Property Development Company NV v Belgische Staat.

• Jurisdiction: European Union
• Celex Number: 62014CJ0016
• ECLI: ECLI:EU:C:2015:265
• Docket Number: C-16/14
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 23 April 2015

JUDGMENT OF THE COURT (Third Chamber)

23 April 2015 ( *1 )

‛Reference for a preliminary ruling — Taxation — Sixth VAT Directive — Article 11A — Application of goods treated as a supply for consideration — Application of a building for an activity exempt from VAT — Taxable amount for that application — Interim interest paid during the construction of the building’

In Case C‑16/14,

REQUEST for a preliminary ruling Article 267 TFEU from the Hof van beroep te Gent (Belgium), made by decision of 7 January 2014, received at the Court on 16 January 2014, in the proceedings

Property Development Company NV

v

Belgische Staat,

THE COURT (Third Chamber),

composed of M. Ilešič (Rapporteur), President of the Chamber, A. Ó Caoimh, C. Toader, E. Jarašiūnas and C.G. Fernlund, Judges,

Advocate General: M. Szpunar,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

— Property Development Company NV, by M. Vanden Broeck and S. Geluyckens, advocaten,

— the Belgian Government, by M. Jacobs and J.-C. Halleux, acting as Agents,

— the Greek Government, by K. Paraskevopoulou and M. Skorila, acting as Agents,

— the Finnish Government, by S. Hartikainen, acting as Agent,

— the European Commission, by L. Lozano Palacios and G. Wils, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of Article 11A of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax (OJ 1977 L 145, p. 1 and corrigendum OJ 1977 L 149, p. 26; ‘the Sixth Directive’).

2 The request has been made in proceedings between Property Development Company NV (‘Prodeco’) and the Belgische Staat concerning liability for value added tax (‘VAT’) arising from the application of a building for rental activity.

Legal context

EU law

3 The Sixth Directive was repealed and replaced, with effect from 1 January 2007, by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1). However, given the date at which the material facts arose, the dispute in the main proceedings remains governed by the Sixth Directive.

4 Article 2 of the Sixth Directive stated: ‘The following shall be subject to [VAT]: 1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such; 2. the importation of goods.’

5 Article 4 of that directive provided: ‘1. “Taxable person” shall mean any person who independently carries out in any place any economic activity specified in paragraph 2 … 2. The economic activities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services … The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity. …’

6 Title V of the Sixth Directive was entitled ‘Taxable transactions’ and comprised Articles 5 to 7 thereof, respectively entitled ‘Supply of goods’, ‘Supply of services’ and ‘Imports’.

7 Article 5 of the directive was worded as follows: ‘1. “Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner. … 6. The application by a taxable person of goods forming part of his business assets for his private use or that of his staff, or the disposal thereof free of charge or more generally their application for purposes other than those of his business, where the [VAT] on the goods in question or the component parts thereof was wholly or partly deductible, shall be treated as supplies made for consideration. However, applications for the giving of samples or the making of gifts of small value for the purposes of the taxable person’s business shall not be so treated. 7. Member States may treat as supplies made for consideration: (a) the application by a taxable person for the purposes of his business of goods produced, constructed, extracted, processed, purchased or imported in the course of such business, where the VAT on such goods, had they been acquired from another taxable person, would not be wholly deductible; (b) the application of goods by a taxable person for the purposes of a non-taxable area of activity, where the VAT on such goods became wholly or partly deductible upon their acquisition or upon their application in accordance with point (a); …’

8 Article 11 of that directive provided: ‘A. Within the territory of the country 1. The taxable amount shall be: (a) in respect of supplies of goods and services other than those referred to in (b), (c) and (d) below, everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies … (b) in respect of supplies referred to in Article 5(6) and (7), the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined as the time of supply; … 2. The taxable amount shall include: (a) taxes, duties, levies and charges, excluding the [VAT] itself; (b) incidental expenses such as commission, packing, transport and insurance costs charged by the supplier to the purchaser or customer. Expenses covered by a separate agreement may be considered to be incidental expenses by the Member States. …’

9 Articles 18, 73 and 74 of Directive 2006/112 correspond respectively to Articles 5(7), 11A(1)(a) and 11A(1)(b) of the Sixth Directive.

Belgian law

10 Under Article 12(1) of the Law establishing the Code on Value Added Tax of 3 July 1969 (Belgisch Staatsblad of 17 July 1969, p. 7046) in the version applicable to the main proceedings (‘the VAT Code’). ‘The following shall be treated as supplies effected for consideration: … 3. the use by the taxpayer as capital goods of goods which it has constructed, had constructed by someone else on its behalf, manufactured, acquired or imported, otherwise than as capital goods or for which, with the application of VAT, real rights have been established in its favour or have been assigned or retroceded to it, where the VAT on the asset or the component parts thereof is wholly or partially deductible; …’

11 By Article 12(1)(3), the Belgian legislature intended to make use of the possibility offered by Article 5(7)(a) and (b) of the Sixth Directive.

12 Article 26 of the VAT Code provides: ‘In respect of supplies of goods and services, tax shall be calculated on the basis of everything which constitutes the consideration which has been or is to be obtained by the supplier of the goods or services from the person for whom that supply of goods or services is made or from a third party, including subsidies directly linked to the price of such supplies. The taxable amount shall include the amounts which the supplier of the goods or services charges to the person for whom that supply is made as commission, insurance or transport costs, irrespective of whether they are covered by a separate debit note or agreement. The taxable amount shall also include taxes, duties, levies and charges.’

13 Article 33(1) of that code states: ‘The taxable amount shall be: 1. with regard to the supplies referred to in … Article 12, the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of those supplies, taking into account where appropriate Article 26(2) and (3) … …’

14 Article 22a, first paragraph, of the Royal Decree of 8 October 1976 on annual accounts for undertakings (Belgisch Staatsblad of 19 October 1976, p. 13460) and Article 38 of the Royal Decree of 30 January 2001 implementing the Companies Code (Belgisch Staatsblad of 6 February 2001, p. 3008) states: ‘Interest on capital borrowed to finance intangible or tangible...