Opinion of Advocate General Kokott delivered on 25 April 2024.

• Jurisdiction: European Union
• Date: 25 April 2024
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 25 April 2024 (1)

Case C‑741/22

Casino de Spa SA and Others

v

État belge (SPF Finances),

Interested parties:

État belge (SPF Justice),

La Chambre des Représentants

(Request for a preliminary ruling from the tribunal de première instance de Liège (Court of First Instance, Liège, Belgium))

(Reference for a preliminary ruling – Tax law – Value added tax – Directive 2006/112/EC – Article 135(1)(i) – Exemption of gambling – Direct effect of the exemption – Differentiation between online gambling and analogue gambling – Differentiation between various kinds of online gambling (lotteries and other forms of online gambling) – Inadmissibility of questions referred for a preliminary ruling – Temporary maintenance in force of national law without prior reference for a preliminary ruling – VAT exemption as aid)

I. Introduction

‘In gambling the many must lose in order that the few may win.’ (George Bernard Shaw, Anglo-Irish playwright and politician, 1856 to 1950).

1. Although these and other dangers of gambling are generally recognised, Article 135(1)(i) of Directive 2006/112/EC on the common system of value added tax (‘the VAT Directive’) (2) has always exempted betting, lotteries and other forms of gambling. At first sight, the European Union appears to seek to promote gambling in terms of VAT. However, that exemption only applies ‘subject to the conditions and limitations laid down by each Member State’.

2. Belgium has opted no longer to exempt online gambling (except online lotteries) from VAT since 1 July 2016. Other forms of gambling (including lotteries), however, remain exempt from VAT. Online gambling providers in Belgium consider this selective exemption in this case and that of Chaudfontaine Loisirs SA (C‑73/23) (3) to be an infringement of the principle of neutrality. Here, it is also argued that the exemption of other gambling providers constitutes an unlawful State aid. In the end, a VAT exemption for online gambling is to be derived directly from EU law. This can only be successful in so far as the VAT Directive has direct effect in that respect, that is to say if that exemption already derives from it.

3. Although the Court has dealt with the different taxation of various types of gambling in VAT law on several occasions in the past, (4) recent case-law gives cause to consider in depth the direct effect of Article 135(1)(i) of the VAT Directive in such a situation (selective exemption of individual types of gambling). At the same time, the Court has the opportunity to clarify whether and to what extent the principle of neutrality precludes a selective exemption of individual types of gambling.

II. Legal framework

A. European Union law

4. Article 107(1) of the Treaty on the Functioning of the European Union (‘TFEU’) contains a prohibition on aid:

‘1. Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

5. Article 135(1)(i) of the VAT Directive governs the exemption of gambling from tax and is worded as follows:

‘1. Member States shall exempt the following transactions:

…

(i) betting, lotteries and other forms of gambling, subject to the conditions and limitations laid down by each Member State.’

B. Belgian law

6. Article 8 of the loi spéciale sur la Cour constitutionnelle du 6 janvier 1989 (Special Law on the Constitutional Court of 6 January 1989) stipulates:

‘If the action is well founded, the Constitutional Court shall entirely or partially annul the statute, decree or rule referred to in Article 134 of the Constitution against which the action was instituted. …

Where the Court so deems necessary, it shall, by way of a general provision, specify which effects of the annulled provisions are to be considered permanent or provisionally maintained for the period determined by the Court.’

7. Article 9 of the special law provides:

Ԥ 1. Annulment judgments delivered by the Constitutional Court shall have the force of res judicata as from their publication in the Moniteur Belge.

§ 2. The judgments delivered by the Constitutional Court whereby actions for annulment are dismissed shall be binding on the courts with respect to the points of law settled by those judgments.’

8. Article 44(3)(13) of the code de la taxe sur la valeur ajoutée (Value Added Tax Code) (as in force from 1 July 2016 to 21 May 2018) states:

‘The following shall also be exempt from the tax: …

13.

(a) lotteries;

(b) other forms of gambling, with the exception of those provided electronically as referred to in Article 18(1)(2)(16); …’

III. Facts and preliminary ruling procedure

9. Twenty-seven companies governed by Belgian law, including Casino de Spa SA, which together constitute the ‘VAT unit’ GAMING ARDENT (‘the applicant’), and which are thus regarded as a single taxable person for VAT purposes, operate online games.

10. Originally, transactions relating to gambling were exempt from VAT in Belgium. Articles 29 to 34 of the Programme Law of 1 July 2016 annulled that exemption. As a result, those transactions became taxable, while ‘conventional’ types of gambling and all lotteries (online and analogue) remained exempt from tax.

11. However, the Cour constitutionnelle (Constitutional Court, Belgium) annulled the provisions in question of the Programme Law of 1 July 2016 by decision of 22 May 2018 on the grounds that it infringes the rules on the division of powers between the Federal State and the Regions (Article 177 of the Belgian Constitution). It stated that the taxes already paid for the period from 1 July 2016 to 21 May 2018 would nevertheless be maintained in view of the budgetary and administrative difficulties which would arise from their reimbursement.

12. The applicant nevertheless applied for reimbursement of an amount of EUR 15 581 402.06, which it had paid as VAT on online games carried out from 1 July 2016 to 21 May 2018, after deducting the corresponding input VAT.

13. In a report of 5 December 2019, the administration rejected that application on the ground that the conditions for reimbursement were not met. The applicant then brought an action before the referring court.

14. The applicant considers that maintaining the effects of the annulled law is contrary to the principle of VAT neutrality, in that other forms of gambling are exempt, as well as contrary to other rules of EU law, including the prohibition of State aid. In the alternative, it claims that the Belgian State is liable on account of a fault on the part of the Cour constitutionnelle (Constitutional Court) in that temporarily maintaining the effects of the annulled provisions infringes Article 1 of the First Additional Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms guaranteeing the protection of property. The defendant Belgian State, by contrast, considers that the claim is unfounded and that it cannot be ordered to refund the VAT.

15. The tribunal de première instance de Liège (Court of First Instance, Liège, Belgium) seised of the action stayed the proceedings and referred the following six questions to the Court of Justice for a preliminary ruling under Article 267 TFEU:

‘(1) Must Article 135(1)(i) of [the VAT Directive] be interpreted as precluding a Member State from using different treatment for online lotteries offered by Loterie Nationale [(the Belgian national lottery)], a public establishment, which are exempt from value added tax, and other online games of chance offered by private operators, which are subject to value added tax, assuming that they are similar supplies?

(2) In answering the previous question, in order to determine whether there are two similar categories which are in competition with each other and which require the same treatment for the purposes of value added tax, or whether there are separate categories which allow for different treatment, must the national court consider only whether or not the two forms of games are in competition with each other from the point of view of the average consumer, in the sense that services are similar where they have similar characteristics and meet the same needs from the point of view of consumers, the test being whether their use is comparable, and where the differences between them do not have a significant influence on the decision of the average consumer to use one or the other of those services (alternative criterion), or must it take into account other criteria such as the existence of a discretionary power on the part of the Member State to exempt certain categories of games from VAT and to subject others to it, the fact that lotteries belong to a distinct category of games, referred to in Article 135(1)(i) of [the VAT Directive], the different legal frameworks which apply to Loterie Nationale and to other games of chance, the different supervisory authorities or the societal and gambler protection objectives pursued by the legislation applicable to Loterie Nationale?

(3) Must the principle of sincere cooperation set out in Article 4(3) TEU, read in conjunction with Article 267 TFEU, the provisions of [the VAT Directive] and, where applicable, the principle of effectiveness, be interpreted as meaning that they allow the constitutional court of a Member State to maintain – on its own initiative and without a reference for a preliminary ruling under Article 267 TFEU – on the basis of a provision of national law – in this case Article 8 of the loi spéciale du 6 janvier 1989 sur la Cour constitutionnelle (Special Law of 6 January 1989 on the Constitutional Court) – the retrospective effect of national provisions on value added tax which were...