C-796/23 Česká síť (Partners in a ‘company’)

JUDGMENT OF THE COURT (Tenth Chamber)

11 December 2025 ( *1 )

(Reference for a preliminary ruling – Taxation – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 9(1) – Concept of ‘taxable person’ – Partners in a civil law partnership devoid of legal personality – Article 193 – Determination of the taxable person liable to pay VAT)

In Case C‑796/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), made by decision of 29 November 2023, received at the Court on 21 December 2023, in the proceedings

Česká síť s. r. o.

v

Odvolací finanční ředitelství

THE COURT (Tenth Chamber),

composed of J. Passer, President of the Chamber, D. Gratsias and B. Smulders (Rapporteur), Judges,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

Česká síť s. r. o., by V. Křivánek, advokát,

the Czech Government, by L. Březinová, M. Smolek and J. Vláčil, acting as Agents,

the European Commission, by M. Herold and J. Hradil, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 3 July 2025,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of Article 9(1) and Article 193 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 by Council Directive 2013/43/EU of 22 July 2013 (OJ 2013 L 201, p. 4) (‘Directive 2006/112’).

2The request has been made in proceedings between Česká síť s. r. o., a Czech commercial company, and the Odvolací finanční ředitelství (Appellate Tax Directorate, Czech Republic), concerning an order that that company pay amounts due in respect of value added tax (VAT) and a penalty, on the ground that it was liable to pay that tax as a ‘designated partner’ for services provided to customers established in that Member State by undertakings with which it had cooperated and which were part of the same ‘partnership’ with it, within the meaning of Czech civil law.

Legal context

European Union law

3Article 9(1) of Directive 2006/112 is worded as follows:

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

Any activity of producers, traders or persons supplying services … shall be regarded as “economic activity”.’

4Article 11 of that directive provides:

‘After consulting the [VAT Advisory Committee], each Member State may regard as a single taxable person any persons established in the territory of that Member State who, while legally independent, are closely bound to one another by financial, economic and organisational links.

A Member State exercising the option provided for in the first paragraph, may adopt any measures needed to prevent tax evasion or avoidance through the use of this provision.’

5Article 193 of that directive provides:

‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199 and Article 202.’

6Article 287 of Directive 2006/112 states:

‘Member States which acceded after 1 January 1978 may exempt taxable persons whose annual turnover is no higher than the equivalent in national currency of the following amounts at the conversion rate on the day of their accession:

…

(7) Czech Republic: EUR 35000;

…’

Czech legislation

The Law on VAT

7At the time of the facts in the main proceedings, the zákon č. 235/2004 Sb., o dani z přidané hodnoty (Law No 235/2004 on VAT; ‘the Law on VAT’) contained a special scheme for the partners in a ‘partnership’ within the meaning of Paragraph 2716 of the zákon č. 89/2012 Sb., občanský zákoník (Law No 89/2012 establishing the Civil Code; ‘the Civil Code’).

8Paragraph 4a(3) of the Law on VAT provided that the turnover of a taxable person who was a partner in a ‘partnership’ within the meaning of Paragraph 2716 of the Civil Code (‘the partnership’) and effecting transactions which were eligible for a VAT deduction was to include the turnover achieved not only by that person independently outside of the ‘partnership’, but also by the entire ‘partnership’.

9Paragraph 73(7) of that law provided that, for taxable transactions effected for the ‘partnership’s’ activities, the right to deduct VAT was to be exercised by the ‘designated partner’.

10Paragraph 100(4) of that law provided that taxable persons for the purposes of VAT who were partners in the same ‘partnership’ were obliged to keep separate accounting records for VAT purposes for the activity for which they established the ‘partnership’ and that those accounting records were to be kept for the ‘partnership’ by the designated partner who, on behalf of the ‘partnership’, was to discharge all obligations and exercise the rights arising from that law for the other partners.

The Civil Code

11Paragraph 2716 et seq. of the Civil Code lay down the rules governing the entity called the ‘partnership’, that is to say, an association of persons devoid of legal personality.

12Paragraph 2737 of the Civil Code provides that (i) if a partner deals with a third party in a common matter, that partner is to be deemed to be a mandatary of all the partners; (ii) if the partners agree otherwise, that fact cannot be invoked against a third party acting in good faith; (iii) if a partner deals with a third party in a common matter on his, her or its own behalf, the other partners may assert the rights arising therefrom, but the third party is to be bound only vis-à-vis the person with whom that third party had legal dealings; and (iv) that provision is not to apply if the third party was aware that the partner was acting on behalf of the ‘partnership’.

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

13In 2017, Česká síť cooperated with three companies established in the United States and operating in the Czech Republic through branch offices (‘the branch offices concerned’).

14Česká síť and the branch offices concerned provided services to end customers consisting principally in providing them with internet connections. Each of those branch offices dealt with its own customers and acted in its own name, and recorded income from those services for 2017.

15The sole partner of Česká síť signed the contractual documents on behalf of the branch offices concerned and stated therein some of the contact information of Česká síť, in particular its website and email address. Furthermore, in 2009 and 2010, that company transferred to those branch offices over 170 of its customers free of charge. It provided those branch offices with the necessary infrastructure and itself purchased the internet connections needed by the end customers. All customers were connected to the internet via the same access point. The branch offices concerned did not declare any tangible or intangible assets, nor any wage costs, in the Czech Republic.

16In November 2020, the Finanční úřad pro Plzeňský kraj (Tax Office, Pilsen , Czech Republic) issued 12 tax adjustment notices addressed to Česká síť for VAT due in respect of the monthly tax periods from January to December 2017. For each of those periods, it assessed the VAT due at 30713 Czech koruny (CZK) (a total of CZK 368556) and ordered Česká síť to pay a penalty (a total of CZK 73704).

17Those tax adjustment notices were based on the consideration that there were links between Česká síť and the branch offices concerned which led the tax authorities to conclude that there was a ‘partnership’, of which Česká síť was the ‘designated partner’. As such, it was liable to pay VAT for the entire ‘partnership’. Thus, those authorities calculated the VAT due by Česká síť by including in the tax base both taxable transactions effected by it and those effected by the branch offices concerned, as partners in the ‘partnership’.

18Česká síť brought an administrative appeal against those tax adjustment notices, which was dismissed. It then brought an appeal before the Krajský soud v Plzni (Regional Court, Pilsen, Czech Republic), which was dismissed. Lastly, it brought an appeal on a point of law before the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), which is the referring court.

19Before the latter court, Česká síť has argued that the special scheme for partners in a ‘partnership’ contained in the Law on VAT at the time of the facts in the main proceedings was contrary to Directive 2006/112 inasmuch as that scheme allowed the tax authorities to deem it liable to pay VAT not only for its own taxable activities, but also for those of the branch offices concerned on the ground that, like it, they were part of the same ‘partnership’.

20That court states, first of all, that that special scheme was not intended to transpose the VAT rules applicable to a ‘group of persons’, as provided for in Article 11 of Directive 2006/112; next, that Paragraph 5a(1) of the Law on VAT, which was intended to make that transposition effective, provides that a member of a group cannot at the same time be a partner in a ‘partnership’; and, lastly, that the tax authorities did not claim that Česká síť was part of such a group, within the meaning of the aforementioned Article 11.

21The referring court observes that it finds that the cooperation between Česká síť and the branch offices concerned met the criteria required for the structure of their activities to be categorised as a ‘partnership’, the existence of a written contract not being necessary in that regard.

22However, that court states that it shares the reservations of Česká síť inasmuch as, in its view, the latter should not have been deemed liable to pay VAT in respect of the taxable services provided by the branch offices concerned to their end customers, notwithstanding the fact that, under the relevant civil law rules, Česká síť and those branch offices constituted a single ‘partnership’.

23The referring court, further, takes the view that it is also necessary to examine the circumstances in which the partner in the ‘partnership’ that dealt with end customers in the context of the taxable transactions at issue before it intervened, since there may be situations in which a single partner in such a ‘partnership’ can bind all the partners.

24This would, in particular, be the case when such a partner complies with the procedure provided for in Paragraph 2737(1) of the Civil Code, namely where that partner acts in a common matter as a mandatary of all the partners and on the basis of a power of attorney from them, which implies that that partner acts in the name and on behalf of all the partners and that that partner’s acts bind them jointly and severally under Paragraph 2736 of that code.

25In the present case, with regard to the manner in which the associated legal entities of the ‘partnership’, operating through the branch offices concerned, dealt with the end customers through those branch offices, the referring court notes that the latter acted in their own name and that the service contracts were concluded by them and not by Česká síť. The fact that the contractual documents may have contained some of that partnership’s contact details has no bearing on the identification of the taxable person for the taxable transactions at issue.

26It is also not apparent from the administrative file that the branch offices concerned ever referred to Česká síť, in their agreements or their relations with end customers, in a manner that could identify Česká síť as a partner.

27In those circumstances, the Nejvyšší správní soud (Supreme Administrative Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Is [the] situation in which, pursuant to special national [VAT] arrangements for “[partnerships]” (associations of persons that do not have legal personality), a “designated partner” is liable for the payment of the VAT for the entire [partnership], despite the fact that another partner had dealt with the end customer in relation to the supply of services, compatible with [Directive 2006/112], in particular with Article 9(1) and Article 193 thereof?

Does the compatibility of the situation with Directive [2006/112] depend on whether the other partner had overstepped the rules of representing the [partnership] and dealt in his, her or its own name with the end customer?’

Consideration of the question referred

28By its preliminary question, the referring court asks, in essence, whether Article 9(1) and Article 193 of Directive 2006/112 must be interpreted as precluding national legislation which provides that one of the partners in a civil law partnership devoid of legal personality separate from that of its partners and providing taxable services – referred to as the ‘designated partner’ – is to be deemed to be the person liable to pay VAT in respect of taxable services provided by the other partners in that partnership, even though those other partners have dealt with their end customers for the provision of those services, and that it is irrelevant in that regard that, in order to do so, those other partners have departed from the rules of civil law governing the representation of that partnership in relations with third parties by dealing with their end customers in their own name.

29According to settled case-law, the terms used in Article 9 of Directive 2006/112, in particular the term ‘any person who’, give to the notion of ‘taxable person’ a broad definition focused on independence in the pursuit of an economic activity, to the effect that all persons – natural or legal, both public and private, and entities devoid of legal personality – who, in an objective manner, satisfy the criteria set out in that provision must be regarded as being taxable persons for the purposes of VAT (judgment of 16 February 2023, DGRFP Cluj, C‑519/21, EU:C:2023:106, paragraph 69 and the case-law cited).

30In order to determine who must be regarded in respect of the taxable transactions at issue as a ‘taxable person’ for the purposes of VAT, it is necessary to establish who has independently carried out the economic activity referred to. The criterion of independence concerns allocation of the transaction concerned to a particular person or entity, whilst also guaranteeing that that person or entity can exercise any right of deduction with legal certainty (see, to that effect, judgment of 16 February 2023, DGRFP Cluj, C‑519/21, EU:C:2023:106, paragraph 70 and the case-law cited).

31To that end, it is apparent from settled case-law that it is necessary to examine whether the person concerned carries out an economic activity in his or her own name, on his or her own behalf and under his or her own responsibility, and whether he or she bears the economic risk associated with the carrying out of those activities (judgment of 16 February 2023, DGRFP Cluj, C‑519/21, EU:C:2023:106, paragraph 71 and the case-law cited).

32It also follows from the Court’s case-law that, where a person acts alone in relations with third parties, in their own name and on their own behalf, and assuming by themselves the economic risk associated with the taxable transactions at issue, the fact that that person has entered into a contract designating them as acting, in relations with third parties, on behalf of all the contracting parties or of the entity constituted by that contract cannot affect their status as a taxable person (see, to that effect, judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraphs 43 to 47).

33Furthermore, the proven existence of even close cooperation between several undertakings cannot suffice to call into question their independence for the purposes of Article 9(1) of Directive 2006/112. The choice of a type of cooperation is the result of a choice made in the organisation of those undertakings and cannot, on its own, warrant the conclusion that they do not carry out their activities independently or that they do not bear the economic risk associated with their economic activity (see, to that effect, judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraphs 31 and 32).

34In the present case, while it is for the referring court, which has sole jurisdiction to assess the facts, to determine, in the light of the case-law referred to above, whether the entities at issue, namely the branch offices concerned, must be regarded as ‘independently’ carrying out the economic activity at issue, the Court, which is called on to provide answers of use to the referring court, may provide guidance, based on the case file in the main proceedings and on the written observations that have been submitted to it, in order to enable the national court to give judgment in the particular case pending before it (see, to that effect, judgment of 16 February 2023, DGRFP Cluj, C‑519/21, EU:C:2023:106, paragraphs 72 and 73 and the case-law cited).

35In that regard, it is apparent from the information provided by the referring court that that court considers that, at the time of the facts in the main proceedings, in accordance with the relevant civil law rules, Česká síť and the branch offices concerned must be regarded as the partners in a single ‘partnership’, that is to say a civil law partnership devoid of separate legal personality, the existence of a written contract not being necessary to reach that assessment.

36Therefore, according to that court, under the rules of the Law on VAT laying down a special scheme for such partners, which were applicable at the time of the facts in the main proceedings, Česká síť, as a ‘designated partner’ of a ‘partnership’, had the status of a ‘taxable person’ for VAT purposes, within the meaning of Article 9(1) of Directive 2006/112, with regard not only to its own taxable services, but also to the services provided by the other partners in the ‘partnership’ and was liable to pay the VAT due on all such services under Article 193 of that directive.

37That court further observes that that special scheme, as provided for by the Law on VAT at the time of the facts in the main proceedings, was not intended to transpose Article 11 of Directive 2006/112 and that the applicability of the rules of national law making that transposition effective has not been relied on by the tax authorities, although it does note a set of facts tending to suggest that Česká síť and the branch offices concerned were closely bound to one another by financial, economic and organisational links within the meaning of Article 11(1) of that directive.

38However, it should be noted, as also pointed out, in essence, by the Advocate General in points 34 to 38 of her Opinion, that the possibility that, in view of those close links, the application of national rules transposing Article 11 of Directive 2006/112 could, in the present case, allow Česká síť and the branch offices concerned to be treated as a single taxable person notwithstanding the fact that they are legally independent does not seem to be excluded, if it were to be demonstrated that the distribution of sales between those four companies, which all appear to be controlled, directly or indirectly, by the sole partner of Česká síť, results from a purely artificial arrangement constituting an abuse. Such a finding would mean that the exemption provided for in point 7 of Article 287 of Directive 2006/112 for the Czech Republic would not be applicable since the combined turnover of those companies would exceed the threshold provided for in that provision.

39If that finding cannot be made, it will be for the referring court to determine, in the light of the case-law referred to in paragraphs 29 to 33 of the present judgment, whether Česká síť or the branch offices concerned have the status of a taxable person for VAT purposes within the meaning of Article 9(1) of Directive 2006/112 in respect of taxable services provided by those branch offices. They will have that status if it is established that they provided those services while acting independently of Česká síť. This will be the case if it is established that those branch offices carried out the economic activity in question in their own name, on their own behalf and under their own responsibility, and if they bear the economic risk associated with carrying out those activities.

40In that regard, in the light of the information provided by the referring court and subject to verification by that court in the light of all the relevant facts of the main proceedings, the Court finds that, despite the involvement of Česká síť in the organisation of the provision of services to end customers by the branch offices concerned, those branch offices appear to be the taxable persons in respect of those services.

41As stated by that court, those branch offices provided taxable services to their own end customers, which consisted mainly of providing internet connections. Each of those branch offices performed those services in its own name and recorded the income which it derived therefrom in the relevant tax year.

42In the light of the case-law recalled in paragraph 33 of the present judgment, the fact that, in their relations with third parties, the branch offices concerned essentially presented themselves without directly mentioning the ‘partnership’ or one of its partners, in particular Česká síť, as the contracting party, even though the contractual documents contained certain elements that could prima facie indirectly identify the latter, is of particular importance in that regard.

43The importance of that circumstance lies, in particular, in the fact that an application of the criteria for identifying the taxable person for VAT purposes in the context of the provision of taxable services by different operators who are legally independent but closely bound to one another by financial, economic and organisational links must ensure that such identification is relatively predictable and, ultimately, provide legal certainty for the third-party operators concerned, so that, especially, those operators can exercise any right of deduction with legal certainty, as required by the principle established by the case-law referred to in paragraph 30 of the present judgment.

44The question concerning the potential impact on the answer to the question referred of the fact that, in order to carry out the taxable transactions at issue in the main proceedings, the branch offices concerned departed from the rules of national law on the representation of the ‘partnership’ in relations with third parties, in that they dealt with the end customer in their own name, must be answered in the negative.

45The fact that those branch offices did not appear in relations with third parties under the rules governing the representation of the ‘partnership’ provided for by the applicable national civil law is irrelevant to determining whether Česká síť or the branch offices themselves are liable to pay VAT in respect of the taxable services provided by those branch offices. Its sole consequence is that the ‘partnership’ cannot be regarded as having provided those services itself and therefore cannot be regarded as a taxable person for VAT purposes in respect of those services (see, to that effect, judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraph 45).

46Lastly, in the present case, if none of the exceptions provided for in Article 193 of Directive 2006/112 were to apply, which it is for the referring court to ascertain, it would follow from that provision that the taxable person for VAT purposes in respect of the provision of services carried out by the branch offices concerned would also be liable to pay VAT.

47The Court finds that if, once the various checks to be carried out by the referring court have been completed, it were to hold that, under Article 9(1) and Article 193 of Directive 2006/112, the branch offices concerned are the ones liable to pay VAT in respect of the taxable services provided by them, the latter provision would preclude the VAT burden from being placed on Česká síť pursuant to national legislation such as that at issue in the main proceedings, on the ground that it is the ‘designated partner’ of a ‘partnership’ which includes those branch offices as partners.

48In the light of all the foregoing considerations, the answer to the question referred is that Article 9(1) and Article 193 of Directive 2006/112 must be interpreted as precluding national legislation which provides that one of the partners in a civil law partnership devoid of legal personality separate from that of its partners and providing taxable services – referred to as the ‘designated partner’ – is to be deemed to be the person liable to pay VAT in respect of taxable services provided by the other partners in that partnership, even though those other partners have dealt with their end customers for the provision of those services, and that it is irrelevant in that regard that, in order to do so, those other partners have departed from the rules of civil law governing the representation of that partnership in relations with third parties by dealing with their end customers in their own name.

Costs

49Since 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 (Tenth Chamber) hereby rules:

Article 9(1) and Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/43/EU of 22 July 2013,

must be interpreted as precluding national legislation which provides that one of the partners in a civil law partnership devoid of legal personality separate from that of its partners and providing taxable services – referred to as the ‘designated partner’ – is to be deemed to be the person liable to pay value added tax in respect of taxable services provided by the other partners in that partnership, even though those other partners have dealt with their end customers for the provision of those services, and that it is irrelevant in that regard that, in order to do so, those other partners have departed from the rules of civil law governing the representation of that partnership in relations with third parties by dealing with their end customers in their own name.

Signatures

[Signatures]

( *1 ) Language of the case: Czech.

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 3 July 2025 ¹

Case C‑796/23

(Request for a preliminary ruling – Tax legislation – Value added tax – Directive 2006/112/EC – Article 9(1) – Concept of taxable person – Legal capacity – Allocation of turnover to a taxable person – Joint action by several persons as members of a ‘society’ that does not have legal personality – Determination of the person liable for payment of the tax)

I. Introduction

1In the present case, the Court of Justice must ultimately ‘only’ clarify the identity of the taxable person who has carried out a transaction and who is therefore also liable for the corresponding VAT. That classic question arises in the context of an interaction of four legal persons, some of whom appear to fall below the small enterprise threshold. If all the transactions, added together, had been carried out by a single ‘society’ made up of those four legal persons, that threshold would probably be exceeded.

2The referring court regards as problematic the interaction between civil law and tax legislation and the earlier and sometimes current understanding of tax law as a follow up law of national civil law in some Member States. In any event, that is hardly convincing since VAT legislation is an area harmonised by EU law.

3However, EU VAT legislation must deal with the fact that the respective national civil law permits, for example, societies that do not have legal personality (and are therefore not legal persons), but which may nevertheless, through their partners, validly act as a society in legal relations. This is the case, for example, of a ‘society’ within the meaning of the Czech Civil Code. It is an association of persons that does not have legal personality (a traditional Roman-law concept, societas in Latin; ‘society’) of a kind that exists in many Member States. ² Is the taxable person only one who also has its own legal personality or is legal capacity sufficient for that purpose?

4If legal capacity is sufficient, the question arises as to which are the cases where the society carries out a relevant taxable transaction and which are the cases where it is the acting partner that does so. A partner may be also economically active as a natural person or, as in the present case, as a legal person. This is relevant to the tax liability and the deduction of input tax. The implications may be significant if – as in the present case – a de facto society is retroactively assumed in respect of which, under national law, one of the partners is to be liable to pay all taxes.

II. Legal framework

A. European Union law

5The legal framework of the present case is formed by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ³ (‘the VAT Directive’).

6The first sentence of Article 9(1) of the VAT Directive provides:

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

…’

7Article 11 of the VAT Directive allows Member States to regard several persons as a single taxable person. It is worded as follows:

‘After consulting the advisory committee on value added tax (hereafter, the “VAT Committee”), each Member State may regard as a single taxable person any persons established in the territory of that Member State who, while legally independent, are closely bound to one another by financial, economic and organisational links.

A Member State exercising the option provided for in the first paragraph, may adopt any measures needed to prevent tax evasion or avoidance through the use of this provision.’

8Article 193 of the VAT Directive concerns the person liable for payment of the tax and provides:

‘VAT shall be payable by any taxable person carrying out a taxable supply of goods or services …’

B. Czech law

– Civil law

9Zákon č. 89/2012 Sb., občanský zákoník, (Law No 89/2012 establishing the Civil Code; ‘the Civil Code’) regulates what is known as the ‘society’ in Paragraph 2716 et seq. (‘the society’).

10Pursuant to Paragraph 2716(1) of the Civil Code, a society is formed where several persons undertake in a contract to associate as partners to pursue the shared purpose of conducting an activity or engaging in a project. The contract need not be written in order for a society to be formed.

11Pursuant to Paragraph 2727(1) of the Civil Code, a partner shall not, without the consent of the other partners, do anything on his, her or its own or another person’s behalf that is of a competitive nature with their shared purpose. Pursuant to Paragraph 2727(2) thereof, where a partner has acted on his, her or its own behalf, the other partners may demand that the actions of the partner be declared made on their common behalf.

12Pursuant to Paragraph 2736 of the Civil Code, the partners are jointly and severally liable to third parties for any debts arising from their shared activities. Pursuant to Paragraph 2737 thereof, where a partner deals with a third party in a shared affair, he, she or it shall be deemed to be a mandatary of all the partners. If the partners agree otherwise, this cannot be held against a third party acting in good faith. Where a partner has acted on his, her or its own behalf in a shared activity with respect to a third party, the other partners may exercise the rights arising therefrom, but the third party shall only be bound vis-à-vis the person who had engaged in legal conduct with respect to him, her or it. This shall not apply if the third party was aware that the partner had been acting on behalf of the society.

– Tax regulations

13Zákon č. 235/2004 Sb., o dani z přidané hodnoty (Law No 235/2004 on Value added tax; ‘the VAT Law’) transposes the VAT Directive, but, until 30 June 2017, contained, inter alia in Paragraphs 4a and 6a, special VAT arrangements applicable to taxable persons who were partners in a society under Paragraph 2716 of the Civil Code.

14With effect from 1 July 2017, amendment law No 170/2017 amended the VAT Law, bringing to an end the special regime for those societies. According to the explanatory memorandum for amendment law No 170/2017, the amendment will bring the VAT Law ‘in line with the value added tax directive and general value added tax principles’.

15According to Paragraph 5(1) of the VAT Law, a taxable person is a person or a group who independently carries out an economic activity. A taxable person is also a legal person that has not been founded or established for the purpose of engaging in business, as long as it carries out economic activities. Typically, a taxable person becomes a taxpayer if, pursuant to Paragraph 6(1) of the VAT Law, its turnover for a maximum of the 12 immediately preceding consecutive calendar months exceeds the set amount (at the time of the defendant’s decision, it was 1 million Czech koruny (Czech crowns (CZK)).

16In terms of the calculation of turnover for VAT purposes, pursuant to Paragraph 4a(3) of the VAT Law, which was abolished in 2017, the turnover of a taxable person who is a partner of a society within which transactions are being made that are eligible for a tax deduction shall include the turnover achieved (a) by that person independently outside of the society, and (b) by the entire society.

17As regards the determination of the taxpayer, Article 6a of the VAT Law, which was also abolished in 2017, provided that a taxable person who (a) is a partner in a society within which transactions are being made that are eligible for a tax deduction, shall be a taxpayer from the day on which any of the other partners has become a taxpayer, unless he, she or it becomes a taxpayer on an earlier occasion pursuant to this law, and (b) becomes a member in a society within which transactions are being made that are eligible for a tax deduction together with the taxpayer, shall be a taxpayer from the day on which he, she or it became a partner. Pursuant to Paragraph 95 of the VAT Law, if a taxable person who is a partner in a society becomes a taxpayer, he, she or it shall inform the other partners of the society within 15 days of the day on which he, she or it became a taxpayer.

18Pursuant to Paragraph 100(4) of the VAT Law, taxpayers who are partners of the same society are obliged to keep a separate record for value added tax purposes of the activity for which they have associated. That record shall be kept for the society by a designated partner, who shall perform for the society all obligations and exercise all rights arising from this law for the other partners.

19Furthermore, Paragraph 101b(2) of the VAT Law stated that a taxpayer who, as a partner designated in this manner, maintains a record for the society for VAT purposes, shall include in his, her or its tax return the supply that is eligible for a tax deduction and the tax on his, her or its own activities as well as the transaction that is eligible for a tax deduction and the tax on the activities of the entire society.

20Pursuant to Paragraph 74(7) of the VAT Law, only the designated partner may claim VAT deduction with respect to taxable supply used for the society’s activities. The other partners shall include in their tax returns only supplies that are eligible for a tax deduction and the tax on their own activities.

III. The dispute in the main proceedings

21Česká síť s.r.o. (‘the applicant’) is a limited-liability company with its seat in the Czech Republic. In 2017, the applicant cooperated with several corporations based in the USA (‘the US corporations’) that operated in the Czech Republic through their branch offices (the following legal entities were concerned: CESKA SIT OPTICS LLC, KDYNSKY INTERNET LLC, and CESKA SIT LLC).

22All legal entities (the applicant and the three US corporations or, more precisely, their branches operating in the Czech Republic) provided services to end customers (in particular, internet connection). Each of the legal entities, acting in its own name, was in contact with a different group of customers. Hence, for 2017, each of the legal entities had revenue from the provision of services (in the case of the branch offices of the US corporations, the annual revenues were between CZK 645,000 and CZK 748,000).

23The executive representative and sole partner of the applicant was, at the same time, the head of the branch offices of all three US legal entities (signing contractual documentation for the branch offices, and in doing so, he also stated some of the applicant’s contact information, for example, its website and e-mail address). He was the only person de facto managing both the applicant and the branch offices of all three legal entities mentioned above. In 2009 and 2010, the applicant transferred to the US corporations’ branch offices over 170 of its existing clients, free of charge. The applicant provided the necessary infrastructure to the branch offices and itself purchased connectivity (for example, all customers were connected to the internet via the same access point). By contrast, the branch offices of the US corporations did not have any tangible or intangible assets and had no wage costs.

24On the basis of those links, the tax authorities concluded, that, pursuant to Paragraph 2716 of the Civil Code, de facto a society existed (that is to say, an association of persons that do not have legal personality).

25On the basis of special rules in the Czech VAT Law for societies pursuant to Paragraph 2716 of the Civil Code, the applicant, as the ‘designated partner’, was responsible for paying VAT for the entire society. Consequently, the tax administrator calculated the applicant’s VAT by including in the tax base both chargeable transactions made by the applicant in 2017 and the revenue of the branch offices of the US corporations as partners of the society.

26In November 2020, the tax authority issued a total of 12 notices of additional assessment. The applicant appealed unsuccessfully to the Appellate Tax Directorate (‘the defendant’) and then also failed in its action before the Krajský soud (Regional Court, Czech Republic). The applicant is now defending itself by lodging an appeal in cassation before the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic).

27In its appeal on cassation, the applicant claims that the special VAT arrangement for societies and their partners, pursuant to Czech law, was contrary to the VAT Directive. Ultimately, Czech legislation resulted in the tax authority taxing the applicant not only on the basis of its own transactions, but also on the basis of foreign transactions. The defendant, by contrast, disagrees with that argumentation. In its view, the special regulation for societies was not contrary to EU law. The legislator repealed the previous regulation, not because it was contrary to EU law, but due to problems in its application.

IV. The request for a preliminary ruling and the procedure before the Court

28The Nejvyšší správní soud (Supreme Administrative Court, Czech Republic) decided to stay the proceedings and to refer the following two questions to the Court of Justice for a preliminary ruling pursuant to Article 267 TFEU:

Is a situation in which, pursuant to special national value added tax arrangements for ‘societies’ (associations of persons that do not have legal personality), a ‘designated partner’ is liable for the payment of the VAT for the entire society, despite the fact that another partner had dealt with the end customer in relation to the supply of services, compatible with [Council Directive 2006/112/EC], in particular with Article 9(1) and Article 193 of the Directive?

2Does the compatibility of the situation with Directive 2006/112/EC depend on whether the other partner had overstepped the rules of representing the society and dealt in his, her or its own name with the end customer?’

29In the proceedings before the Court, written observations were submitted by the applicant, the Czech Republic and the European Commission. In accordance with Article 76(2) of the Rules of Procedure of the Court of Justice, the Court did not consider it necessary to hold a hearing.

V. Legal assessment

30In essence, by its two questions, which can be answered together, the referring court asks who must be regarded as a taxable person where a partner of a society has supplied to a third party an independent service in his or her own name, possibly in breach of the ‘prohibition of competition’ laid down in Paragraph 2727(1) of the Civil Code. In that regard, the referring court assumes the existence of a society under Czech law.

31It is on that premiss that this Opinion is based, even though the common purpose of the activity or business pursued by the four undertakings concerned in becoming associated as partners is not entirely clear from the order for reference in the present case. As a general rule, not every cooperation between different persons results in the formation of a ‘societas’ with legal capacity (society). However, it is ultimately for the referring court to make that finding.

32The legal question to be resolved when the existence of a society is assumed requires a more detailed examination of the concept of taxable person and the relevance of the respective national civil law for the determination of that concept (see Section B.). In the event that the society is the taxable person, the question arises whether a Member State may, instead of the society, treat only one of the partners (under Czech law, the designated partner) as a taxable person and ‘allocate’ to him or her or it the company’s transactions or whether VAT legislation requires the society also to be treated administratively as a separate taxable person (see Section C.).

33Since those questions in the main proceedings clearly arise only because some of the partners in the society themselves remained below the small enterprise threshold, I will first examine the conditions under which abusive arrangements may be avoided (see Section A.).

A. Whether there is improper exploitation of the small enterprise threshold

34The exemption for small enterprises exemption (Article 287 of the VAT Directive) refers to the individual taxable person and its transactions. Since that exemption is not objectively linked to the nature of the activity, but only to the fact that the individual taxable person has not reached a certain turnover threshold, Article 287 of the VAT Directive provides for a subjective tax exemption. As the Court has already ruled ⁴ and I have stated elsewhere, ⁵ the purpose of this subjective exemption lies primarily in administrative simplification.

35Without such a threshold, the tax authorities would have to treat any person who carries on even a minimal economic activity for the purposes of Article 9 of the VAT Directive as a taxable person from the first euro received. This would give rise to administrative cost not only for the taxable person but also for the tax authorities, for which there would be no corresponding tax revenue. ⁶ The de minimis threshold in Article 287 of the VAT Directive is designed to prevent such a situation from arising. ⁷

36The fact that a partner attempts not to exceed that turnover ceiling per year cannot in itself constitute abuse, since in such a case the meaning and purpose of the subjective tax exemption (relieving the burden on the tax authorities and the taxable person) are fulfilled. ⁸ The position may be different only in so far as the arrangement chosen (allocation of sales between four controlled companies) constitutes an abusive arrangement. ⁹ The reasons given by the tax authorities as to why the present case concerns a de facto society could be understood in that sense. In its observations, the Czech Republic also proceeds from the principle of an artificial arrangement. Ultimately, only the referring court can assess and establish whether such an arrangement exists, although the Court may provide guidance in that regard.

37First, it is common ground that a taxable person cannot abusively rely on the rights to a deduction, to an exemption or to a VAT refund provided for by the VAT Directive. ¹⁰ At the same time, however, not every activity optimising tax may be classified as ‘an unlawful exercise of the right’. On the contrary, abuse must be ruled out and the situation accepted as it arises ‘where it has not been established that there is a wholly artificial arrangement which does not reflect economic reality and is set up with the sole aim or, at the very least, with the essential aim, of obtaining a tax advantage the grant of which would be contrary to the purposes of that directive’. ¹¹

38As can be seen from the legislative history of Article 11 of the VAT Directive, the legislature saw the risk of abuse of the exemption thresholds by several controlled taxable persons and has given the Member States the possibility, in certain circumstances, of grouping several persons into a single taxable person. ¹² However, that applies only in so far as those persons are closely bound to one another by financial, economic and organisational links.

39If, therefore, the cooperation of the three US corporations and the applicant were comparable with such an arrangement and sought primarily to remain, in whole or in part, below the turnover thresholds of the small enterprise exemption, that arrangement could possibly be classified as an artificial arrangement and thus ignored. If the applicant were to be regarded as the ‘mastermind’ of the arrangement (that is to say, as the controlling company), the transaction could then be allocated to it and the applicant subjected to the relevant tax. In that case, the assumption of the existence of a de facto society would not be necessary at all.

B. The identity of the taxable person that carried out the transactions

40If, on the other hand, such an artificial arrangement cannot be assumed to exist, the decisive factor is who carried out the relevant transactions (provision of internet connections) and is therefore liable to collect the corresponding VAT from the recipients of the services and to pay it. That is precisely what the referring court seeks to identify by its two questions, which can be examined together. The possibilities are the acting partner (according to the applicant) or the society (comprising the applicant and the three US corporations, according to the tax authority), which does not have legal personality under national law.

41In that regard, it must first be determined who can be a taxable person within the meaning of the VAT Directive (see Section 1.). Next, the question arises as to the criteria according to which it is necessary to determine, in the specific case, which of the taxable persons in question is liable for the VAT on the services (provision of internet connections). That is a question of the allocation of the specific transactions to one of the taxable persons in question (see Section 2.).

1. The capacity to be a taxable person

42Pursuant to the first sentence of Article 9(1) of the VAT Directive, ‘taxable person’ means any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity. ¹³

43According to the case-law of the Court, the terms used in Article 9(1) of the VAT Directive, in particular the term ‘any person who’, give to the notion of ‘taxable person’ a broad definition. ¹⁴ The focus here is on independence in the pursuit of an economic activity to the effect that all persons – natural or legal, both public and private, even entities devoid of legal personality – which in an objective manner satisfy the criteria set out in that provision must be regarded as taxable persons for the purposes of VAT. ¹⁵

44Thus, according to the Court, in order to establish that an economic activity is being carried out in an independent manner, it is necessary to examine whether the person concerned performs its activities in its own name, on its own behalf and under its own responsibility, and whether it bears the economic risk associated with the exercise of those activities. ¹⁶ On the other hand, it is irrelevant in what legal form those activities are carried out (natural person, legal person or partnership) and whether national law confers legal personality on that legal form. ¹⁷ Consequently, the fact that national civil law grants certain societies, but not others, legal personality is irrelevant for the purposes of VAT legislation.

45The only decisive factor is that the person concerned carries out an economic activity. Economic activity, however, presupposes that the national legal system confers on that person the capacity to take (economic) action in legal relations. ¹⁸ However, only those who are able to hold rights and obligations, and thus have legal capacity, can take action in legal relations. It follows that legal capacity is an essential condition for being regarded as a taxable person for the purposes of VAT legislation. If it has not been fulfilled – this is often the case for merely real communities (in Germany, for example, this applies to co-ownership by defined shares) – it is also not possible to carry out an economic activity independently.

46That is confirmed, on the one hand, by the Court’s case-law on the existence of a taxable service. The Court emphasised that, in order for there to be a taxable transaction by a taxable person, there must be a legal relationship between the parties pursuant to which the services and the consideration are exchanged. ¹⁹ However, only a person with legal capacity can establish a legal relationship.

47That is corroborated, on the other hand, by the Court’s case-law on the function of the taxable person in the VAT system. ²⁰ In that context, the Court has held that the taxable person performs the function of tax collector on behalf of the State. ²¹ However, it is only possible for an actor with legal capacity to indicate taxes on an invoice, to collect them by means of the price or to enforce them. That is why the Court has already ruled that a form of cooperation that does not have legal capacity (that is to say, a community with no power of action or a silent partnership) does not have the capacity to be a taxpayer. ²²

48A society pursuant to Czech law appears to be in a position to have its own rights and obligations. If that is the case, each of the partners (as a legal person) alone or the society they form may be regarded as a taxable person and supplier of services.

2. Allocation of specific transactions to a taxable person

49It is therefore necessary to answer the decisive question as to the taxable person to whom the taxable transactions are to be allocated in the present case. That person is then liable for VAT.

50The case-law cited above (see point 43 et seq.) provides a starting point. According to that case-law, in order to establish that an economic activity is being carried out in an independent manner, it is necessary to examine whether the person concerned performs his activities in his, her or its own name, on his, her or its own behalf and under his, her or its own responsibility, and whether he, she or it bears the economic risk associated with the carrying-out of those activities. ²³ That is because, where there are several possible taxable persons, only one taxable person can ultimately fulfil those criteria. As far as I am aware, it is not possible to act fully in one’s own name and in the name of a third party at one and the same time.

51These criteria established by the Court also guarantee that the customer can exercise any right of deduction with legal certainty as, according to Article 226, point 5, of the VAT Directive, the customer requires an invoice with the full name and address of the taxable person supplying the service in order to do so. However, he, she or it can only verify that information on the invoice if he, she or it knows who has acted in relation to him, her or it (that is, outwardly). ²⁴ In that sense, what is decisive in the present case is who provided the services to each respective customer in light of those criteria.

52According to the referring court, each of the partners carried out its transactions in its own name with a different category of customers. The fact that instead of the partner, a society dealt with a third party is not apparent from the request for a preliminary ruling. It therefore already follows from those circumstances – as the Commission also rightly states – that each of the partners acted as a taxable person.

53That conclusion cannot be called into question by any conceivable internal agreement to the effect that no outward representation by any one of them on their own is allowed. That would already run counter to the idea of a simple and efficient VAT system. ²⁵ Such internal restrictions – which may result, in the present case, from national civil law – do not prevent the person dealing with third parties (in this case, the partner concerned) from acting independently. On the contrary, he, she or it has in any event initially acted alone, on his, her or its own behalf and at his, her or its own risk and is therefore the taxable person liable for payment of the VAT incurred on the transaction.

54The way in which the case is to be assessed where, pursuant to Paragraph 2727(2) of the Civil Code, the other partners demand that an action taken on one partner’s own account, contrary to internal agreement, be treated as an action taken on their common behalf, may be left open in the present case. None of the partners demanded this and national civil law does not confer such powers on the tax authorities.

55Moreover, as the Court has already held, ‘the fact that some degree of cooperation occurs’ cannot suffice to call into question the independence of the person acting. ²⁶ In addition, the determinative role of a person in production ‘does not appear capable’ of calling into question the finding that the persons carry out their activities independently, in that each of them acts in its own name, on its own behalf and under its own responsibility. ²⁷ In that context, the Court has also regarded persons which conduct themselves independently in relation to their suppliers, public authorities and, to a certain extent, their customers, as independent undertakings which are taxable persons for VAT purposes, even though they acted to a large extent under a common trade mark through a limited company, the shares in which were held by them. ²⁸ That applies all the more in the present case, where, according to the information provided by the referring court, each of the partners carried out the transactions in its own name with a different category of customers.

56The relevance of acting outwardly is also illustrated by the rules in the VAT Directive on the commission payable on purchase or sale (Article 14(2)(c) and Article 28). In particular, Article 28 of the VAT Directive ²⁹ clearly illustrates that the deciding factor is that the person is acting in his, her or its own name, rather than that he, she or it is acting on his, her or its own behalf. That is because, even where a person acts in his, her or its own name but on a third party’s behalf, the person performing the activity supplies the goods or services and in so doing remains an independent taxable person.

3. Interim summary

57In the present case, therefore, it is not the society, but the respective partner which is the taxable person actually liable for the VAT. According to the request for a preliminary ruling, only the latter acted in its own name vis-à-vis its customers (that is to say, outwardly).

C. The administrative treatment of the transactions of a society

58Only to the extent that the referring court reaches the conclusion that it is the society that dealt with a third party in the present case is that society the taxable person. It would then still be necessary to determine whether EU law precludes the society’s tax liability from being allocated to the applicant (as one of the four partners). This concerns the legal concept of the ‘designated partner’ existing in Czech law until mid-2017.

59In principle, it is the taxable person himself or herself who is liable for VAT (Article 193 of the VAT Directive). However, the way in which it is to be treated in the context of the tax procedure is not explicitly regulated by the VAT Directive. However, the VAT Directive is based on the principle that every taxable person must be able to submit, for example, a recapitulative statement (Article 262 of the VAT Directive). The declaration of commencement, change and cessation of the activity is to be made by the taxable person (Article 213 of the VAT Directive), as is a VAT return (Article 250 of the VAT Directive). It is only in certain cases that Article 205 of the VAT Directive allows a person other than the person liable for payment of the tax to be held jointly and severally liable for payment of VAT. In that regard, much militates in favour of the view that the concept of ‘designated partner’ was not compatible with the VAT Directive, as the Commission also states. That was probably also the reason for its elimination.

60There is no need here to consider in greater detail whether, from an administrative point of view, with the agreement of two connected persons liable for payment of the tax (society and partners), the society may designate, for the purposes of tax administration, one of the partners as a ‘designated partner’ who fulfils the society’s tax obligations, provided that there are no changes in the tax revenue as a result. ³⁰ In the present case, it is not the person liable for payment of the tax (that is to say, the society) that appointed a partner as ‘administrative controller’ who performs the obligations, but apparently the tax authority that did so a posteriori. Similarly, the tax debts of the society and of the ‘designated partner’ do not appear to be treated separately, which could have an impact on tax revenues, as shown in the present case.

VI. Conclusion

Conclusion

61In conclusion, I therefore propose that the Court answer the questions referred for a preliminary ruling by the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic) as follows:

Article 9(1) and Article 193 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

must be interpreted as meaning that a taxable person is not required to have its own legal personality but must have its own legal capacity. The economic activity is carried out ‘independently’ where the taxable person is acting in his or her own name. This results from the actions and dealings with third parties (outwardly). It is irrelevant for the purposes of VAT legislation whether it infringes internal agreements in that regard (such as, for example, a partnership agreement).

¹ Original language: German.

² For example, the Gesellschaft bürgerlichen Rechts (civil law partnerships) (Paragraph 705 et seq. of the Bürgerliches Gesetzbuch (German Civil Code; ‘the BGB’)) is a comparable legal form existing in Germany.

³ OJ 2006 L 347, p. 1, in the version in force in 2017, the year at issue (as last amended by Council Directive [EU] 2016/856 of 25 May 2016 amending Directive 2006/112/EC on the common system of value added tax, as regards the duration of the obligation to respect a minimum standard rate [OJ 2016 L 142, p. 12]).

⁴ Judgments of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, end of paragraph 37), and of 26 October 2010, Schmelz (C‑97/09, EU:C:2010:632, paragraph 63).

⁵ See my Opinions in UP CAFFE (C‑171/23, EU:C:2024:417, point 53 et seq.), in Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų ministerijos and Others (Joint Activity Agreement) (C‑312/19, EU:C:2020:310, point 63 et seq.), and in Schmelz (C‑97/09, EU:C:2010:354, end of point 33).

⁶ As expressly stated in the judgment of 2 May 2019, Jarmuškienė (C‑265/18, EU:C:2019:348, paragraph 38).

⁷ See Article 25: Small undertakings of the Explanatory memorandum of Commission Proposal COM(73) 950 final of 20 June 1973, page 27.

⁸ See my Opinion in UP CAFFE (C‑171/23, EU:C:2024:417, point 54) and judgment of 4 October 2024, UP CAFFE (C‑171/23, EU:C:2024:840, paragraph 27).

⁹ See in particular, in that regard, judgment of 4 October 2024, UP CAFFE (C‑171/23, EU:C:2024:840, paragraph 23 et seq.), and of 22 November 2017, Cussens and Others (C‑251/16, EU:C:2017:881, paragraph 31 et seq.).

¹⁰ Judgment of 18 December 2014, Schoenimport Italmoda Mariano Previti and Others (C‑131/13, C‑163/13 and C‑164/13, EU:C:2014:2455, paragraphs 49 and 62).

¹¹ Order of 9 January 2023, A.T.S. 2003 (C‑289/22, EU:C:2023:26, paragraph 42).

¹² See judgments of 1 December 2022, Finanzamt T (Internal supplies within a VAT group) (C‑269/20, EU:C:2022:944, paragraph 43), and of 1 December 2022, Norddeutsche Gesellschaft für Diakonie (C‑141/20, EU:C:2022:943, paragraph 49): it is apparent from the Explanatory memorandum for the Commission Proposal (COM(73) 950 final) which resulted in the adoption of the Sixth Directive that the EU legislature, by adopting that provision, intended, either in the interests of administrative simplification or with a view to combating abuses such as the splitting up of one undertaking among several taxable persons so that each might benefit from a special scheme, to ensure that Member States would not be obliged to treat as taxable person those whose ‘independence’ is purely a legal technicality. The judgment of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 80) follows the same line of argument.

¹³ See, for example, judgments of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 26); of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 27); and of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 35).

¹⁴ Judgments of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 69); of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 39); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 28).

¹⁵ Judgments of 3 April 2025, Grzera (C‑213/24, EU:C:2025:238, paragraph 28); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34).

¹⁶ Judgments of 3 April 2025, Grzera (C‑213/24, EU:C:2025:238, paragraph 23); of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 41); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 28); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34).

¹⁷ Expressly: judgments of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 27); of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 28); and of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54).

¹⁸ The Court speaks of a form which, although without legal personality, was in fact able to act independently; see judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54).

¹⁹ Judgments of 27 March 2014, Le Rayon d’Or (C‑151/13, EU:C:2014:185, paragraph 29); of 3 May 2012, Lebara (C‑520/10, EU:C:2012:264, paragraph 27); and of 3 March 1994, Tolsma (C‑16/93, EU:C:1994:80, paragraph 14). The judgment of 29 October 2009, Commission v Finland (C‑246/08, EU:C:2009:671, paragraph 43), even speaks of an agreement between the parties on a price. Such an agreement can be concluded only with a person having legal capacity.

²⁰ See, for example, judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25); and my Opinion in Dong Yang Electronics (C‑547/18, EU:C:2019:976, point 41).

²¹ See, for example, judgments of 8 May 2019, A-PACK CZ (C‑127/18, EU:C:2019:377, paragraph 22); of 23 November 2017, Di Maura (C‑246/16, EU:C:2017:887, paragraph 23); of 21 February 2008, Netto Supermarkt (C‑271/06, EU:C:2008:105, paragraph 21); and of 20 October 1993, Balocchi (C‑10/92, EU:C:1993:846, paragraph 25). See also, in that regard, my Opinion in Di Maura (C‑246/16, EU:C:2017:440, point 21).

²² Judgments of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 45 et seq.), and of 21 April 2005, HE (C‑25/03, EU:C:2005:241, paragraph 54). The judgment regarding a budget-bound municipal facility goes in a similar direction; see judgment of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 36 et seq.).

²³ Judgments of 16 September 2020, Valstybinė mokesčių inspekcija (joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 40 and 41); of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 28); and of 29 September 2015, Gmina Wrocław (C‑276/14, EU:C:2015:635, paragraph 34).

²⁴ That was the express view taken in the judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint Activity Agreement) (C‑312/19, EU:C:2020:711, paragraph 40), confirmed by judgment of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 70).

²⁵ See, in that regard, recital 5 of the VAT Directive.

²⁶ Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 31); the Opinion of Advocate General Szpunar goes in this direction in Nigl (C‑340/15, EU:C:2016:505, point 21), according to which ‘the very fact that there is cooperation, even close cooperation’ does not indicate that a person is no longer an independent taxable person.

²⁷ Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 33).

²⁸ Judgment of 12 October 2016, Nigl and Others (C‑340/15, EU:C:2016:764, paragraph 34).

²⁹ Article 28 of the VAT Directive is worded as follows: ‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’

³⁰ In its judgments relating to the German tax group scheme, the Court rightly recognised that Member States have a certain margin of discretion in the administrative treatment of a ‘VAT group’, provided that it does not entail a risk of tax losses. See judgments of 1 December 2022, Finanzamt T (Internal supplies within a VAT group) (C‑269/20, EU:C:2022:944, paragraph 50), and of 1 December 2022, Norddeutsche Gesellschaft für Diakonie (C‑141/20, EU:C:2022:943, paragraph 57).