Levob Verzekeringen BV and OV Bank NV v Staatssecretaris van Financiën.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2005:649
• Date: 27 October 2005
• Celex Number: 62004CJ0041
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-41/04

Case C-41/04

Levob Verzekeringen BV and OV Bank NV

v

Staatssecretaris van Financiën

(Reference for a preliminary ruling from the Hoge Raad der Nederlanden)

(Sixth VAT Directive — Articles 2, 5, 6 and 9 — Transfer of software recorded on a carrier — Subsequent customisation of the software to the purchaser’s specific requirements — Single taxable supply — Supply of services — Place of supply)

Opinion of Advocate General Kokott delivered on 12 May 2005

Judgment of the Court (First Chamber), 27 October 2005

Summary of the Judgment

1. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Supply of services — Transactions comprising a number of elements — Transaction to be considered as a single supply — Criteria — Supply of standard software recorded on a carrier and subsequent customisation of that software to the consumer’s specific requirements

(Council Directive 77/388, Art. 2(1))

2. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Supply of services — Meaning — Supply of standard software recorded on a carrier and subsequent customisation of that software to the consumer’s specific requirements — Included — Conditions

(Council Directive 77/388, Art. 6(1))

3. Tax provisions — Harmonisation of laws — Turnover taxes — Common system of value added tax — Supply of services — Determination of the place of taxable supply — Services of advisers, engineers, consultants, lawyers, accountants and other similar services — Meaning — Customisation of computer software to the customer’s specific requirements — Included

(Council Directive 77/388, Art. 9(2)(e), third indent)

1. Article 2(1) of Sixth Council Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as meaning that where two or more elements or acts supplied by a taxable person to a customer, being a typical consumer, are so closely linked that they form objectively, from an economic point of view, a whole transaction, which it would be artificial to split, all those elements or acts constitute a single supply for purposes of the application of VAT. This is true of a transaction by which a taxable person supplies to a consumer standard software previously developed, put on the market and recorded on a carrier and subsequently customises that software to that purchaser’s specific requirements, even where separate prices are paid.

(see para. 30, operative part 1-2)

2. Article 6(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as meaning that a single supply such as the supply of standard software and its subsequent customisation to the specific requirements of the customer is to be classified as a ‘supply of services’ where it is apparent that the customisation is neither minor nor ancillary but, on the contrary, predominates; such is the case in particular where in the light of factors such as its extent, cost or duration the customisation is of decisive importance in enabling the purchaser to use the customised software.

(see paras 28-30, operative part 3)

3. Article 9(2)(e), third indent, of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, which determines the place of taxable supply for services of advisers, engineers, consultants, lawyers, accountants and other similar services, including data processing and data supply, must be interpreted as meaning that it applies to a single supply of services such as the supply of standard software and its subsequent customisation to the specific requirements of the customer performed for a taxable person established in the Community but not in the same country as the supplier.

That provision does not refer to professions, such as those of lawyers, consultants, accountants or engineers, but to the services supplied by those professionals and similar services. The Community legislature has used the professions mentioned in that provision as a means of defining the categories of services to which it refers. In that regard, computer science, including programming and the development of software, forms a significant part of the training given to future engineers and it may often constitute one of the various specialisations available to them during that training. A service such as the customisation of computer software to the specific requirements of a consumer is therefore likely to be carried out either by engineers or by other persons trained to carry out such tasks. It follows that such a service is covered either by the services carried out by engineers or by those which are similar to the activity of an engineer.

(see paras 37-41, operative part 4)

JUDGMENT OF THE COURT (First Chamber)

27 October 2005 (*)

(Sixth VAT Directive – Articles 2, 5, 6 and 9 – Transfer of software recorded on a carrier – Subsequent customisation of the software to the purchaser’s specific requirements – Single taxable supply – Supply of services – Place of supply)

In Case C‑41/04,

REFERENCE for a preliminary ruling under Article 234 EC from the Hoge Raad der Nederlanden (Netherlands), made by decision of 30 January 2004, received at the Court on 2 February 2004, in the proceedings

Levob Verzekeringen BV,

OV Bank NV

v

Staatssecretaris van Financiën,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, K. Schiemann (Rapporteur), N. Colneric, J.N. Cunha Rodrigues and E. Levits, Judges,

Advocate General: J. Kokott,

Registrar: K. Sztranc, Administrator,

having regard to the written procedure and further to the hearing on 24 February 2005,

after considering the observations submitted on behalf of:

– Levob Verzekeringen BV and OV Bank NV, by J. van Dongen, advocaat, G.C. Bulk, adviseur, and W. Nieuwenhuizen, belastingadviseur,

– the Netherlands Government, by H. Sevenster, J. van Bakel and M. de Grave, acting as Agents,

– the Commission of the European Communities, by L. Ström van Lier and A. Weimar, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 12 May 2005,

gives the following

Judgment

1 The reference for a preliminary ruling concerns the interpretation of Articles 2(1), 5(1), 6(1) and 9 of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes –...