Commissioners of Customs & Excise v Mirror Group plc.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• Writing for the Court: Colneric
• ECLI: ECLI:EU:C:2001:524
• Docket Number: C-409/98
• Date: 09 October 2001
• Procedure Type: Reference for a preliminary ruling

Avis juridique important

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61998J0409

Judgment of the Court (Sixth Chamber) of 9 October 2001. - Commissioners of Customs & Excise v Mirror Group plc. - Reference for a preliminary ruling: High Court of Justice (England & Wales), Queen's Bench Division (Divisional Court) - United Kingdom. - Sixth VAT Directive - Exemption for the leasing or letting of immovable property - Meaning - Undertaking to become a tenant. - Case C-409/98.

European Court reports 2001 Page I-07175

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

1. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Exemptions provided for by the Sixth Directive - Exemption for the letting of immovable property - Meaning - Payment of a sum of money by the landlord to the future tenant - Excluded

(Council Directive 77/388, Art. 13B(b))

2. Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Exemptions provided for by the Sixth Directive - Exemption for the letting of immovable property - Meaning - Option agreement in relation to leases of immovable property in return for a sum of money paid by the landlord - Excluded

(Council Directive 77/388, Art. 13B(b))

Summary

1. The letting of immovable property for the purposes of Article 13B(b) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes essentially involves the landlord of property assigning to the tenant, in return for rent and for an agreed period, the right to occupy his property and to exclude other persons from it. It is thus the landlord who makes a taxable supply of services and the tenant who, in return for the supply, pays consideration. Therefore, a person who does not initially have any interest in the immovable property and who enters into an agreement for lease of that immovable property with a landlord and/or accepts the grant of a lease of the property in return for a sum of money paid by the landlord does not make a supply of services falling within Article 13B(b) cited above.

( see paras 31-32, 36 and operative part 1 )

2. A person who does not initially have any interest in the immovable property and who enters into an option agreement in relation to leases of that immovable property in return for a sum of money paid by the landlord, on terms that the money will remain in a special account as security for its obligations under the option agreement, and who subsequently exercises the options under the option agreement and accepts the grant of leases of the immovable property in return for the release of the money in its special account, at no time makes a supply of services falling within Article 13B(b) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.

( see para. 39 and operative part 2 )

Parties

In Case C-409/98,

REFERENCE to the Court under Article 177 of the EC Treaty (now Article 234 EC) by the High Court of Justice of England and Wales, Queen's Bench Division (Divisional Court), for a preliminary ruling in the proceedings pending before that court between

Commissioners of Customs & Excise

and

Mirror Group plc,

on the interpretation of Article 13B(b) of the Sixth Council Directive of 17 May 1977 (77/388/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1),

THE COURT (Sixth Chamber),

composed of: F. Macken, President of the Chamber, N. Colneric (Rapporteur), C. Gulmann, J.-P. Puissochet and R. Schintgen, Judges,

Advocate General: A. Tizzano,

Registrar: D. Louterman-Hubeau, Head of Division,

after considering the written observations submitted on behalf of:

- Mirror Group plc, by D. Milne QC and G. Sinfield, Solicitor,

- the United Kingdom Government, by M. Ewing, acting as Agent, N. Pleming QC and P. Whipple, Barrister,

- the German Government, by W.-D. Plessing and C.-D. Quassowski, acting as Agents,

- the Commission of the European Communities, by E. Traversa and F. Riddy, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Mirror Group plc, represented by D. Milne and G. Sinfield, the United Kingdom Government, represented by G. Amodeo, acting as Agent, N. Pleming QC and P. Whipple, the German Government, represented by W.-D. Plessing, and the Commission, represented by R. Lyal, acting as Agent, at the hearing on 16 November 2000,

after hearing the Opinion of the Advocate General at the sitting on 23 January 2001,

gives the following

Judgment

Grounds

1 By order of 15 October 1998, received at the Court on 17 November 1998, the High Court of Justice of England and Wales, Queen's Bench Division (Divisional Court), referred to the Court for a preliminary ruling under Article 177 of the EC Treaty (now Article 234 EC) two questions on the interpretation of Article 13B(b) of the Sixth Council Directive of 17 May 1977 (77/388/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; the Sixth Directive).

2 Those questions were raised in proceedings between Mirror Group plc (Mirror Group) and the Commissioners of Customs & Excise (the Commissioners), who are responsible for the collection of value added tax (VAT) in the United Kingdom, concerning the liability to VAT of an undertaking given by Mirror Group agreeing in...