C-573/22 Foreningen C and Others

JUDGMENT OF THE COURT (Fifth Chamber)

19 December 2024 ( *1 )

(Reference for a preliminary ruling – Common system of value added tax – Directive 2006/112/EC – Article 370 – Point 2 of Part A of Annex X – Derogation – Scope – Activities of a public radio and television body financed by a compulsory fee paid by the owners of devices capable of receiving radio and television broadcasts)

In Case C‑573/22,

REQUEST for a preliminary ruling under Article 267 TFEU from the Østre Landsret (High Court of Eastern Denmark, Denmark) made by decision of 8 July 2022, received at the Court on 26 August 2022, in the proceedings

A,

B,

Foreningen C

v

Skatteministeriet,

THE COURT (Fifth Chamber),

composed of I. Jarukaitis, President of the Fourth Chamber, acting as President of the Fifth Chamber, D. Gratsias (Rapporteur) and E. Regan Judges,

Advocate General: M. Szpunar,

Registrar: I. Illéssy, Administrator,

having regard to the written procedure and further to the hearing on 14 March 2024,

after considering the observations submitted on behalf of:

A, by T. Gønge, T. Kári Kristjánsson and J. Nymand Hounsgaard, advokater,

B, by C. Bachmann and P. Hansen, advokater,

Foreningen C, by C. Holberg, advokat,

the Danish Government, by D. Elkan and C. Maertens, acting as Agents, and by B. Søes Petersen, advokat,

the French Government, by R. Bénard, A. Daniel and O. Duprat-Mazaré, acting as Agents,

the European Commission, by J. Jokubauskaitė and U. Nielsen, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 12 September 2024,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of Article 2(1)(c) and Article 370 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’), read in conjunction with point 2 of Part A of Annex X to that directive.

2The request has been made in proceedings between A, B and Foreningen C, on the one hand, and the Skatteministeriet (Ministry of Taxation, Denmark), on the other, concerning an application by the former for reimbursement of value added tax (VAT) on the fee payable by owners of devices capable of receiving audiovisual broadcasts.

Legal context

European Union law

3Article 1(1) of the VAT Directive states:

‘This Directive establishes the common system of [VAT].’

4Article 2(1)(c) of that directive provides that the supply of services for consideration within the territory of a Member State by a taxable person acting as such is to be subject to VAT.

5Article 370 of that directive provides:

‘Member States which, at 1 January 1978, taxed the transactions listed in Annex X, Part A, may continue to tax those transactions.’

6Article 378(1) of that directive states:

‘Austria may continue to tax the transactions listed in point (2) of Annex X, Part A.’

7Point 2 of Part A of Annex X to the VAT Directive refers to ‘the activities of public radio and television bodies other than those of a commercial nature’.

Danish law

8From 1926, a fee intended to finance the institution known today as ‘Danmarks Radio (DR)’ was levied on the possession of radios in Denmark. From 1951, once DR began to broadcast television programmes, that fee was also levied in respect of television sets. Pursuant to lov nr. 215 om radiospredning (Law No 215 on Broadcasting) of 11 June 1959, that fee was transformed into an ‘audiovisual fee’, payable in the event of possession of a radio or television set. The latter law was repealed and replaced by lov nr. 421 om radio- og fjernsynsvirksomhed (Law No 421 on Radio and Television Activities) of 15 June 1973, which maintained the audiovisual fee, from then classified as a ‘fee for the use of radio and television sets’.

9Under lov nr. 589 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 589 amending the Law on Radio and Television Activities) of 19 December 1985, the ‘exclusive right’ to broadcast radio and television programmes to the general public, held by DR, was converted into a simple ‘right’. In addition, pursuant to bekendtgørelse nr. 640 (Decree No 640) of 20 December 1985, the name of the fee referred to in the preceding paragraph was changed to a ‘fee on radio and television (audiovisual licence fee)’.

10By lov nr. 335 om ændring af lov om radio-og fjernsynsvirksomhed (Law No 335 amending the Law on Radio and Television Activities) of 4 June 1986, a new public television channel called TV2, financed in part by revenue from the audiovisual licence fee was also authorised to broadcast audiovisual programmes to the general public.

11Bekendtgørelse nr. 15 (Decree No 15) of 11 January 1995 stated that the audiovisual licence fee was payable irrespective of whether the reception apparatus concerned was used and irrespective of the way in which the broadcasts were received, for as long as that apparatus was capable of playing audiovisual programmes.

12Lov nr. 1208 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 1208 amending the Law on Radio and Television Activities) of 27 December 1996 provided that the proceeds of the audiovisual licence fee could, in accordance with the detailed rules laid down by the competent minister, be used, in addition to financing DR and TV 2, for ‘any other media-related purposes’.

13Lov nr. 1569 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 1569 amending the Law on Radio and Television Activities) of 20 December 2006 replaced the audiovisual licence fee with a ‘media licence fee’, covering ‘devices capable of receiving and playing audiovisual programmes or services broadcast to the public’, including radios.

14Lov nr. 513 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 513 amending the Law on Radio and Television Activities) of 27 May 2013 abolished the media licence fee in so far as it related to radios. Lov nr. 1517 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 1517 amending the Law on Radio and Television Activities) of 27 December 2014 abolished the media licence fee for commercial enterprises and maintained it only for private households. Finally, lov nr. 1548 om ændring af lov om radio- og fjernsynsvirksomhed (Law No 1548 amending the Law on Radio and Television Activities) of 18 December 2018 provided for the gradual abolition, over a period of three years from 2019 to 2021, of the media licence fee, with the result that that fee was entirely abolished on 1 January 2022.

15Since the introduction of VAT in Denmark in 1967, Danish VAT legislation has provided that ‘radio and television broadcasts’ are subject to VAT. Accordingly, the fee referred to in paragraphs 8 to 14 above was subject to VAT until it was abolished.

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

16A and B, who are natural persons, and Foreningen C, which is made up of a group of natural persons bringing a collective action, brought actions before the Østre Landsret (High Court of Eastern Denmark, Denmark), the referring court, against the Ministry of Taxation for reimbursement of the sums which they had paid by way of VAT on the media licence fee for the years 2007 to 2017. In support of their actions, they submit, in essence, that the possibility for Denmark to apply Article 370 of the VAT Directive in order to make that fee subject to VAT presupposes the existence of a supply of services for consideration, within the meaning of Article 2(1)(c) of that directive, which, in the present case, is lacking.

17For its part, the Ministry of Taxation submits that Article 370 of the VAT Directive constitutes a special provision authorising the Kingdom of Denmark to maintain the national tax system that was in force on 1 January 1978, irrespective of the scope of the harmonised general system of VAT.

18The referring court is of the view that, in the light of the guidance provided by the judgment of 22 June 2016, Český rozhlas (C‑11/15, EU:C:2016:470), the media licence fee does not constitute consideration for the supply of services for consideration within the meaning of Article 2(1)(c) of the VAT Directive. That court therefore considers that the main legal question raised by the case before it is whether Article 370 of the VAT Directive must be interpreted as allowing Member States to charge VAT on a fee that does not constitute such consideration and the collection of which depends only on the mere possession of a device that receives radio or television broadcasts.

19If that question is answered in the affirmative, the referring court has doubts as to the applicability of Article 370 of the VAT Directive to the media licence fee in the light of the amendments to the national legislation concerning that fee during the period covered by the dispute in the main proceedings. In the first place, the fee levied on the basis of possession of radio and television sets was replaced by a fee charged for the possession of any device capable of receiving audiovisual programmes and services directly. In the second place, that legislation made it possible to allocate, at the discretion of the competent minister, a small part of the proceeds of the media licence fee to the financing of, first, broadcasters which, despite not being public broadcasters, carried out a public service activity and were subject to constraints similar to those to which the public broadcasting bodies were subject and, second, the Danske Filminstitut (Danish Film Institute), which is a public institution the objective of which is to promote cinematographic art and culture in Denmark, and a film school for children and young people, managed by a non-profit foundation created by public radio and television bodies in collaboration with other stakeholders.

20In those circumstances, the Østre Landsret (High Court of Eastern Denmark) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

Is Article 370 [of the VAT Directive], read in conjunction with point 2 of [Part A of Annex X to that directive], to be interpreted as permitting the Member States concerned to impose VAT on a statutory media licence fee to finance the non-commercial activities of public radio and television bodies, notwithstanding the absence of a “supply of services for consideration” within the meaning of Article 2(1) of that directive?

If Question 1 is answered in the affirmative, the Court of Justice is asked to answer the following questions referred for a preliminary ruling:

Is Article 370 [of the VAT Directive], read in conjunction with point 2 of [Part A of Annex X to that directive], to be interpreted as meaning that a Member State’s option to impose VAT on a statutory media licence fee as specified in Question 1 may be maintained if, after the entry into force, on 1 January 1978, 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 Member State has altered the licensing system from charging a licence fee for possessing radio and television equipment to charging a licence fee for possessing any device which can receive audiovisual programmes and services directly, including smartphones, computers, [and so forth]?

Is Article 370 [of the VAT Directive], read in conjunction with point 2 of [Part A of Annex X to that directive], to be interpreted as meaning that a Member State’s option to impose VAT on a statutory media licence fee as specified in Question 1 may be maintained if, after the entry into force, on 1 January 1978, of [the Sixth Directive 77/388], the Member State has altered the licensing system so that a [small] proportion of the licence fee resources will, at the discretion of the Minister for Culture, be used to finance (i) radio and television bodies which receive public subsidies but are not themselves public, and (ii) media and film [undertakings] which contribute to but do not themselves carry out radio and television activities?’

Procedure before the Court

21By decision of the President of the Court of 20 January 2023, the proceedings in the present case were stayed pending delivery of the judgment of 26 October 2023, GIS (C‑249/22, EU:C:2023:813). They were resumed following delivery of the judgment in that case.

Consideration of the questions referred

The first question

22By its first question, the referring court asks, in essence, whether Article 2(1)(c) and Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee paid by any owner of equipment capable of receiving broadcasting programmes from continuing to tax those activities, irrespective of whether those activities are covered by the concept of ‘supply of services for consideration’ within the meaning of Article 2(1)(c) of that directive.

23It should be noted that, under Article 2(1)(c) of the VAT Directive, which appears under Title I of that directive entitled ‘Subject matter and scope’, the supply of services for consideration within the territory of a Member State by a taxable person acting as such is to be subject to VAT.

24Accordingly, where an activity is classified as a transaction effected ‘for consideration’ within the meaning of that provision, it falls, on that basis, within the scope of the VAT Directive. By contrast, an activity which is not classified as such does not fall within the scope of that directive (judgment of 26 October 2023, GIS, C‑249/22, EU:C:2023:813, paragraph 34 and the case-law cited).

25However, Article 370 of the VAT Directive, read in conjunction with Part A of Annex X to that directive, allows Member States which, on 1 January 1978, taxed the activities of public radio and television bodies other than those of a commercial nature, to derogate from Article 2(1)(c) of that directive by giving them the option of continuing to tax those activities.

26In addition, it should be noted that that derogation is, in essence, identical to that provided for in favour of the Republic of Austria in Article 378(1) of the VAT Directive.

27In that regard, the Court has already held, in essence, in paragraphs 36, 37, 42 and 51 of the judgment of 26 October 2023, GIS (C‑249/22, EU:C:2023:813), that Article 378(1) of the VAT Directive allows the Republic of Austria to derogate, inter alia, from the provisions of Article 2(1)(c) of that directive, by maintaining a system of taxation of the activities concerned already in existence, provided that the arrangements for that taxation remain essentially unchanged. That reflects the gradual and still partial harmonisation of national VAT legislation. Moreover, it is in the nature of a provision such as Article 378(1) of that directive to introduce exceptions to the scope of the rules of which it forms part. The taxation permitted by that provision is not harmonised taxation which forms an integral part of the VAT system as arranged by that directive. Rather, the option provided for in that provision allows that Member State to maintain its legislation on the taxation of the services concerned, without the differences that may result between it and other Member States being contrary to EU law.

28Relying, in particular, on those grounds, the Court held, in paragraph 52 of the judgment of 26 October 2023, GIS (C‑249/22, EU:C:2023:813), that Article 2(1)(c) and Article 378(1) of the VAT Directive had to be interpreted as not precluding the Republic of Austria from imposing VAT on a public broadcasting activity, financed by a compulsory statutory fee and paid by any person operating a broadcast receiver in a building within the terrestrial broadcasting area of the public broadcasting body concerned, irrespective of whether the public broadcasting activity concerned is covered by the concept of a ‘supply of services for consideration’ within the meaning of Article 2(1)(c) of the VAT Directive.

29In the light of the finding set out in paragraph 26 of the present judgment, a similar interpretation must be given to Article 370 of the VAT Directive.

30As a result, the answer to the first question is that Article 2(1)(c) and Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as not precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee paid by any owner of equipment capable of receiving broadcasting programmes from continuing to tax those activities, irrespective of whether those activities are covered by the concept of ‘supply of services for consideration’ within the meaning of Article 2(1)(c) of that directive.

The second question

31By its second question, the referring court asks, in essence, whether Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee paid by any person who owned a radio or television set, from continuing to tax those activities where the legislation relating to that fee was amended after that date so that that fee is levied for the possession of any device capable of receiving broadcasting programmes, including a smartphone or computer.

32According to their wording, those provisions authorise Member States to continue to tax ‘the activities of public radio and television bodies other than those of a commercial nature’, if, on 1 January 1978, those States subjected those activities to VAT.

33Therefore, according to the wording of those provisions, the Member States concerned by them are authorised only to maintain an existing system of taxation of the abovementioned activities and not to introduce new taxation of those activities, which means that the arrangements for taxing those activities, in force since 1 January 1978, must have remained essentially unchanged in order for that taxation to continue to be covered by the derogation provided for in Article 370 of the VAT Directive (see, by analogy, judgment of 26 October 2023, GIS, C‑249/22, EU:C:2023:813, paragraphs 42 and 43).

34An amendment to the arrangements for that taxation which merely takes account of technological innovations which have occurred since 1 January 1978, without altering the chargeable event giving rise to the obligation to pay the fee intended to finance a public broadcasting activity, does not have the effect of excluding the application of a derogating provision, such as Article 370 of the VAT Directive (see, to that effect, judgment of 26 October 2023, GIS, C‑249/22, EU:C:2023:813, paragraph 45).

35That is the case of an amendment to those arrangements, such as the one in question in the main proceedings, which has the effect of linking the obligation to pay a fee intended to finance public broadcasting activities to the possession not only of a radio or a television set, but also of any device capable of receiving radio programmes, including smartphones or computers. Such an amendment reflects technological developments that have taken place since the derogation in question was introduced.

36Furthermore, as the Advocate General observed, in essence, in points 27 to 29 of his Opinion, the considerations set out in the preceding paragraph of the present judgment are not called into question either by the fact that the widening of the category of devices the possession of which entails an obligation to pay a fee intended to finance public broadcasting activities may have involved a concurrent enlargement of the persons subject to that fee, or by the fact that the reception of radio or television programmes may be classified as ancillary functions of devices such as smartphones or computers.

37First, Article 370 of the VAT Directive does not require that the number or volume of transactions taxed by a Member State on 1 January 1978 remain unchanged. Indeed, it should be observed that, even without any alteration as to the nature of the equipment the possession of which entails an obligation to pay a fee intended to finance public broadcasting activities, the number of persons required to pay that fee was likely to increase in line with the increase in the number of radios and television sets in peoples’ possession, owing to the greater availability and reduction in the purchase price of such equipment.

38Second, in so far as the chargeable event for a fee such as the one in question in the main proceedings is not linked to the use of a public broadcasting service by the persons subject to that obligation, but only to the possession of a device capable of receiving the programmes of a broadcasting organisation, it is irrelevant that some of those devices, such as smartphones or computers, also fulfil other functions which may, in some circumstances, be regarded as their principal functions.

39Moreover, it should be noted, in that regard, that radio and television receivers may also be used for functions other than the reception of programmes from public broadcasting bodies, such as, for example, the reception of commercial radio or television programmes or for playing discs or other digital media (see, to that effect, judgment of 22 June 2016, Český rozhlas, C‑11/15, EU:C:2016:470, paragraph 26).

40In the light of all of the foregoing considerations, the answer to the second question is that Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as not precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee paid by any person who owned a radio or television set, from continuing to tax those activities where the legislation relating to that fee was amended after that date so that that fee is levied for the possession of any device capable of receiving broadcasting programmes, including a smartphone or computer.

The third question

41It should be noted, as a preliminary point, that, although, according to its wording, the third question concerns the effect on the applicability of Article 370 of the VAT Directive, inter alia, of the fact that a small part of a fee such as the one in question in the main proceedings is used to finance ‘media and film [undertakings] which contribute to but do not themselves carry out radio and television activities’, it is apparent from the information provided by the referring court, summarised in paragraph 19 of the present judgment, that that court is concerned, more specifically, with such undertakings which are public entities or have been created by public broadcasting bodies, in some circumstances together with other stakeholders.

42Therefore, by its third question, the referring court asks, in essence, whether Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee from continuing to tax those activities where the legislation relating to that fee was amended after that date so as to allow a small part of the revenue from that fee to be used to finance, first, broadcasters which, despite not being public bodies, carry out public broadcasting activities and, second, media or film undertakings which are public bodies or have been set up by public broadcasting bodies and which contribute to broadcasting activities, without carrying out those activities themselves.

43In that regard, it should be recalled that, as is apparent, in essence, from paragraphs 32 and 33 of the present judgment, Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, authorises Member States only to maintain a system of taxation of non-commercial activities of public radio and television bodies which existed on the date laid down in Article 370, which means that the arrangements for taxing those activities must have remained essentially unchanged.

44It follows that a fee, such as the one in question in the main proceedings, could be subject to VAT under Article 370 of the VAT Directive, during the period concerned by the dispute in the main proceedings, only if it was used to finance the activities of those bodies (see, by analogy, judgment of 26 October 2023, GIS, C‑249/22, EU:C:2023:813, paragraphs 46 to 49).

45However, it cannot be inferred from this that Article 370 of the VAT Directive precludes the taxation of a fee such as the one in question in the main proceedings merely because the revenue from that fee is not paid in full to the public radio and television bodies.

46In the present case, it is apparent from the request for a preliminary ruling that an amendment, subsequent to 1 January 1978, to the national legislation which introduced the fee in question in the main proceedings made it possible to allocate a small part of the revenue from that fee to the financing of entities other than public radio and television bodies. In particular, that part of the revenue was allocated, first, to a radio and television organisation which, although a private entity, had a remit like the one fulfilled by public media, was subject to legal constraints similar to those of the public radio and television bodies and was financed for the most part by the revenue from that fee, second, to an entity the role of which was to provide financial support for the production of films and, third, to film schools for children and young people, managed by a foundation whose founders include, among others, public radio and television bodies.

47The fact that a small proportion of a fee such as the one in question in the main proceedings is paid to other public bodies or to entities created by the public broadcasting bodies themselves, in some circumstances together with other stakeholders, in order to finance activities, such as film production, situated upstream of and closely linked to broadcasting activities, does not support the conclusion that that fee has ceased to be used to finance the activities of the public broadcasting bodies.

48As the Advocate General observed, in essence, in points 37 and 38 of his Opinion, Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, does not prescribe the legal form which the public bodies concerned must take, nor does it apply solely to the broadcasting activities of those bodies, since the second of those provisions does not use the term ‘broadcasters’, but rather the broader term ‘bodies’. It follows that those provisions must be interpreted as not precluding other types of activities, such as those listed in the preceding paragraph of the present judgment, from being covered by the derogation laid down in those provisions, so long as those activities come within the remit of public radio and television bodies and are financed by a compulsory fee, such as the fee in question in the main proceedings.

49In the light of all the foregoing, the answer to the third question is that Article 370 of the VAT Directive, read in conjunction with point 2 of Part A of Annex X to that directive, must be interpreted as not precluding a Member State which, on 1 January 1978, imposed VAT on public broadcasting activities financed by a compulsory statutory fee, from continuing to tax those activities where the legislation regarding that fee was amended after that date so as to allow a small part of the revenue from that fee to be used to finance, first, broadcasters which, despite not being public bodies, carry out public broadcasting activities and, second, media or film undertakings which are public bodies or have been set up by public broadcasting bodies and which contribute to broadcasting activities, without carrying out those activities themselves.

Costs

50Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring 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 2(1)(c) and Article 370 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with point 2 of Part A of Annex X to that directive,

must be interpreted as not precluding a Member State which, on 1 January 1978, imposed value added tax on public broadcasting activities financed by a compulsory statutory fee paid by any owner of equipment capable of receiving broadcasting programmes from continuing to tax those activities, irrespective of whether those activities are covered by the concept of ‘supply of services for consideration’ within the meaning of Article 2(1)(c) of that directive.

Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive,

must be interpreted as not precluding a Member State which, on 1 January 1978, imposed value added tax on public broadcasting activities financed by a compulsory statutory fee paid by any person who owned a radio or television set, from continuing to tax those activities where the legislation relating to that fee was amended after that date so that that fee is levied for the possession of any device capable of receiving broadcasting programmes, including a smartphone or computer.

Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive,

must be interpreted as not precluding a Member State which, on 1 January 1978, imposed value added tax on public broadcasting activities financed by a compulsory statutory fee, from continuing to tax those activities where the legislation on that fee was amended after that date so as to allow a small part of the revenue from that fee to be used to finance, first, broadcasters which, despite not being public bodies, carry out public broadcasting activities and, second, media or film undertakings which are public bodies or have been set up by public broadcasting bodies and which contribute to broadcasting activities, without carrying out those activities themselves.

Signatures

[Signatures]

( *1 ) Language of the case: Danish.

OPINION OF ADVOCATE GENERAL

SZPUNAR

delivered on 12 September 2024 ¹

(Reference for a preliminary ruling – Common system of value added tax – Directive 2006/112/EC – Article 370 and point 2 of Part A of Annex X – Derogation – Scope – Activities of public radio and television bodies financed by a compulsory fee paid by owners of equipment for the reception of radio and television broadcasts)

Introduction

1Denmark’s radio and television licence fee lasted for almost a century. Introduced in 1926 as a radio licence fee, it subsequently underwent many transformations; at the time when it was finally abolished in 2022, it was referred to as the media licence (‘medielicens’) fee.

2That fee, however, remains controversial from at least one point of view, namely the lawfulness of charging value added tax (VAT) on it. After VAT was introduced in Denmark in 1967, it was levied on amounts paid in respect of the radio and television licence fee.

3From the point of view of EU law, this was justified under a derogation from the common VAT rules similar to the derogation examined by the Court in the case that gave rise to the judgment in GIS. ² In the present case, however, the question arises as to whether, in view of the changes that the Danish radio and television licence fee has undergone during its existence, the conclusions of that judgment can be fully applied to it. Indeed, those changes mean that it is not possible to apply the abovementioned judgment directly to this case, and some clarifications will be necessary as to its effects in the circumstances of the present case.

Legislative framework

European Union law

4Article 2(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ³ provides:

‘The following transactions shall be subject to VAT:

…

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

5Article 132(1)(q) of that directive provides:

‘Member States shall exempt the following transactions:

…

the activities, other than those of a commercial nature, carried out by public radio and television bodies’.

6Article 370 of that directive provides:

‘Member States which, at 1 January 1978, taxed the transactions listed in Annex X, Part A, may continue to tax those transactions.’

7Finally, Annex X to Directive 2006/112, Part A, entitled ‘Transactions which Member States may continue to tax’, lists in point 2 ‘the activities of public radio and television bodies other than those of a commercial nature’.

Danish law

8The radio licence fee was introduced into Danish law in 1926, and in 1951 it became the radio and television licence fee. Under lov nr. 421 om radio- og fjernsynsvirksomhed (Law No 421 on Radio and Television Activities) of 15 June 1973, it was defined as a ‘fee for the use of radio and television sets’.

9Under the Law of 27 December 1996 amending the Law on Radio and Television Activities, revenue from that fee could be used to finance not only the activities of public radio and television broadcasters, but also ‘any other media-related purposes’.

10By way of another amendment to the Law on Radio and Television Activities, dated 20 December 2006, the audiovisual part of the licence fee was renamed the ‘media licence fee’, which was levied on any device ‘capable of receiving and playing audiovisual programmes or services broadcast to the public’.

11The licence fee started to be phased out from 2013, before being finally abolished on 1 January 2022 under the Law of 18 December 2018 amending the Law on Radio and Television Activities.

Facts, procedure and questions referred

12A and B (individuals) and Foreningen C (a group of individuals bringing a class action) brought proceedings before the referring court against the Skatteministeriet (Ministry of Finance, Denmark) for reimbursement of the amounts they paid as VAT on the media licence fee for the years 2007–2017. Those actions are primarily based on the claim that since the media licence fee does not constitute remuneration for a supply of services for consideration within the meaning of Article 2(1)(c) of Directive 2006/112, VAT on that licence fee is charged in breach of the directive and should be reimbursed. As an ancillary argument, the applicants in the main proceedings claim that even if the collection of VAT on the media licence fee were considered legal in principle under Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, the changes to the licensing system that occurred after 1 January 1978 fundamentally altered its nature, making it impossible to invoke the standstill clause contained in that provision.

13The referring court regards it as indisputable that the media licence fee does not constitute remuneration for a supply of services for consideration within the meaning of Article 2(1)(c) of Directive 2006/112, in accordance with the findings of the judgment in Český rozhlas. ⁴ However, the referring court has doubts about the applicability of Article 370 of that directive.

14In view of the above, the Østre Landsret (High Court of Eastern Denmark, Denmark) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

Is Article 370 [of Directive 2006/112], read in conjunction with point 2 of [Part A of Annex X to the directive], to be interpreted as permitting the Member States concerned to impose VAT on a statutory media licence fee to finance the non-commercial activities of public radio and television bodies, notwithstanding the absence of a “supply of services for consideration” within the meaning of Article 2(1) of that directive?

If Question 1 is answered in the affirmative, the Court of Justice is asked to answer the following questions referred for a preliminary ruling:

Is Article 370 [of Directive 2006/112], read in conjunction with point 2 of [Part A of Annex X to the directive], to be interpreted as meaning that a Member State’s option to impose VAT on a statutory media licence fee as specified in Question 1 may be maintained if, after the entry into force, on 1 January 1978, 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 [ ⁵], the Member State has altered the licensing system from charging a licence fee for possessing radio and television equipment to charging a licence fee for possessing any device which can receive audiovisual programmes and services directly, including smartphones, computers, [and so forth]?

Is Article 370 [of Directive 2006/112], read in conjunction with point 2 of [Part A of Annex X to the directive], to be interpreted as meaning that a Member State’s option to impose VAT on a statutory media licence fee as specified in Question 1 may be maintained if, after the entry into force, on 1 January 1978, of [Directive 77/388], the Member State has altered the licensing system so that a smaller proportion of the licence fee resources will, at the discretion of the Minister for Culture, be used to finance (i) radio and television bodies which receive public subsidies but are not themselves public, and (ii) media and film organisations which contribute to but do not themselves carry out radio and television activities?’

15The request for a preliminary ruling was lodged with the Court on 26 August 2022. Written observations were submitted by the applicants in the main proceedings, the Danish and French Governments, and the European Commission. Those parties were represented at the hearing held on 14 March 2024.

16On 26 October 2023, the Court delivered the judgment in GIS.

Analysis

17The referring court referred three questions to the Court in the present case.

18By its first question, the referring court essentially seeks to determine whether Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, should be interpreted as permitting VAT to be charged on a fee intended to finance the activities of public radio and television bodies, such as the Danish media licence fee, even though that fee does not constitute remuneration for a supply of services for consideration within the meaning of Article 2(1)(c) of that directive.

19In my opinion, the answer to that question follows directly from the judgment in GIS. Although the judgment in GIS concerns Article 378(1) of Directive 2006/112, that provision introduces a derogation for Austria that is essentially identical to the derogation contained in Article 370 of the directive, and is applicable to countries that were members of the European Community before 1 January 1978. Additionally, Article 378 of the directive concerns the activities specified in point 2 of Part A of Annex X to the directive, and therefore the same type of activity as the activity at issue in the present case. Moreover, the Danish media licence fee is a fee of the same type as the fee referred to in the operative part of the judgment in GIS. Therefore, the interpretation of Article 378 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, adopted in the judgment in GIS can be applied directly in the context of the first question referred in the present case.

20In view of the above, and in accordance with the Court’s wishes, I shall limit my considerations in this Opinion, as well as the proposed answers, to the two remaining questions referred.

Second question referred

21By its second question, the referring court essentially seeks to determine whether Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, is to be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that the fee is levied not only in connection with the ownership of a radio or television set, as was originally the case, but also in connection with the ownership of any other device that can be used to receive those programmes, such as smartphones, computers, and so forth, which potentially increases the number of entities obliged to pay the fee.

22To my mind, the answer to that question must be affirmative.

23It follows, by analogy, from the judgment in GIS, that the relevant provision of Directive 2006/112 authorises the Member States indicated therein, which include Denmark, ⁶ to maintain in force the system of taxation of the activities of public radio and television bodies that existed on 1 January 1978, with the proviso that the conditions of that taxation should remain essentially unchanged. ⁷ This does not, however, preclude the introduction of changes to that system which are limited to taking account of the technological innovations that have occurred in the meantime, without altering the event giving rise to the obligation to pay the fee to finance that activity. ⁸

24Those principles derive from the case-law of the Court, according to which, in essence, when applying the standstill clauses included in Directive 2006/112, ⁹ Member States are not entitled to extend the scope of derogations from the general rules of the common VAT system but may adapt their national legislation to new circumstances. ¹⁰

25The change to the Danish media licence fee system discussed in this analysis of the second question referred consisted in extending the obligation to pay the fee, which originally applied only to owners of radio and television sets, to owners of other devices that can be used to receive radio and television programmes, such as computers, smartphones, and so forth. That change was associated with technological developments that allowed radio and television programmes to be received using devices other than dedicated receivers.

26However, that change did not extend the scope of the derogation established by Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive. That provision allows the taxation of the activities of public radio and television bodies to remain in force. Under a system such as the Danish system of taxation, this is done by charging VAT on the statutory fee that finances the operations of those public radio and television bodies. The fee at issue in the present case, that is to say, the media licence fee, is used to finance the activities of public radio and television bodies irrespective of the number of entities obliged to pay it. Thus, from the point of view of the relevant provisions of Directive 2006/112, the situation remains unchanged, since from that point of view, it is the purpose of the revenue from the fee that is relevant rather than its source.

27That conclusion is not changed by the circumstance pointed out by the referring court, namely that the expansion of the category of devices giving rise to the obligation to pay the media licence fee has at the same time led to an increase in the number of entities obliged to pay the fee. Indeed, Article 370 of Directive 2006/112 does not contain any requirement that the actual tax base allowed under that provision must remain unchanged.

28The argument raised by the applicants in the main proceedings and by the Commission that, unlike in the case of radio and television sets, the reception of radio and television programmes is not the main function of devices such as computers and smartphones is also misplaced.

29In the judgment in Český rozhlas, the Court held that a fee similar to the media licence fee at issue in the present case does not constitute remuneration for the supply of services by public broadcasters, on the grounds that, inter alia, the obligation to pay is linked to the possession of a specific device irrespective of the manner in which it is actually used. ¹¹ Therefore, taxation under Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, is not harmonised taxation that is an integral part of the common VAT system, but constitutes a derogation from the application of that system. ¹² Thus, for taxation on that basis to be lawful, it is not necessary for there to be any connection between the manner of using the devices, the possession of which gives rise to the obligation to pay the amounts constituting the basis for the taxation, and the taxed activity, that is to say, the activity of public radio and television bodies.

30In view of the foregoing, I propose that the answer to the second question referred for a preliminary ruling should be that Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, is to be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that the fee is levied not only in connection with the ownership of a radio or television set, as was originally the case, but also in connection with the ownership of any other device that can be used to receive those programmes, such as smartphones, computers, and so forth, even if this potentially increases the number of entities obliged to pay that fee.

Third question referred

31By its third question, the referring court essentially seeks to determine whether Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, is to be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that a small portion of the revenue from that fee may be used to finance the activities of entities other than public radio and television broadcasters.

32According to the information contained in the request for a preliminary ruling, in the years 2007–2017 a small portion of media licence fee revenue (not exceeding 5%) was used to finance entities other than public radio and television broadcasters. Those entities included, in particular, one radio broadcaster, which, although it is a private entity, has a public service remit, is subject to similar legal restrictions as public broadcasters, and is largely financed by revenue from the media licence fee; the Danske Filminstitut (Danish Film Institute), whose role is to financially support film production in cooperation with public radio and television broadcasters; and also a film school for children and young people run by a foundation whose founders include, among others, public radio and television broadcasters.

33It is in this context that the third question should be analysed, as the media licence fee was finally abolished on 1 January 2022, and thus it will not be possible to allocate the revenues from the fee for purposes other than those indicated above. Therefore, this is not an abstract evaluation of the provisions of Danish law on the media licence fee, but an evaluation of those provisions in the light of their actual application during the period covered by the dispute in the main proceedings.

34Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, allows the Member States indicated therein to continue to tax the activities, other than those of a commercial nature, carried out by public radio and television bodies. The origin of that provision, as discussed in detail by the referring court in its request for a preliminary ruling, indicates that its purpose is to allow the taxation of the activities of radio and television bodies financed by a statutory fee such as a media licence fee by those Member States which, prior to the entry into force of Directive 77/388, regarded such activities as taxable, even though they were not performed for consideration.

35The provision should be interpreted in the light of that purpose and in a manner that ensures its effectiveness. ¹³ On this interpretation it must, in my opinion, be recognised that the notion of ‘activities, other than those of a commercial nature, carried out by public radio and television bodies’ within the meaning of the relevant provision of Directive 2006/112 is identical to the notion of activities financed by a statutory fee such as the media licence fee at issue in the present case. Indeed, the essence of the derogation provided for in that provision is to allow Member States to charge VAT on such a fee. ¹⁴

36From that point of view, the fact that a small portion of the revenue from the media licence fee was used to finance, first, a broadcaster which, albeit in the form of a private entity, had a remit similar to that of public broadcasters and was largely financed from that revenue, and, secondly, entities which, although they are not broadcasters, contribute in other ways to fulfilling the remit of public radio and television bodies and are organisationally and functionally linked to those bodies, does not alter the national regulation in question in a manner that would be contrary to the purpose of Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive.

37Nor does that interpretation contradict the literal wording of the relevant provision of Directive 2006/112. While that provision allows the activities of public radio and television bodies to be taxed, it does not specify the activities in question. In particular, it does not restrict those activities to broadcasting only and does not use the term ‘broadcasters’, but ‘bodies’. Accordingly, in my opinion, there is nothing to prevent other activities, such as film production or educational activities, from being included in the scope of that provision, so long as those activities fall within the remit of public radio and television bodies and are financed by a statutory fee such as the media licence fee at issue in the present case.

38Nor does the provision of Directive 2006/112 in question determine the legal form or ownership structure of those bodies. As the Danish Government rightly notes, in the analogous case of the exemption regulated by Article 132(1)(a) of that directive, the Court allowed an interpretation of the concept of ‘public postal services’ based on the public nature of the services offered by those providers rather than on their formal classification as bodies governed by public law or under public ownership. ¹⁵ In my opinion, a similar approach can be taken in the present case, in which, as the referring court points out, some of the tasks of public radio and television bodies have been entrusted to a private radio broadcaster, which, however, is financed by revenue from the media licence fee.

39In view of the foregoing, I propose that the answer to the third question referred for a preliminary ruling should be that Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive, is to be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that a small portion of the revenue from that fee may be used to finance the activities of entities other than public radio and television broadcasters.

40However, in the event that the Court does not accept my proposed answer to the third question referred, which I admit is less obvious than the answers to the first two questions, the possible incompatibility of the Danish system of taxation of the activities of public radio and television bodies with Directive 2006/112 would, in my opinion, only concern the VAT charged on that part of the media licence fee that is intended to finance entities other than public radio and television broadcasters. The rest of the system, however, remains in compliance with the directive, as is clear from the answers which in my opinion should be given to the first and second questions referred, since it is not difficult to calculate the proportion of VAT charged on the media licence fee that is related to the portion of that fee intended to finance entities other than public radio and television broadcasters. Therefore, I see no reason why the possible non-compliance of that part of VAT with Directive 2006/112 would result in the non-compliance of the entire system with that directive.

Conclusions

41In the light of all the foregoing considerations, I propose that the Court’s answers to the second and third questions referred for a preliminary ruling by the Østre Landsret (High Court of Eastern Denmark, Denmark) should be as follows:

Article 370 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, read in conjunction with point 2 of Part A of Annex X to that directive,

must be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that the fee is levied not only in connection with the ownership of a radio or television set, as was originally the case, but also in connection with the ownership of any other device that can be used to receive those programmes, such as smartphones, computers, and so forth, even if this potentially increases the number of entities obliged to pay that fee.

Article 370 of Directive 2006/112, read in conjunction with point 2 of Part A of Annex X to that directive,

must be interpreted as being applicable to the taxation of the activities of public radio and television bodies financed by a statutory fee paid by owners of devices capable of receiving programmes broadcast by those bodies in a situation where, after 1 January 1978, the licensing system was altered so that a small portion of the revenue from that fee may be used to finance the activities of entities other than public radio and television broadcasters.

¹ Original language: Polish.

² Judgment of 26 October 2023 (C‑249/22, ‘the judgment in GIS, EU:C:2023:813).

³ OJ 2006 L 347, p. 1.

⁴ Judgment of 22 June 2016 (C‑11/15, EU:C:2016:470).

⁵ OJ 1977 L 145, p. 1.

⁶ See point 19 of this Opinion.

⁷ The judgment in GIS (paragraphs 42 and 43).

⁸ See, to that effect, the judgment in GIS (paragraphs 45 and 47).

⁹ Or in the preceding Directive 77/388.

¹⁰ See, to that effect, judgment of 2 May 2019, Grupa Lotos (C‑225/18, EU:C:2019:349, paragraph 31 and the case-law cited), as well as the judgment in GIS (paragraph 42).

¹¹ Judgment of 22 June 2016 (C‑11/15, EU:C:2016:470, paragraphs 26 and 28).

¹² See, by analogy, the judgment in GIS (paragraph 51).

¹³ See, by analogy, the judgment in GIS (paragraphs 46 to 49).

¹⁴ See, to that effect, the judgment in GIS (paragraph 47).

¹⁵ See judgment of 16 October 2019, Winterhoff and Eisenbeis (C‑4/18 and C‑5/18, EU:C:2019:860, paragraph 50 and the case-law cited). It is true that in some language versions (particularly the English and French ones) the literal wording of Article 132(1)(a) of Directive 2006/112 may suggest that it is referring to postal services rather than to postal service providers. However, the Court has long since clarified (on the basis of the relevant provision of Directive 77/388) that the term should be understood as referring to the organisations in question (judgment of 11 July 1985, Commission v Germany, 107/84, EU:C:1985:332, paragraph 11). Moreover, other language versions of Article 132(1)(a) of that directive, in particular the Polish (‘poczta państwowa’) and German (‘öffentliche Posteinrichtungen’) ones, clearly indicate the public-law nature of the entity covered by the exemption, which did not prevent the Court from adopting a more flexible interpretation. Therefore, the analogy with point 2 of Part A of Annex X to that directive is, in my opinion, justified.