‑188/09, EU:C:2010:454, paragraph 47 and the case-law cited), concerning the main characteristics of VAT.

¹³ See Article 2(1)(b) of Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the European Communities’ own resources (OJ 2007 L 163, p. 17).

¹⁴ See the judgments in T-Mobile Austria and Others (C‑284/04, EU:C:2007:381); Hutchison 3G and Others (C‑369/04, EU:C:2007:382); SPÖ Landesorganisation Kärnten (C‑267/08, EU:C:2009:619); and Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 53); see also the judgments in Mohr (C‑215/94, EU:C:1996:72) and Landboden-Agrardienste (C‑384/95, EU:C:1997:627), in relation to the taxation of State-subsidised services.

¹⁵ See, for example, the judgment in Saudaçor (C‑174/14, EU:C:2015:733, paragraph 31 and the case-law cited).

¹⁶ Judgments in Commission v Netherlands (235/85, EU:C:1987:161, paragraph 10) and Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 40).

¹⁷ See, inter alia, the judgment in Mecsek-Gabona (C‑273/11, EU:C:2012:547, paragraph 53).

¹⁸ See, inter alia, the judgment in Târşia (C‑69/14, EU:C:2015:662, paragraph 13 and the case-law cited).

¹⁹ See the judgment in Finanzamt Freistadt Rohrbach Urfahr (C‑219/12, EU:C:2013:413, paragraph 18).

²⁰ Judgments in Götz (C‑408/06, EU:C:2007:789, paragraph 18) and Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 37); see also the judgment in Hong-Kong Trade Development Council (89/81, EU:C:1982:121) concerning Article 4 of Second Council Directive 67/228/EEC of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes — Structure and procedures for application of the common system of value added tax (Official Journal, English Special Edition 1967, p. 16).

²¹ See the judgment in Götz (C‑408/06, EU:C:2007:789, paragraph 18); see also the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 37), which refers, in this regard, to the aforementioned judgment.

²² See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraphs 47 to 51).

²³ See the judgment in Hotel Scandic Gåsabäck (C‑412/03, EU:C:2005:47, paragraph 22).

²⁴ See the judgment in Hotel Scandic Gåsabäck (C‑412/03, EU:C:2005:47, paragraphs 22 to 24).

²⁵ See, inter alia, the judgments in Coöperatieve Aardappelenbewaarplaats (154/80, EU:C:1981:38, paragraph 13); Hotel Scandic Gåsabäck (C‑412/03, EU:C:2005:47, paragraph 21); and Tulică and Plavoşin (C‑249/12 and C‑250/12, EU:C:2013:722, paragraph 33).

²⁶ The ‘open market value’, which is defined in Article 72 of the VAT Directive.

²⁷ See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraphs 42 to 51); see also the judgment in Commission v France (C‑276/97, EU:C:2000:424, paragraphs 32 to 36).

²⁸ See the French-language version of the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 37), which, in the context of determining the existence of an economic activity, refers to an activity ‘effectuée contre une rémuneration’ (carried out in return for remuneration), which is not the same as the expression ‘à titre onéreux’ (‘for consideration’) used in Article 2(1)(a) to (c) of the VAT Directive; see also the judgment in Götz (C‑408/06, EU:C:2007:789, paragraph 18).

²⁹ See to that effect, inter alia, the judgment in Hong-Kong Trade Development Council (89/81, EU:C:1982:121, paragraph 12).

³⁰ See points 41 and 42 above.

³¹ See to that effect the judgments in Götz (C‑408/06, EU:C:2007:789, paragraph 21) and Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 38).

³² See, inter alia, the judgment in Serebryannay vek (C‑283/12, EU:C:2013:599, paragraph 37 and the case-law cited).

³³ See, inter alia, the judgments in Tolsa (C‑16/93, EU:C:1994:80, paragraph 14); MKG-Kraftfahrzeuge-Factoring (C‑305/01, EU:C:2003:377, paragraph 47); and Le Rayon d’Or (C‑151/13, EU:C:2014:185, paragraph 29).

³⁴ See, inter alia, the judgments in Tolsa (C‑16/93, EU:C:1994:80, paragraphs 13 to 20) and Fillibeck (C‑258/95, EU:C:1997:491, paragraphs 12 to 17); see also the Opinion of Advocate General Stix-Hackl in Bertelsmann (C‑380/99, EU:C:2001:129, point 32).

³⁵ See the judgment in Hotel Scandic Gåsabäck (C‑412/03, EU:C:2005:47, paragraphs 22 to 24).

³⁶ See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 47).

³⁷ See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 48).

³⁸ See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 50).

³⁹ See to that effect the judgment in Finanzamt Freistadt Rohrbach Urfahr (C‑219/12, EU:C:2013:413, paragraph 25); this is also apparent from the provisions of Article 132(1)(l) and (m) and of Article 133(a) of the VAT Directive, which are specifically directed at non-profit-making bodies.

⁴⁰ Judgment in SPÖ Landesorganisation Kärnten (C‑267/08, EU:C:2009:619, paragraphs 21 and 24).

⁴¹ Judgments in T-Mobile Austria and Others (C‑284/04, EU:C:2007:381, paragraph 42) and Hutchison 3G and Others (C‑369/04, EU:C:2007:382, paragraph 36); see also to that effect the judgment in Götz (C‑408/06, EU:C:2007:789, paragraph 19).

⁴² See the judgments in Enkler (C‑230/94, EU:C:1996:352, paragraph 28); Słaby and Others (C‑180/10 and C‑181/10, EU:C:2011:589, paragraphs 39 to 41); Finanzamt Freistadt Rohrbach Urfahr (C‑219/12, EU:C:2013:413, paragraph 21); and Trgovina Prizma (C‑331/14, EU:C:2015:456, paragraph 24).

⁴³ See the judgment in Commission v France (50/87, EU:C:1988:429, paragraph 21).

⁴⁴ See the judgment in Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 50).

⁴⁵ See points 25 and 26 above.

⁴⁶ With regard to these criteria, see in particular the judgment in Isle of Wight Council and Others (C‑288/07, EU:C:2008:505).