C-593/19 SK Telecom

JUDGMENT OF THE COURT (Fifth Chamber)

15 April 2021 ( *1 )

(Reference for a preliminary ruling – Value added tax (VAT) – Directive 2006/112/EC – Determination of the place of supply of telecommunications services – Roaming of third-country nationals on mobile communications networks within the European Union – Point (b) of the first paragraph of Article 59a – Option for Member States to transfer the place of supply of telecommunications services to their territory)

In Case C‑593/19,

REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesfinanzgericht (Federal Finance Court, Austria), made by decision of 29 July 2019, received at the Court on 5 August 2019, in the proceedings

SK Telecom Co. Ltd

v

Finanzamt Graz-Stadt,

THE COURT (Fifth Chamber),

composed of E. Regan (Rapporteur), President of the Chamber, M. Ilešič, E. Juhász, C. Lycourgos and I. Jarukaitis, Judges,

Advocate General: H. Saugmandsgaard Øe,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

SK Telecom Co. Ltd, by J. Fischer, tax adviser,

the Austrian Government, by F. Koppensteiner, acting as Agent,

the Spanish Government, by L. Aguilera Ruiz, acting as Agent,

the European Commission, by J. Jokubauskaitė and L. Mantl, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 22 October 2020,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of point (b) of the first paragraph of Article 59a of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended, from 1 January 2010, by Council Directive 2008/8/EC of 12 February 2008 (OJ 2008 L 44, p. 11) (‘the VAT Directive’).

2The request has been made in proceedings between SK Telecom Co. Ltd and the Finanzamt Graz-Stadt (Tax Office of the City of Graz, Austria) (‘the Tax Office’) concerning the refund of input value added tax (VAT) paid by SK Telecom in relation to a supply of telecommunications services for the 2011 tax year.

Legal context

European Union law

3Under recital 22 of the VAT Directive:

‘All telecommunications services consumed within the [European Union] should be taxed to prevent distortion of competition in that field. To that end, telecommunications services supplied to taxable persons established in the [European Union] or to customers established in third countries should, in principle, be taxed at the place where the customer for the services is established. In order to ensure uniform taxation of telecommunications services which are supplied by taxable persons established in third territories or third countries to non-taxable persons established in the [European Union] and which are effectively used and enjoyed in the [European Union], Member States should, however, provide for the place of supply to be within the [European Union].’

4Title I of that directive, which defines the subject matter and scope of the directive, contains Article 1(2) which provides:

‘The principle of the common system of VAT entails the application to goods and services of a general tax on consumption exactly proportional to the price of the goods and services, however many transactions take place in the production and distribution process before the stage at which the tax is charged.

On each transaction, VAT, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of VAT borne directly by the various cost components.

The common system of VAT shall be applied up to and including the retail trade stage.’

5Chapter 3, entitled ‘Supply of services’, of Title IV, entitled ‘Taxable transactions’, of that directive includes Article 24 which provides, in paragraph 2:

‘“Telecommunications services” shall mean services relating to the transmission, emission or reception of signals, words, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception, with the inclusion of the provision of access to global information networks.’

6Title V of that directive, entitled ‘Place of taxable transactions’, contains Chapter 3 relating to the place of supply of services, which includes Section 3, entitled ‘Particular provisions’. That section includes Subsection 9, entitled ‘Supply of services to non-taxable persons outside the [European Union]’, Article 59 of which stated:

‘The place of supply of the following services to a non-taxable person who is established or has his permanent address or usually resides outside the [European Union], shall be the place where that person is established, has his permanent address or usually resides:

…

telecommunications services;

…’

7In that Section 3, Subsection 10, entitled ‘Prevention of double taxation or non-taxation’, contained Articles 59a and 59b of the VAT Directive.

8Article 59a of that directive was worded as follows:

‘In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56 and 59:

consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the [European Union] if the effective use and enjoyment of the services takes place outside the [European Union];

consider the place of supply of any or all of those services, if situated outside the [European Union], as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.

…’

9Article 59b of that directive stated:

‘Member States shall apply [point (b) of the first paragraph of] Article 59a to telecommunications services and radio and television broadcasting services, as referred to in point (j) of the first paragraph of Article 59, supplied to non-taxable persons who are established in a Member State, or who have their permanent address or usually reside in a Member State, by a taxable person who has established his business outside the [European Union] or has a fixed establishment there from which the services are supplied, or who, in the absence of such a place of business or fixed establishment, has his permanent address or usually resides outside the [European Union].’

10Title XIV of the VAT Directive, entitled ‘Miscellaneous’, contains Chapter 2, Article 398 – the sole article contained therein – of which refers to an advisory committee called ‘the VAT Committee’.

Austrian law

The UStG

11Paragraph 3a of the Umsatzsteuergesetz (Law on turnover tax) of 23 August 1994 (BGBl. 663/1994; ‘the UStG 1994’), in the version applicable to the dispute in the main proceedings (‘the UStG 2010’), is worded as follows:

‘Other services

Paragraph 3a. (1) Services which do not constitute supplies [of goods] shall be regarded as other services. Other services may also consist in refraining from an act, or tolerating an act or situation.

…

Place of supply of other services

…

(5) For the purposes of subparagraphs 6 to 16 and Article 3a [of the annex (relating to the internal market) to the UStG 2010], the following shall apply:

1. an entrepreneur shall be any entrepreneur within the meaning of Paragraph 2; an entrepreneur who carries out also non-taxable transactions shall be considered to be an entrepreneur in respect of all other services supplied to him or her;

2. any legal person carrying on non-entrepreneurial activities who has a VAT identification number shall be considered to be an entrepreneur;

3. any person or association of persons that does not fall within the scope of points 1 and 2 shall be considered to be a non-entrepreneur.

(6) Without prejudice to subparagraphs 8 to 16 and Article 3a [of the annex (relating to the internal market) to the UStG 2010], other services supplied to an entrepreneur within the meaning of points 1 and 2 of subparagraph 5 shall be deemed to be effected at the place from which the customer carries on his or her business. If other services are supplied to an entrepreneur’s permanent establishment, the place of that permanent establishment shall instead be decisive.

(7) Without prejudice to subparagraphs 8 to 16 and Article 3a [of the annex (relating to the internal market) to the UStG 2010], other services supplied to a non-entrepreneur within the meaning of point 3 of subparagraph 5 shall be deemed to be effected at the place from which the entrepreneur carries on his or her business. If other services are supplied by a permanent establishment, the permanent establishment shall be deemed to be the place of supply of the other services.

…

(13) The other services described in subparagraph 14 shall be deemed to be effected as follows:

where the customer is a non-entrepreneur within the meaning of point 3 of subparagraph 5 and does not have his or her permanent address or seat or does not usually reside within the territory of the [European Union], the other services shall be deemed to be effected at his or her permanent address or seat or where he or she usually resides within the territory of the third country;

…

The following services shall be other services within the meaning of subparagraph 13:

…

12. telecommunications services;

…

(16) In order to prevent double taxation, non-taxation or distortion of competition, the [Bundesminister für Finanzen (Federal Minister for Finance)] may, by regulation, provide that, in the case of other services the place of supply of which is determined in accordance with subparagraphs 6, 7, 12 or subparagraph 13(a), the place of supply of other services shall be deemed to be where the other services are used or enjoyed. Consequently, the place of supply of other services may be treated as being:

1. within the territory of the third country rather than the national territory; and

2. within the national territory rather than the territory of the third country. This shall not apply to services within the meaning of point 14 of subparagraph 14, where the customer is a non-entrepreneur within the meaning of point 3 of subparagraph 5 and does not have his or her permanent address or seat or does not usually reside within the territory of the [European Union].’

The Transfer Regulation

12Under the Verordnung des Bundesministers für Finanzen über die Verlagerung des Ortes der sonstigen Leistung bei Telekommunikationsdiensten sowie Rundfunk- und Fernsehdienstleistungen (Regulation of the Federal Minister for Finance on the transfer of the place of supply of other telecommunications, broadcasting and television services) (BGBl. II, 383/2003), in the version applicable to the main proceedings (‘the Transfer Regulation’):

‘Pursuant to points 13 and 14 of subparagraph 10 of Paragraph 3a and subparagraph 13 of Paragraph 3a of the UStG 1994, as amended by the [Bundesgesetz (Federal law) (BGBl. I, 71/2003)], the following is hereby adopted:

1. Where the place of supply of a service described in points 12 and 13 of subparagraph 14 of Paragraph 3a of the [UStG 1994], as amended by the [Bundesgesetz (Federal law) (BGBl. I, 52/2009)], is outside the territory of the [European Union] pursuant to Paragraph 3a of the UStG 1994, the service shall be deemed to be effected within the national territory if it is used or enjoyed there.

2. Telecommunications services shall mean services relating to the transmission, emission and reception of signals, words, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems; this includes the transfer and assignment of the right to use capacity for such transmission, emission or reception.’

The Refund Regulation

13The Verordnung des Bundesministers für Finanzen, mit der ein eigenes Verfahren für die Erstattung der abziehbaren Vorsteuern an ausländische Unternehmer geschaffen wird (Regulation of the Federal Minister for Finance introducing a separate procedure for the refund of deductible input VAT to foreign entrepreneurs) (BGBl. 279/1995), in the version applicable to the main proceedings (‘the Refund Regulation’), provides for a simplified refund procedure, in accordance with Article I, which states:

‘Paragraph 1(1) By way of derogation from Paragraph 20 and subparagraphs 1 to 5 of Paragraph 21 of the UStG 1994, the refund of deductible input VAT to entrepreneurs who are not established within the national territory, which are those that have neither their seat nor a permanent establishment within the national territory, shall be carried out in accordance with Paragraphs 2, 3 and 3a, where during the period relevant to the refund, the entrepreneur:

1did not carry out any transactions within the meaning of points 1 and 2 of subparagraph 1 of Paragraph 1 and Article 1 of [the annex (relating to the internal market) to the UStG 1994] or

2carried out only non-taxable transactions within the meaning of point 3 of subparagraph 1 of Paragraph 6 of the UStG 1994 or

3carried out only transactions in respect of which the tax debt is on the customer (second indent of subparagraph 1 of Paragraph 19 of the UStG 1994);

4carried out only transactions within the meaning of point (b) of subparagraph 13 of Paragraph 3a of the UStG 1994 and has relied on the provision of Paragraph 25a of the UStG 1994 or, in another Member State, on the provisions of Articles 357 to 369 of the [VAT] Directive.

(2) Subparagraph 1 does not apply to input VAT attributable to transactions within the national territory other than those referred to in subparagraph 1.’

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

14SK Telecom is a company established in South Korea, which, in 2011, supplied mobile phone services to its customers, who were also established, had their permanent address or usually resided in South Korea, by way of roaming services allowing the use of the Austrian mobile communications network.

15To that end, an Austrian mobile communications network operator made its network available to SK Telecom in exchange for the payment of a user fee plus Austrian VAT which amounts to 20%. SK Telecom, for its part, invoiced its customers roaming charges for using the Austrian mobile communications network during their temporary stays on Austrian territory.

16SK Telecom applied to the Tax Office for a refund of the VAT invoiced to it by the Austrian mobile communications network operator for 2011, pursuant to the simplified refund procedure provided for by Article I of the Refund Regulation.

17The Tax Office rejected that application on the ground that the roaming charges invoiced to customers of SK Telecom were taxable in Austria, pursuant to the Transfer Regulation, which is based on Article 59a of the VAT Directive, since the telecommunications services supplied were not subject, in the third country, to a tax which is comparable to the turnover tax provided for by the national law. Thus, according to the Tax Office, in so far as SK Telecom had carried out taxable transactions in Austria, the VAT it had paid could not be refunded in the context of that procedure.

18The action brought by SK Telecom against the decision of the Tax Office was dismissed by that office, and was subsequently heard by the Bundesfinanzgericht (Federal Finance Court, Austria), which granted SK Telecom’s request for a refund of the VAT on the ground that the Transfer Regulation has a very broad scope. In that court’s view, it follows from Articles 59a and 59b of the VAT Directive that Member States may consider the place of supply of telecommunications services to be situated within their territory only as regards those services which are supplied to non-taxable persons who are established, have their permanent address or usually reside within the European Union. Thus, the Bundesfinanzgericht (Federal Finance Court) concluded that the Transfer Regulation is incompatible with EU law; nevertheless, that conclusion was not based on SK Telecom’s argument that the income from roaming services supplied to its customers was subject to a tax in the third country, at a rate of 10%, which is comparable to the VAT.

19The Bundesfinanzgericht (Federal Finance Court) therefore considered that, during the period covered by the request for a refund of the VAT, the fact that SK Telecom allowed its customers established in a third country to make phone calls in Austria by using the Austrian mobile communications network did not constitute a taxable transaction within the national territory, since the place of supply of the services concerned was situated within the third country in question. In that court’s view, SK Telecom is therefore entitled to a refund of the input VAT paid to the Austrian mobile communications network operator in the context of the simplified refund procedure provided for in Article I of the Refund Regulation.

20Following an ordinary appeal on a point of law (Revision) lodged by the Tax Office, the Verwaltungsgerichtshof (Supreme Administrative Court, Austria), by judgment of 13 September 2018, set aside the decision of the Bundesfinanzgericht (Federal Finance Court).

21In essence, the Verwaltungsgerichtshof (Supreme Administrative Court) stated that Articles 59a and 59b of the VAT Directive have the objective of preventing double taxation, non-taxation or distortion of competition. That court stated that, in particular, the first of those provisions provides for a general option for Member States to transfer the place of supply of certain services for the purpose of charging VAT. Pursuant to the second of those provisions, Member States are under an obligation to transfer the place of supply where an undertaking established in a third country supplies telecommunications services to non-taxable persons who are established, have their permanent address or usually reside in a Member State.

22In the view of that court, by adopting the Transfer Regulation, the Austrian legislature therefore made use of the option provided for by Article 59a of that directive in the situations not referred to by Article 59b of that directive. Thus, where a person who is not an entrepreneur and who is established, has his or her permanent address or usually resides outside the European Union uses, on Austrian territory, telecommunications services supplied by a company established in a third country, the place of supply of those services is transferred to Austria, pursuant to the Transfer Regulation.

23The Verwaltungsgerichtshof (Supreme Administrative Court) referred the case back to the Bundesfinanzgericht (Federal Finance Court); the latter court remains unsure about the compatibility with EU law of a national provision under which roaming services, such as those at issue the main proceedings, are ‘effectively used and enjoyed’ within the territory of the Member State, for the purposes of Article 59a of the VAT Directive, which allows the place of supply of those services to be considered to be situated within the territory of that Member State, even though those services are supplied to non-taxable customers who are staying only temporarily in the territory of that Member State.

24In addition, the referring court is of the view that, while point (b) of the first paragraph of Article 59a of that directive should be interpreted as meaning that roaming services, such as those at issue in the main proceedings, are ‘effectively used and enjoyed’ within the territory of the Member State, for the purposes of that provision, it is appropriate to clarify the objective consisting in preventing non-taxation which is pursued by means of the option of transferring the place of supply of services provided for in that provision.

25In the view of that court, it is necessary, in particular, to clarify whether the concept of ‘non-taxation’, within the meaning of that provision, must be interpreted as meaning that the existence in the third country of a tax that is comparable to the VAT provided for by EU law is decisive for a Member State to be able to consider the place of supply of the services concerned to be situated within its territory.

26In those circumstances, the Bundesfinanzgericht (Federal Finance Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

Is [point (b) of the first paragraph] of Article 59a of [the VAT Directive] to be interpreted as meaning that the use of roaming services in a Member State in the form of access to the national mobile telephone network for the purpose of establishing incoming and outgoing connections by a “non-taxable end customer” temporarily staying in that Member State constitutes “use and enjoyment” in that Member State which justifies the transfer of the place of supply from the third country to that Member State, even though neither the mobile telephone operator providing the services nor the end customer are established in [EU] territory and the end customer neither has his or her permanent address nor usually resides within the territory of the [European Union]?

Is [point (b) of the first paragraph] of Article 59a of [the VAT Directive] to be interpreted as meaning that the place of supply of telecommunications services as described in Question 1, which are outside the [European Union] according to Article 59 of [that directive], may be transferred to the territory of a Member State even though neither the mobile telephone operator providing the services nor the end customer are established in [EU] territory and the end customer neither has his or her permanent address nor usually resides within the territory of the [European Union], simply because the telecommunications services in the third country are not subject to a tax comparable to VAT under EU law?’

Consideration of the questions referred

27By its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether point (b) of the first paragraph of Article 59a of the VAT Directive must be interpreted as meaning that roaming services supplied by a mobile phone operator established in a third country to its customers who are also established, have their permanent address or usually reside in that third country, allowing them to use the national mobile communications network of the Member State in which they are temporarily staying, must be considered to be ‘effectively used and enjoyed’ within the territory of that Member State, for the purposes of that provision, so that that Member State may consider the place of supply of those roaming services to be situated within its territory when those services are not subject to a tax treatment, in that third country, that is comparable to the charging of VAT.

28It must be recalled that the underlying logic of the provisions of the VAT Directive concerning the place where a service is deemed to be supplied is that services should be taxed as far as possible at the place of consumption (see, to that effect, judgment of 13 March 2019, Srf konsulterna, C‑647/17, EU:C:2019:195, paragraph 29 and the case-law cited).

29In that regard, pursuant to point (i) of the first paragraph of Article 59 of that directive, the place of supply of roaming services, such as those at issue in the main proceedings in respect of which it is common ground that they are telecommunications services within the meaning of Article 24(2) of that directive, since the services are supplied to non-taxable persons who are established, have their permanent address or usually reside outside the European Union, is to be the place where those persons are established, have their permanent address or usually reside.

30Nevertheless, by way of derogation, point (b) of the first paragraph of Article 59a of the VAT Directive allows Member States, with regard to services the place of supply of which is governed inter alia by Article 59 of that directive, to consider that place, which is in principle situated outside the European Union, to be situated within their territory if the effective use and enjoyment of those services takes place within their territory.

31On that basis, it is appropriate to note that Article 59b of that directive required Member States to apply point (b) of the first paragraph of Article 59a of that directive to telecommunications services which are supplied to non-taxable persons who are established, have their permanent address or usually reside in a Member State by a taxable person, such as the mobile phone operator in the main proceedings, that has established its business outside the European Union.

32Nonetheless, the obligation provided for in Article 59b of that directive cannot have the effect of limiting, in circumstances other than those referred to in that provision, the discretion of Member States to make use, as regards telecommunications services, of the general option they have under point (b) of the first paragraph of Article 59a of that directive.

33In that regard, it must be noted that point (b) of the first paragraph of Article 59a does not lay down any condition relating to the length of stay in the territory of Member States of persons who are established, have their permanent address or usually reside in a third country, in particular in the light of the fact that that stay is only temporary.

34Therefore, for the purpose of exercising the option provided for by that provision, it must be assessed whether roaming services, such as those at issue in the main proceedings, are effectively used and enjoyed within the territory of the Member State which seeks to transfer the place of supply of those services to itself.

35In essence, a roaming service consists in the service supplied by a mobile communications service provider to its customers, allowing them to use their mobile device on a mobile communications network other than that of that provider, as a result of agreements concluded between the operators of those networks. In the present case, the purpose of the roaming services at issue in the main proceedings is to allow customers of SK Telecom, where they are outside the reach of the mobile communications network operated by SK Telecom, to use mobile phone services via the mobile communications network of an Austrian operator.

36In that regard, it must be recalled that it is apparent from settled case-law that, first, it follows from the second subparagraph of Article 1(2) of the VAT Directive that every transaction must normally be regarded as distinct and independent and, second, that a transaction which comprises a single supply from an economic point of view should not be artificially split, so as not to distort the functioning of the VAT system (judgment of 4 September 2019, KPC Herning, C‑71/18, EU:C:2019:660, paragraph 36 and the case-law cited).

37As noted by the Advocate General in point 44 of his Opinion, roaming services, such as those at issue in the main proceedings, provided to persons who are temporarily staying in the territory of a Member State, are distinct and independent from other mobile communications services received by those persons.

38Moreover, as is apparent from both the information provided by the referring court and the written observations submitted to the Court, those roaming services are distinctly identified by SK Telecom and are subject to separate fees, namely roaming charges, which are invoiced to the customers supplied with those services.

39It thus follows from the very nature of roaming services that the effective use and enjoyment of those services necessarily takes place within the territory of the Member State concerned during SK Telecom’s customers’ temporary stays in that territory.

40Nonetheless, even where, in circumstances such as those in the main proceedings, the condition relating to the effective use and enjoyment of the services concerned within the territory of a Member State is met, that Member State can make use of the option provided under point (b) of the first paragraph of Article 59a of the VAT Directive to regard the place of supply of services situated outside the European Union as if situated within its territory only in so far as that use has the effect of preventing double taxation, non-taxation or distortion of competition.

41In that regard, in the first place, it is true that, as noted by the referring court, it is apparent from recital 22 of that directive that the taxation of all telecommunications services consumed within the European Union reflects the intention of the EU legislature to prevent distortion of competition.

42That being said, it should be recalled that the objective of the provisions of the VAT Directive determining the place where supplies of services are taxed is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, second, non-taxation (see, to that effect, judgments of 17 December 2015, WebMindLicenses, C‑419/14, EU:C:2015:832, paragraph 41, and of 13 March 2019, Srf konsulterna, C‑647/17, EU:C:2019:195, paragraph 28 and the case-law cited).

43In the light of the wording of point (b) of the first paragraph of Article 59a of that directive and the fact that it is found in Subsection 10, entitled ‘Prevention of double taxation or non-taxation’, of Section 3 of Chapter 3 of Title V of that directive, it is appropriate to consider that the option provided by that provision is not only to be seen in the context of the prevention of distortion of competition but also seeks to prevent double taxation or non-taxation.

44It follows that it is open to Member States to make use of the option provided under point (b) of the first paragraph of Article 59a of that directive where that use has the sole effect of remedying a situation of non-taxation within the European Union, which, according to the information available to the Court, was the case with the roaming services at issue in the main proceedings.

45In the second place, as noted by the Advocate General in point 88 of his Opinion, it must be added that, for the purpose of applying that provision, the possible cases of double taxation, non-taxation or distortion of competition are to be assessed by reference to the tax treatment of the services concerned in the Member States, without it being necessary to take account of the tax regime to which those services are subject in the third country concerned.

46It is true that an international agreement concluded with that third country in that respect could provide otherwise. Nevertheless, the request for a preliminary ruling and the observations submitted to the Court do not refer to any such agreement.

47A solution contrary to the one set out in paragraphs 44 and 45 of the present judgment would have the effect of rendering the application of the EU VAT rules dependent on the third country’s domestic tax law. In the absence of any indication to that effect, it cannot be presumed that that was the intention of the EU legislature.

48An interpretation according to which Member States may make use of the option provided under point (b) of the first paragraph of Article 59a of the VAT Directive without in principle having to take account of the taxation of those services under the domestic tax law of the third country concerned is, moreover, corroborated by the approach adopted by the VAT committee, which is an advisory committee established by Article 398 of that directive, whose guidelines, while not binding, nevertheless constitute an aid in interpreting the VAT Directive (see, to that effect, order of 8 October 2020, Weindel Logistik Service, C‑621/19, not published, EU:C:2020:814, paragraph 48).

49It follows from the guidelines of that committee [89th meeting of 30 September 2009, Document B – taxud.d.1(2010)176579 – 645] that that committee unanimously agreed that the Member States exercising the option provided for in point (b) of the first paragraph of Article 59a of that directive to tax services effectively used and enjoyed on their territory does not depend on the tax treatment to which those services are subject outside the European Union. In particular, the fact that a service may be taxed in a third country under the national rules of that country does not prevent a Member State from taxing that service if it is effectively used and enjoyed on its territory.

50In the light of all the foregoing considerations, the answer to the questions referred is that point (b) of the first paragraph of Article 59a of the VAT Directive must be interpreted as meaning that roaming services supplied by a mobile phone operator established in a third country to its customers who are also established, have their permanent address or usually reside in that third country, allowing them to use the national mobile communications network of the Member State in which they are temporarily staying, must be considered to be ‘effectively used and enjoyed’ within the territory of that Member State, for the purposes of that provision, so that that Member State may consider the place of supply of those roaming services to be situated within its territory where, regardless of the tax treatment to which those services are subject under the domestic tax law of that third country, the exercise of such an option has the effect of preventing the non-taxation of those services within the European Union.

Costs

51Since 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:

Point (b) of the first paragraph of Article 59a of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended, from 1 January 2010, by Council Directive 2008/8/EC of 12 February 2008, must be interpreted as meaning that roaming services supplied by a mobile phone operator established in a third country to its customers who are also established, have their permanent address or usually reside in that third country, allowing them to use the national mobile communications network of the Member State in which they are temporarily staying, must be considered to be ‘effectively used and enjoyed’ within the territory of that Member State, for the purposes of that provision, so that that Member State may consider the place of supply of those roaming services to be situated within its territory where, regardless of the tax treatment to which those services are subject under the domestic tax law of that third country, the exercise of such an option has the effect of preventing the non-taxation of those services within the European Union.

Signatures

[Signatures]

( *1 ) Language of the case: German.

OPINION OF ADVOCATE GENERAL

SAUGMANDSGAARD ØE

delivered on 22 October 2020 ¹

(Reference for a preliminary ruling – Value added tax (VAT) – Directive 2006/112 – Measures to avoid double taxation and non-taxation – Article 59a – Telecommunications sector – Mobile telephony – Roaming Services – Third-country nationals temporarily resident in the territory of a Member State – Place of supply – Option of relocating the place of supply to the territory of the Member State concerned – Requirement of effective use and enjoyment within the territory of the Member State – Double taxation, non-taxation or distortion of competition – Irrelevance of the tax treatment in the third country)

I. Introduction

1By decision of 29 July 2019, received at the Court on 5 August 2019, the Bundesfinanzgericht (Federal Finance Court, Austria) submitted to the Court a request for a preliminary ruling on the interpretation of point (b) of the first paragraph of Article 59a of Directive 2006/112. ²

2The request was made in proceedings between SK Telecom Co. Ltd, a company established in South Korea, and the Finanzamt Graz-Stadt (tax office in the city of Graz, Austria) (‘the Finanzamt’) regarding the tax treatment of roaming services provided by that company to users residing in South Korea but staying temporarily in Austria, consisting in giving them access to a mobile telephone network in that Member State.

3The questions referred seek, in essence, to determine whether the aforementioned provision enables the Republic of Austria to transfer the place of such supply of roaming services to its territory, with the result that they will be subject to Austrian value added tax (VAT).

4In the remainder of my Opinion, I will propose that the Court answers these questions in the affirmative.

II. Legal context

A. European Union law

5Since the services at issue in the main proceedings were provided during 2011, the version of Directive 2006/112 applicable to the main proceedings is that resulting from the last amendments made by Directive 2010/88, the transposition deadline for which expired on 1 January 2011 under Article 2 of the latter directive. ³

6Directive 2006/112 includes a Title V entitled ‘Place of taxable transactions’. Within Title V, Chapter 3 is devoted to ‘Place of supply of services’. It includes a section 3 dedicated to ‘Particular provisions’. Articles 59, 59a and 59b of Directive 2006/112 fall within Section 3. ⁴

7Article 59 of that directive, which falls under sub-section 9, entitled ‘Supply of services to non-taxable persons outside [the EU]’, states:

‘The place of supply of the following services to a non-taxable person who is established or has his permanent address or usually resides outside [the EU], shall be the place where that person is established, has his permanent address or usually resides:

…

telecommunication services;

…’

8Articles 59(a) and 59(b) of Directive 2006/112 are in subsection 10 entitled ‘Prevention of double taxation or non-taxation’.

9Article 59a of that directive is worded as follows:

‘In order to prevent double taxation, non-taxation or distortion of competition, Member States may, with regard to services the place of supply of which is governed by Articles 44, 45, 56 and 59:

consider the place of supply of any or all of those services, if situated within their territory, as being situated outside the [EU] if the effective use and enjoyment of the services takes place outside the [EU];

consider the place of supply of any or all of those services, if situated outside the [EU], as being situated within their territory if the effective use and enjoyment of the services takes place within their territory.

However, this provision shall not apply to electronically supplied services where those services are rendered to non-taxable persons not established within the [EU].’

10Article 59b of that directive provides:

‘Member States shall apply [point (b) of the first paragraph] of Article 59a to telecommunications services and radio and television broadcasting services, as referred to in point (j) of the first paragraph of Article 59, supplied to non-taxable persons who are established in a Member State, or who have their permanent address or usually reside in a Member State, by a taxable person who has established his business outside the [EU] or has a fixed establishment there from which the services are supplied, or who, in the absence of such a place of business or fixed establishment, has his permanent address or usually resides outside the [EU].’

B. Austrian law

11Article 3(a) of the Umsatzsteuergesetz (Law on Turnover Tax) of 1994 (BGB1. 663/1994, ‘the UStG 1994’), in the version applicable to the dispute in the main proceedings (BGB1. 34/2010) provides:

‘…

(13) Other services within the meaning of paragraph (14) are considered to be located:

where the customer is not a contractor within the meaning of paragraph (5), point 3 and does not have his permanent address or business or habitual residence within the [EU], the other service is considered to be at the permanent address, business or habitual residence of the customer within the territory of the third country;

…

(14) The following services are considered to be other services within the meaning of paragraph 13:

…

12. telecommunication services;

…

(16) To prevent cases of double taxation, non-taxation or distortion of competition, the Bundesminister für Finanzen (Federal Minister for Finance) may, by regulation, provide that other services, the place of supply of which is determined in accordance with paragraphs 6, 7, 12 or 13(a), are considered to be at the place where those other services are used or enjoyed. Consequently, the place of supply of the other service may be considered to be:

1in the territory of the third country rather than the national territory; and

2in the national territory instead of the territory of the third country. This provision does not apply to services within the meaning of paragraph 14, point 14, where the customer is not a contractor within the meaning of paragraph 5, point 3 and does not have his permanent residence, business or usual residence within the [EU].’

12Under the Regulation of the Federal Minister for Finance on the transfer of the place of supply of the other telecommunications, broadcasting and television services (BGB1. II 383/2003), in the version applicable to the main proceedings (BGB1. II 221/2009):

‘In accordance with points 13 and 14 of paragraph 10 of Article 3a and paragraph 13 of Article 3(a) of the UStG 1994, in the version in Federal Law BGB1. I 71/2003, we hereby adopt the following:

Article 1. Where the place of supply referred to in points 12 and 13 of paragraph 14 of Article 3a of the UStG 1994, BGB1. 663, in the version of Federal Law BGB1. I 52/2009, is outside the territory of the [EU], in accordance with Article 3a of the UStG 1994, the supply is made on the national territory if it is used or enjoyed there.

Article 2. Telecommunications services shall be deemed to be services relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception.’

III. The main proceedings, the questions referred for a preliminary ruling and the procedure before the Court

13SK Telecom is a mobile phone undertaking established in South Korea.

14In 2011, SK Telecom provided mobile phone services to some of its customers, also based in South Korea, who were temporarily staying in Austria.

15In order to enable those persons to use their mobile phones during their stay in Austria, an Austrian network operator made its network available to SK Telecom in exchange for the payment of a user fee plus Austrian VAT (20%).

16SK Telecom, for its part, charged its customers roaming fees for use of the Austrian network.

17SK Telecom subsequently applied for reimbursement of the VAT invoiced to it by the Austrian network operator.

18The Finanzamt refused the application for reimbursement. That refusal was based, in essence, on the requirement to subject to Austrian VAT the roaming fees charged by SK Telecom to its customers, in accordance with the Austrian Regulation on the transfer of the place of supply, since those telecommunications services were not subject to a tax in South Korea which was comparable to Austrian VAT. Since SK Telecom had carried out taxable transactions in Austria, it could not benefit from a refund of VAT under the simplified refund procedure.

19Its appeal before the Finanzamt having been dismissed, SK Telecom brought a further appeal before the Bundesfinanzgericht (Federal Finance Court).

20The Bundesfinanzgericht (Federal Finance Court), the referring court in the present case, upheld SK Telecom’s appeal. That court points out that it did not base its decision on any comparable taxation in the third country, but on the incompatibility with EU law of the Austrian Regulation on relocation of the place of supply, pursuant to which the place of supply of the roaming services provided by SK Telecom is within the territory of Austria.

21According to that court, it follows from Articles 59a and 59b of Directive 2006/112 that a Member State may transfer the place of supply of a service to its territory only for telecommunications services provided to non-taxable persons established within the EU.

22In practice, that interpretation implies that the supply of services provided by SK Telecom, consisting in enabling its customers established in South Korea to use their mobile telephone subscription in Austria, using the Austrian mobile telephone network, does not constitute a taxable transaction within the territory of Austria. Consequently, SK Telecom is entitled to obtain, under the simplified refund procedure, reimbursement of the Austrian VAT paid to the Austrian network operator.

23Following an ordinary appeal on a point of law brought by the Finanzamt, the Verwaltungsgerichtshof (Supreme Administrative Court, Austria) set aside the decision of the Bundesfinanzgericht (Federal Finance Court) by judgment of 13 September 2018.

24According to the Verwaltungsgerichtshof (Supreme Administrative Court), while Article 59b of Directive 2006/112 lays down an obligation to relocate the place of supply where an undertaking established in a third country supplies telecommunications services to non-taxable persons established in a Member State, Article 59a of that directive provides for an option to relocate the place of supply in cases not referred to in Article 59b of that directive.

25According to that court, and contrary to the view expressed by the Bundesfinanzgericht (Federal Finance Court), the Austrian legislature legitimately made use of the option provided for in Article 59a of Directive 2006/112 by adopting the Austrian regulation on relocation of the place of supply.

26The case having been referred back to it by the Verwaltungsgerichtshof (Supreme Administrative Court), the Bundesfinanzgericht (Federal Finance Court) still has doubts about the compatibility of that national regime with Article 59a of Directive 2006/112.

27In those circumstances, the Bundesfinanzgericht (Federal Finance Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

Is [point (b) of the first paragraph] of Article 59a of Directive [2006/112] to be interpreted as meaning that the use of roaming services in a Member State in the form of access to the national mobile telephone network for the purpose of establishing incoming and outgoing connections by a ‘non-taxable end customer’ temporarily resident in that Member State constitutes ‘use and enjoyment’ in that Member State which justifies the transfer of the place of supply from the third country to that Member State, even though neither the mobile telephone operator providing the services nor the end customer are established in [EU] territory and the end customer does not have his permanent address and does not usually reside in the [EU]?

Is [point (b) of the first paragraph] of Article 59a of Directive [2006/112] to be interpreted as meaning that the place of supply of telecommunications services as described in Question 1, which are outside the [EU] according to Article 59 of [that directive], may be transferred to the territory of a Member State even though neither the mobile telephone operator providing the services nor the end customer are established in [EU] territory and the end customer does not have his permanent address and does not usually reside in the [EU], simply because the telecommunications services in the third country are not subject to a tax comparable to [VAT] under EU law?’

28The request for a preliminary ruling was registered at the Court Registry on 5 August 2019.

29SK Telecom, the Austrian and Spanish Governments, and the European Commission submitted written observations.

IV. Analysis

30By its questions, the referring court seeks to ascertain, in essence, whether point (b) of the first paragraph of Article 59a of Directive 2006/112 is to be interpreted as meaning that a Member State may transfer to its territory the place of roaming services allowing the use of a mobile telephone network located in that Member State, it being understood that those services are provided by a mobile telephone operator established in a third country to users having their permanent address or usually residing in that third country but temporarily staying in that Member State.

31After presenting the practical issues in this case as well as the relationship between Articles 59, 59a and 59b of Directive 2006/112, I will set out the reasons why I consider that the referring court’s questions should be answered in the affirmative.

A. On the practical issues of this case

32Before examining these two questions, I wish to dispel any doubt that may remain as to the practical issues in this case.

33A mobile telephone roaming service, such as that at issue in the main proceedings, involves the supply of two services for the purposes of VAT.

34The first supply of services concerns only telecommunications undertakings, not telephone users (‘business-to-business’ or ‘B2B’ relationship). A network operator who operates in the country of roaming (Austria) opens its network to a mobile phone operator established in the country of origin (SK Telecom, established in Korea) for payment of a fee.

35The second supply of services connects the mobile telephone operator of the country of origin (SK Telecom) and the telephone users who have subscribed to its services (‘business-to-consumer’ or ‘B2C’ relationship). That operator ‘sublets’, as it were, to users in the country of roaming (Austria) access to the network which it has previously obtained as part of the first service.

36While the questions referred to the Court relate solely to the second supply of services (between SK Telecom and its subscribers), and more specifically to the place of that supply, those questions arose in connection with an application for a refund submitted by SK Telecom in respect of the first supply (between SK Telecom and the Austrian network operator).

37The Austrian network operator applied Austrian VAT when supplying the first service. SK Telecom applied for a reimbursement of the amount of that Austrian VAT. The Finanzamt refused that reimbursement, arguing that the second supply of services was also subject to Austrian VAT.

38Thus, depending on the Court’s answers to the questions referred, two solutions to the main proceedings are possible, as the Commission rightly pointed out:

either the place of the second supply of services is in Austria: in that case, SK Telecom is liable to pay Austrian VAT on the amounts invoiced to its subscribers, while being entitled to deduct the Austrian VAT it paid up-front on the first supply;

or the place of the second supply of services is in South Korea: in that event, Austrian VAT is not due on that supply and SK Telecom is entitled to a refund of the VAT paid up-front on the first supply.

39The Commission has expressed certain reservations about making the first supply of services subject to Austrian VAT. It stated that, according to the general rule laid down in Article 44 of Directive 2006/112, the place of supply of services between taxable persons (‘B2B’ relationship) is the place where the customer has established his business, which in the case of SK Telecom is South Korea. ⁵

40It does not seem to me to be appropriate for the Court to examine this issue given that, first, the Court has not been asked about the first supply of services and second, the request for a preliminary ruling does not contain any explanation on this matter.

41In any event, this uncertainty relating to the taxation of the first supply of services in Austria does not call into question the relevance of the questions asked by the referring court, since the issue of the second supply of services being subject to Austrian VAT depends on the answers that the Court will provide to these questions.

42Finally, SK Telecom argued that it would be ‘artificial’, within the meaning of the Court’s case-law, ⁶ to split different communications from the same SIM card. In SK Telecom’s opinion, the roaming services at issue in the main proceedings form part of a single supply of mobile telephone services provided to its users. That supply is located in South Korea and is exempt from VAT in the EU.

43I am not convinced by that argument. I would point out that, for VAT purposes, every supply must normally be regarded as distinct and independent . ⁷ Thus, it is only where two or more elements or acts supplied by the taxable person are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split, that they must be regarded as a single supply for VAT purposes. ⁸

44Roaming services such as those at issue in the main proceedings, which consist in offering access to a mobile telephone network in a country other than the country of origin, are objectively separable from mobile telephone services provided in the country of origin.

45As the Spanish Government has rightly pointed out, in practice, bills sent to users usually identify roaming services as being distinct from access to the local network. These bills indicate, in particular, the number of incoming and outgoing calls, as well as the data used, courtesy of the roaming services, on the network of the State visited. Thus, although the customer must have a contract with the operator of his country of origin in order to access it, roaming services constitute a different service and not one which is incidental to that which the operator provides to its customers to access the local network.

B. The relationship between Articles 59, 59a and 59b of Directive 2006/112

46Articles 59, 59a and 59b of Directive 2006/112 lay down specific and connected criteria regarding the place of supply of certain services. ⁹

47As a preliminary point, I note that the referring court correctly relied on the premiss that the roaming services at issue in the main proceedings constitute ‘telecommunication services’ within the meaning of Article 24(2) of Directive 2006/112. ¹⁰ This premiss was not disputed by any of the parties who submitted observations to the Court.

48In the absence of a derogation under national law pursuant to Article 59a of Directive 2006/112, it follows from Article 59(i) of that directive that the place of supply of telecommunications services, supplied to a non-taxable person who is established or has his permanent address or usually resides outside the EU, is the place where that person is established or has his permanent address or usually resides, that is to say, outside the EU.

49To put it more simply, that provision provides that telecommunications services supplied to non-taxable persons having their permanent address or habitually residing outside the EU are not subject to VAT.

50However, Article 59a of Directive 2006/112 gives Member States the option to derogate from that principle in certain circumstances, by relocating the place of supply of services to their territory.

51It is clear from the request for a preliminary ruling, as well as from the observations of the Austrian Government and the Commission, that the Republic of Austria exercised that option by adopting the Regulation of the Federal Ministry of Finance on the transfer of the place of supply of the other telecommunications, broadcasting and television services, in the version applicable to the dispute in the main proceedings. ¹¹

52I would point out that Article 59b of Directive 2006/112 makes the relocation of the place of supply of telecommunication services obligatory where they are provided to persons who are non-taxable persons but who have their permanent address or reside habitually within the EU. The latter condition is not satisfied with regard to the services at issue in the main proceedings, those services having admittedly been provided to non-taxable persons but those persons have their permanent address or habitually reside outside the EU, namely in South Korea. That provision is therefore irrelevant for the answer to the referring court’s questions, as the Spanish Government and the Commission rightly pointed out.

53I would also point out that the scope of the option in Article 59a of Directive 2006/112 is broader than the scope of the obligation imposed by Article 59b of that directive, as rightly pointed out by the Commission. In other words, and as follows from the wording of those two provisions, the option offered to States by Article 59a of that directive is not restricted to the cases referred to in Article 59b of that directive.

54That being said, it is necessary, in order to answer the questions referred by the national court, to examine the conditions to which the implementation by a Member State of the option offered by point (b) of the first paragraph of Article 59a of Directive 2006/112 of relocating the place of supply of certain services, in particular telecommunications services, to its territory, are subject.

55Two conditions must be distinguished in that regard.

56First, the ‘effective use or enjoyment’ of the services must take place within the territory of the Member State concerned. That condition is the subject of the first question asked by the referring court.

57Secondly, Member States may make use of that option ‘to avoid double taxation, non-taxation or distortion of competition’. That condition is the subject of the second question.

C. The requirement of effective use or enjoyment of the services in the territory of the Member State concerned (first question)

58By its first question, the referring court seeks to ascertain, in essence, whether point (b) of the first paragraph of Article 59a of Directive 2006/112 is to be interpreted as meaning that roaming services enabling use to be made of a mobile telephone network situated in a Member State, which are provided by a mobile telephone operator established in a third country to users having their permanent address or habitually residing in that third country but temporarily staying in the territory of that Member State, must be regarded as being the subject of ‘effective use or enjoyment’ in the territory of that Member State.

59Unlike SK Telecom, the Austrian and Spanish Governments and the Commission propose that this question be answered in the affirmative.

60Before answering this question, I regret to point out the existence of somewhat surprising inconsistencies, also noted by SK Telecom, between the language versions of the expression ‘effective use or enjoyment’ in the first paragraph of Article 59a of Directive 2006/112. Depending on the language versions consulted, this expression takes the form of ‘effective use or enjoyment’ or ‘effective use and enjoyment’.

61That expression finds its origin in former Article 9(3) of Sixth Directive 77/388/EEC. ¹² However, there was already a disparity between the language versions using the conjunction ‘or’ and those using the conjunction ‘and’ as regards that provision. ¹³ I would point out that that provision was interpreted by the Court in the judgment Athesia Druck which concerned advertising services, without, however, settling the problem of the disparity between language versions. ¹⁴

62In its proposal to recast Sixth Directive 77/388, which would lead to the adoption of Directive 2006/112, the Commission appears to me to have proposed harmonisation of all the language versions by advocating use of the conjunction ‘or’. ¹⁵

63Strangely, when Directive 2006/112 was adopted, the ‘or’ camp admittedly won many members, in accordance with that proposal, but did not have a total victory. Indeed, the English, Dutch and Swedish versions of Article 58 (future Article 59a) of that directive, in its initial version, remained faithful to the ‘and’ camp. ¹⁶

64To further complicate matters, the adoption of Directive 2008/08 has shifted a number of the language versions – in particular the Italian and Portuguese versions – into the ‘and’ camp. Thus, the language versions of Article 59a of Directive 2006/112, former Article 58 of that directive, are now shared between the ‘or’ camp and the ‘and’ camp. ¹⁷

65I would stress that this disparity still exists today, in the version of the directive resulting from the amendments made by Directive (EU) 2020/285. ¹⁸

66In my opinion, the need for legal certainty requires that this disparity between the language versions of Article 59a of Directive 2006/112 be resolved.

67According to the Court’s settled case-law, in particular in matters of VAT legislation, the provisions of EU law must be interpreted and applied in a uniform manner, in the light of the versions existing in all the languages of the European Union. Where there is divergence between the various language versions of an EU legislative text, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part. ¹⁹

68In the application of this case-law, there are, in my opinion, four reasons why Article 59a of Directive 2006/112 should be interpreted as requiring the effective use or enjoyment of the services concerned in the Member State.

69In the first place, that interpretation is in accordance with the express desire of the Commission at the time of its proposal for a recast of Sixth Directive 77/388, to harmonise all the language versions in favour of the expression ‘effective use or enjoyment’, as I indicated in point 62 of this Opinion. That desire does not seem to me to have been contested by the EU legislature, namely, the Council of the European Union and the European Parliament, as regards that directive, so that the continued disparity between the language versions could be the result of somewhat unfortunate translations of this expression.

70In the second place, that interpretation is consistent with the intention of the EU legislature to define the place of supply of services as being, as a general rule, the place of their actual consumption. ²⁰ Moreover, that desire is in accordance with the opinion expressed by the VAT Committee on this subject, ²¹ as the Austrian Government has rightly noted: ‘The VAT Committee almost unanimously agrees that the place of the effective use or enjoyment of telecommunication services, radio and television broadcasting services and electronic services is deemed to be where the lessee is effectively able to use the service provided to him. Under normal circumstances, this will be the physical location where the service is rendered.’

71In the third place, this interpretation is necessary from a semantic point of view, because of the relationship between the terms ‘use’ and ‘enjoyment’. The Académie française (French Academy) defines enjoyment as ‘the action of enjoying an asset, of making it worthwhile, of managing it, with a view to benefiting from it’. In accordance with this usual definition, it does not seem possible to me to enjoy goods without using them. In other words, any enjoyment presupposes use, the latter expression having a more general meaning.

72The word ‘use’ would therefore have no useful effect in the expression ‘effective use and enjoyment’ (which would always require an enjoyment), but not in the expression ‘effective use or enjoyment’ (which would refer either to simple use or to enjoyment).

73Finally, in the fourth place, the interpretation which favours the expression ‘use or enjoyment’ follows from the context in which Article 59a of Directive 2006/112 sits. The term ‘enjoyment’ has an economic connotation, as shown by the definition given by the French Academy, cited above. However, pursuant to Article 9(1) of that directive, all economic activities involve, save for some exceptions, a liability to pay VAT. The expression ‘effective use and enjoyment’ would therefore tend to exclude those services provided to non-taxable persons from the scope of Article 59a of that directive, since they do not ‘enjoy’ the services in question.

74Such an interpretation would be incompatible with the regulatory context in which this provision sits, for at least two reasons. First, the second paragraph of Article 59a of Directive 2006/112 specifically excludes certain services supplied to non-taxable persons from its scope, which logically implies that such services are, in principle, covered by that provision. Second, Article 59a allows Member States to derogate from Article 59 of that directive, which relates exclusively to services supplied to non-taxable persons.

75Thus, to summarise, it is not disputed that the first paragraph of Article 59a of Directive 2006/112 covers services supplied to non-taxable persons. However, non-taxable persons do not ‘enjoy’ the services provided to them, which would imply an economic activity, but merely ‘use’ them. Consequently, this provision must necessarily be interpreted as requiring the ‘effective use or enjoyment’ of services in the territory of the Member State concerned.

76It follows from the foregoing that point (b) of the first paragraph of Article 59(a) of Directive 2006/112 must be interpreted as requiring effective use or enjoyment of the services in the Member State concerned.

77In my view, however, there is little doubt that roaming services, such as those at issue in the main proceedings, are in fact effectively used in the territory of the Member State concerned.

78I would point out that such roaming services are intended solely for the use of a mobile telephone network located in the Member State concerned by users temporarily staying in that Member State, namely Austria in the main proceedings, and exclude that part of the telecommunication services involving use of a mobile telephone network in the third country of origin, namely South Korea in the main proceedings. ²²

79There are three factors which seem to me to tip the balance heavily in favour of the effective use of roaming services in the Member State concerned.

80First, the mobile telephone network used is located in that Member State. Second, the users who are granted access to this network are temporarily staying in that Member State. Third, and as the Spanish Government has pointed out, such roaming services can only be used in the territory of that Member State. Indeed, in the context of the main proceedings, their presence in Austria is the only reason why users from South Korea request access to an Austrian mobile telephone network.

81In addition, and as the Commission has rightly pointed out, the access by Korean customers to the Austrian mobile telephone network occurs in exactly the same way as the access enjoyed by an Austrian customer to the same network, which is a clear indication of effective use in Austria.

82I am therefore satisfied that the services at issue in the main proceedings are effectively used in Austrian territory.

83In the light of the above, I propose that the Court reply to the first question as follows. Point (b) of the first paragraph of Article 59a of Directive 2006/112 must be interpreted as meaning that roaming services allowing the use of a mobile telephone network in a Member State, which are provided by a mobile telephone network operator established in a third country to users who have their permanent address or usually reside in that third country but are temporarily staying in the territory of that Member State, must be considered as being the subject of ‘effective use’ in that Member State.

D. The requirement to avoid double taxation, non-taxation or distortion of competition (second question)

84By its second question, the referring court asks, in essence, whether point (b) of the first paragraph of Article 59a of Directive 2006/112 must be interpreted as meaning that the requirement to avoid ‘double taxation, non-taxation or distortion of competition’ is satisfied when roaming services such as those described in the first question, are not subject to a tax, comparable to VAT, in the third country concerned.

85As with the arguments put forward by the referring court itself and the Spanish Government and the Commission, I consider that any taxation in the third country concerned, namely, South Korea in the main proceedings, is irrelevant for the purposes of the application of that provision.

86Indeed, any other interpretation would result in the application of harmonised tax rules at EU level being subject to the tax treatment applied in a third country. While such a scenario is not, in itself, inconceivable, it must, in my opinion, be the subject of an express and unequivocal choice by the Union legislature. However, that is not the case with Article 59a of Directive 2006/112 which does not mention third countries.

87That interpretation is supported by the opinion expressed by the VAT Committee ²³ on this subject: ‘The VAT Committee unanimously agrees that the exercise of the option given by Member States to tax services effectively used and enjoyed on their territory does not depend on the tax treatment that the services are subject to outside the Community. In particular, the fact that a service may be taxed in a third country under the national rules of that country shall not prevent a Member State from taxing that service if it is effectively used and enjoyed on the territory of that Member State.’

88In reality, the expression ‘double-taxation, non-taxation or distortion of competition’ refers to tax treatment at EU level. In other words, use by a Member State of the options offered by Article 59a of Directive 2006/112 is subject to the existence of a case of double-taxation, non-taxation or distortion of competition at EU level.

89As regards, more specifically, point (b) of the first paragraph of Article 59a of Directive 2006/112, it is clear that the use of that provision cannot be justified by the desire to avoid double taxation, because it results, in practice, in taxation of the supply of services in question in the Member State concerned.

90In contrast, the use of that option may be justified by the desire to avoid non-taxation or distortion of competition within the EU.

91In the main proceedings, it is not disputed that the roaming services at issue are not subject to VAT in another Member State. Therefore, the Republic of Austria’s use of point (b) of the first paragraph of Article 59a of Directive 2006/112, with a view to relocating the place of supply of such services to its territory, with the result that they will be subject to Austrian VAT, is justified by the desire to avoid non-taxation within the EU.

92Consequently, I propose that the Court respond to the second question as follows. Point (b) of the first paragraph of Article 59a of Directive 2006/112 must be interpreted as meaning that the requirement to avoid ‘double taxation, non-taxation or distortion of competition’ is satisfied where roaming services such as those described in the first question are not subject to VAT within the EU, which constitutes a case of non-taxation within the meaning of that provision. In contrast, the tax treatment in a third country is irrelevant for the purposes of the application of that provision.

V. Conclusion

Conclusion

93Having regard to all of the foregoing, I propose that the Court should answer the questions referred for a preliminary ruling by the Bundesfinanzgericht (Federal Finance Court, Austria) as follows:

Point (b) of the first paragraph of Article 59a of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/88/EU of 7 December 2010 must be interpreted as meaning that roaming services allowing the use of a mobile telephone network located in a Member State, which are provided by a mobile telephone operator established in a third country to users having their permanent address or usually residing in that third country but temporarily staying in the territory of that Member State, must be considered as being the subject of ‘effective use’ on the territory of that Member State.

Point (b) of the first paragraph of Article 59a of Directive 2006/112, as amended by Council Directive 2010/88, must also be interpreted as meaning that the requirement of avoiding ‘double taxation, non-taxation or distortion of competition’ is satisfied where roaming services such as those described in the first question are not subject to VAT within the Union, which constitutes a case of ‘non-taxation’ within the meaning of that provision. The tax treatment in a third country is irrelevant for the purposes of the application of that provision.

¹ Original language: French.

² Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2010/88/EU of 7 December 2010 (OJ 2010 L 326, p. 1, ‘Directive 2006/112)’.

³ Council Directive 2010/88/EU of 7 December 2010 amending Directive 2006/112 (OJ 2010 L 326, p. 1). I would also point out that the provisions the interpretation of which is required in order to answer the questions referred for a preliminary ruling, and, in particular, Article 59a of Directive 2006/112, were last amended by Article 2 of Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112 (OJ 2008 L 44, p. 11).

⁴ I would point out that these provisions have been subject to substantial amendment since 1 January 2015 by virtue of Article 5 of Directive 2008/8, involving in particular the deletion of point (i) of the first paragraph of Article 59, the second paragraph of Article 59a, and Article 59b of Directive 2006/112.

⁵ If, as the Commission suggests, Austrian VAT was levied in error on the first supply of services, it is clear that SK Telecom has the right to a refund of that incorrectly levied tax. I would point out that this case differs from the VAT ‘refund’ procedure referred to in point 38 of this Opinion, the latter procedure concerning VAT which would have been duly levied but which SK Telecom could claim back if it has not carried out taxable transactions in Austria.

⁶ See, inter alia, judgments of 25 February 1999, CPP (C‑349/96, EU:C:1999:93, paragraphs 26 to 32); of 27 September 2012, Field Fisher Waterhouse (C‑392/11, EU:C:2012:597, paragraphs 13 to 28); and of 27 June 2013, RR Donnelley Global Turnkey Solutions Poland (C‑155/12, EU:C:2013:434, paragraphs 19 to 26).

⁷ See, inter alia, judgment of 27 September 2012, Field Fisher Waterhouse (C‑392/11, EU:C:2012:597, paragraph 14 and the case-law cited).

⁸ See, inter alia, judgment of 27 June 2013, RR Donnelley Global Turnkey Solutions Poland (C‑155/12, EU:C:2013:434, paragraph 21 and the case-law cited).

⁹ According to settled case-law, Articles 44 and 45 of Directive 2006/112 contain a general rule for determining the place where services are supplied for tax purposes, while Articles 46 to 59a of that directive provide a number of specific instances of such places. There is no pre-eminence of Articles 44 and 45 of Directive 2006/112 over Articles 46 to 59a thereof. It is necessary to consider in each situation whether it corresponds to one of the cases referred to in Articles 46 to 59a of that directive. If not, it falls within the scope of Articles 44 to 45 of Directive 2006/112 (see, inter alia, judgments of 8 December 2016, A and B, C‑453/15, EU:C:2016:933, paragraph 18; of 13 March 2019, Srf konsulterna, C‑647/17, EU:C:2019:195, paragraphs 20 and 21, and of 2 July 2020, Veronsaajien oikeudenvalvontayksikkö (Computing centre services), C‑215/19, EU:C:2020:518, paragraphs 51 and 54).

¹⁰ Under that provision telecommunication services mean ‘services relating to the transmission, emission or reception of signals, words, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception, with the inclusion of the provision of access to global information network’.

¹¹ See point 12 of this Opinion.

¹² Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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).

¹³ The following language versions use the conjunction ‘and’: see in particular the versions in French (‘l’utilisation et l’exploitation effectives’), English (‘effective use and enjoyment’), Italian (‘l’effettiva utilizzazione e l’effettivo impiego’), Spanish (‘la utilización y la explotación efectivas’), Dutch (‘het werkelijke gebruik en de werkelijke exploitatie’), Portuguese (‘a utilização e a exploração efectivas’) and Swedish (‘den egentliga användningen och utnyttjandet’). The following language versions use the conjunction ‘or’: see in particular the versions in German (‘tatsächliche Nutzung oder Auswertung’) and Danish (‘faktiske benyttelse eller udnyttelse’).

¹⁴ Judgment of 19 February 2009 (C‑1/08, EU:C:2009:108, paragraphs 28 to 33).

¹⁵ Proposal for a Council Directive on the common system of value added tax, COM(2004) 246 final, 15 April 2004, Article 58. See in particular the versions in English (‘effective use or enjoyment’), German (‘tatsächliche Nutzung oder Auswertung’), Danish (‘faktiske benyttelse eller udnyttelse’), French (‘l’utilisation ou l’exploitation effectives’), Italian (‘l’effettiva utilizzazione o l’effettivo impiego’), Spanish (‘la utilización o la explotación efectivas’), Dutch (‘het werkelijke gebruik of de werkelijke exploitatie’), Portuguese (‘a utilização ou a exploração efectivas’) and Swedish (‘den egentliga användningen eller det egentliga utnyttjandet’).

¹⁶ Language versions using the conjunction ‘and’: see in particular the versions in English (‘effective use and enjoyment’), Dutch (‘het werkelijke gebruik en de werkelijke exploitatie’) and Swedish (‘den faktiska användningen och det faktiska utnyttjandet’). Language versions using the conjunction ‘or’: see in particular the versions in German (‘tatsächliche Nutzung oder Auswertung’), Danish (‘faktiske benyttelse eller udnyttelse’), French (‘l’utilisation ou l’exploitation effectives’), Italian (l’effettiva utilizzazione o l’effettivo impiego), Spanish (la utilización o la explotación efectivas) and Portuguese (‘a utilização ou a exploração efectivas’).

¹⁷ Language versions using the conjunction ‘and’: see in particular the versions in English (‘effective use and enjoyment’), Italian (‘l’effettiva utilizzazione e l’effettiva fruizione’), Dutch (‘het werkelijke gebruik en de werkelijke exploitatie’), Portuguese (‘a utilização e a exploração efectivas’) and Swedish (‘den faktiska användningen och det faktiska utnyttjandet’). Language versions using the conjunction ‘or’: see in particular the versions in German (‘tatsächliche Nutzung oder Auswertung’), Danish (‘faktiske benyttelse eller udnyttelse’), French (‘l’utilisation ou l’exploitation effectives’) and Spanish (‘la utilización o la explotación efectivas’).

¹⁸ Council Directive of 18 February 2020 amending Directive 2006/112 (OJ 2020 L 62, p .13). That directive applies from 1 January 2025 by virtue of Article 3(1) thereof.

¹⁹ See, inter alia, judgments of 26 September 2013, Commission v Finland (C‑309/11, not published, EU:C:2013:610, paragraph 49), and of 12 October 2017, LombardIngatlan Lízing (C‑404/16, EU:C:2017:759, paragraph 21).

²⁰ See, in this regard, recital 3 of Directive 2008/8: ‘For all supplies of services, the place of taxation should, in principle, be the place where the actual consumption takes place. …’. See also judgment of 13 March 2019, Srf konsulterna (C‑647/17, EU:C:2019:195, paragraph 29). I would point out again, for the sake of completeness, that Directive 2008/8 significantly amended the regime resulting from Council Directive 1999/59/EC of 17 June 1999 amending Sixth Directive 77/388 (OJ 1999 L 162, p. 63). Consequently, the arguments put forward by SK Telecom and taken from the recitals to Directive 1999/59 are irrelevant in the present case.

²¹ VAT Committee, Guidelines resulting from the 89th meeting of 30 September 2009, Document B, Taxud.D.1(2010)176579, No. 645, available at https://ec.europa.eu/taxation_customs/sites/taxation/files/guidelines-vat-committee-meetings_en.pdf.

²² See point 35 of this Opinion.

²³ VAT Committee, Guidelines resulting from the 89th meeting of 30 September 2009, Document B, Taxud.D.1(2010)176579, No. 645, available at https://ec.europa.eu/taxation_customs/sites/taxation/files/guidelines-vat-committee-meetings_en.pdf.