Volker Ludwig v Finanzamt Luckenwalde.

• Jurisdiction: European Union
• Celex Number: 62005CJ0453
• ECLI: ECLI:EU:C:2007:369
• Date: 21 June 2007
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-453/05

Case C-453/05

Volker Ludwig

v

Finanzamt Luckenwalde

(Reference for a preliminary ruling from the Finanzgericht des Landes Brandenburg)

(Sixth Directive – VAT – Concept of transactions consisting in ‘the negotiation of credit’)

Judgment of the Court (First Chamber), 21 June 2007

Summary of the Judgment

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive

(Council Directive 77/388, Art. 13B(d)(1))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive

(Council Directive 77/388, Art. 13B(d)(1))

1. The fact that a taxable person analyses the financial situation of clients canvassed by him with a view to obtaining credit for them does not preclude recognition of the service supplied as being a negotiation of credit which is exempt under Article 13B(d)(1) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes if the negotiation of credit offered by that taxable person falls to be considered as the principal service to which the provision of financial advice is ancillary, in such a way that the latter shares the same tax treatment as the former. It is for the national court to determine whether that is the case in the proceedings before it.

(see para. 20, operative part 1)

2. The fact that a taxable person has no contractual link with any of the parties to a credit agreement to the conclusion of which he has contributed and that he does not establish direct contact with one of those parties does not preclude that taxable person from providing a service of negotiation of credit which is exempt under Article 13B(d)(1) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.

The transactions exempted under Article 13B(d)(1) of the Sixth Directive are defined in terms of the nature of the services provided and not in terms of the person supplying or receiving the service. That provision, in fact, makes no reference to the latter. The same observation may be made as regards the nature of the relationship between the negotiator and the parties to the contract, since there is no reference to that subject in the wording of Article 13B(d)(1) of the Sixth Directive.

Moreover, the wording of Article 13B(d)(1) of the Sixth Directive does not, in principle, preclude the activity of negotiation from being broken down into separate services which may then fall under the concept of ‘negotiation of credit’ for the purposes of that provision and benefit from the exemption for which it provides. In those circumstances, it follows from the principle of fiscal neutrality that operators must be able to choose the form of organisation which, from the strictly commercial point of view, best suits them, without running the risk of having their operations excluded from the exemption provided for in Article 13B(d)(1) of the Sixth Directive.

(see paras 25-26, 34-35, 40, operative part 2)

JUDGMENT OF THE COURT (First Chamber)

21 June 2007(*)

(Sixth Directive – VAT – Concept of transactions consisting in ‘the negotiation of credit’)

In Case C-453/05,

REFERENCE for a preliminary ruling under Article 234 EC from the Finanzgericht des Landes Brandenburg (Germany), made by decision of 23 November 2005, received at the Court on 20 December 2005, in the proceedings

Volker Ludwig

v

Finanzamt Luckenwalde,

THE COURT (First Chamber),

composed of P. Jann, President of the Chamber, A. Tizzano, A. Borg Barthet, M. Ilešič and E. Levits (Rapporteur), Judges,

Advocate General: P. Mengozzi,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing of 8 March 2007,

after considering the observations submitted on behalf of:

– Mr Ludwig, by K. Landry, Rechtsanwalt,

– the German Government, by C. Schulze-Bahr, acting as Agent,

– the Greek Government, by M. Apessos and Z. Chatzipavlou, acting as Agents,

– the French Government, by G. de Bergues and J.-C. Gracia, acting as Agents,

– the Commission of the European Communities, by D. Triantafyllou and W. Mölls, acting as Agents,

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

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 13B(d)(1) 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: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’), and in particular of the concept of ‘negotiation of credit’ to which it refers.

2 The reference was submitted in the context of proceedings brought by Mr Ludwig, financial adviser, against the Finanzamt Luckenwalde (Tax Office, Luckenwalde) in relation to the latter’s refusal to exempt from turnover tax a net commission in the amount of EUR 267 received by Mr Ludwig during the first quarter of 2005.

Legal framework

Community legislation

3 Under Article 2(1) of the Sixth Directive, the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such is to be subject to value added tax (‘VAT’).

4 Article 13, entitled ‘Exemptions within the territory of the country’ provides:

‘…

B. Other exemptions

Without prejudice to other Community provisions, Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible evasion, avoidance or abuse:

…

(d) the following transactions:

1. the granting and the negotiation of credit and the management of credit by the person granting it;

…’

National legislation

5 The relevant provisions of the Law on Turnover Tax (Umsatzsteuergesetz, BGBl. 1979 I, p. 1953), in the version applicable to the main proceedings, read as follows:

‘Paragraph 1 – Taxable transactions

(1) The following transactions shall be subject to turnover tax:

1. Supplies of goods and services effected for consideration within the territory of the country by a trader in the course of his business.

…

Paragraph 4 – Exemptions in respect of supplies...