Opinion of Advocate General Kokott delivered on 25 April 2024.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2024:361
• Date: 25 April 2024
• Celex Number: 62023CC0073
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

KOKOTT

delivered on 25 April 2024 (1)

Case C‑73/23

Chaudfontaine Loisirs SA

v

État belge, represented by the Ministre des Finances,

Interested party:

État belge, represented by the Ministre de la Justice

(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)

I. Introduction

‘By gaming we lose both our time and treasure – two things most precious [in] life …’ (Owen Feltham, English writer, 1602-1668).

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, however, remain exempt from VAT. Online gambling providers in Belgium consider this selective exemption to be an infringement of the principle of neutrality. In the similar case of Casino de Spa and Others (C‑741/22), (3) they also consider the exemption of other gambling providers to be 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 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

5. Originally, transactions relating to non-lottery gambling were also 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.

6. However, the Cour constitutionnelle (Constitutional Court, Belgium) annulled the provisions in question of the Programme Law of 1 July 2016 with effect from 21 May 2018 on account of the infringement of national rules on competences. 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.

III. Facts and preliminary ruling procedure

7. Chaudfontaine Loisirs SA (‘the applicant’) operates an ‘online casino’. It requests reimbursement of a principal amount of EUR 640 478.82 which it paid in VAT on online gambling and betting occurring between 1 July 2016 and 22 May 2018.

8. By decision of 1 December 2020, the administration rejected that request on the ground that the conditions for reimbursement were not fulfilled. The applicant then brought the matter before the referring court.

9. The applicant maintains, first, that the VAT at issue was levied in breach of the principle of fiscal neutrality governing the VAT Directive. It complains, next, that the effects of the annulled law were maintained for the period in question. The defendant Belgian State, on the other hand, recalls the discretionary power of Member States to exempt certain categories of games from and to subject others to VAT. Furthermore, the provisions annulled by the Cour constitutionnelle (Constitutional Court), which were ordered to be maintained in force for a limited period, do not constitute a defective transposition of the VAT Directive.

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

‘(1) Do Article 135(1)(i) of [the VAT Directive] and the principle of fiscal neutrality permit a Member State to exclude from the benefit of the exemption contained in that provision only gambling which is provided electronically while gambling which is not provided electronically remains exempt from VAT?

(2) Do Article 135(1)(i) of [the VAT Directive] and the principle of fiscal neutrality permit a Member State to exclude from the benefit of the exemption contained in that provision only gambling which is provided electronically (to the exclusion of lotteries, which remain exempt from VAT whether or not they are provided electronically)?

(3) Does the third paragraph of Article 267 of the Treaty on the Functioning of the European Union permit a higher court to decide to maintain the effects of a provision of national law which it annuls because of an infringement of national law without ruling on the infringement of EU law which was also raised before it, and, therefore, without referring for a preliminary ruling the question of the compatibility of that provision of national law with EU law or asking the Court about the circumstances in which it could decide to maintain the effects of that provision in spite of its incompatibility with EU law?

(4) If the answer to one of the previous questions is in the negative, could the constitutional court maintain the past effects of the provisions which it annulled because of their incompatibility with national rules on the division of powers when those provisions were also incompatible with [the VAT Directive], in order to prevent budgetary and administrative difficulties from arising from reimbursement of taxes already paid?

(5) If the answer to the previous question is in the negative, can the taxable person be reimbursed the VAT which it has paid on the actual gross margin on the gaming and betting which it operates on the basis of provisions incompatible with [the VAT Directive] and the principle of fiscal neutrality?’

11. The applicant, the Kingdom of Belgium, Portugal, the Czech Republic and the European Commission submitted written observations in the proceedings before the Court. In accordance with Article 76(2) of the Rules of Procedure of the Court of Justice, the Court did not consider it necessary to hold a hearing.

IV. Legal assessment

12. The five questions can essentially be broken down into two sets.

13. Since the applicant in the main proceedings is challenging the levying of VAT on its services under national law, Questions 1, 2 and 5 relate to whether the applicant’s services are exempt from VAT under Article 135(1)(i) of the VAT Directive and the applicant is to be reimbursed the tax paid in breach of EU law despite the maintenance in force of national law to the contrary. This requires that an exemption for online gambling arises directly from the VAT Directive on which the applicant can rely (B).

14. Questions 3 and 4, on the other hand, relate to whether the Constitutional Court in Belgium was able to order the maintenance in force of national law without a prior reference for a preliminary ruling, which is why the tax arose under national law in the first place. This raises the question as to the admissibility of those two questions (A).

A. Admissibility of Questions 3 and 4

15. Questions 3 and 4 are admissible in preliminary ruling proceedings only if the answer to them is necessary and relevant in order to give judgment in the main proceedings.

16. In principle, it is solely for the national court before which the dispute has been brought to determine both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Questions concerning the interpretation of a rule of EU law enjoy a presumption of relevance. (5) The Court may refuse to rule on a question only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it. (6)

17. Even on the basis of the abovementioned presumption, Questions 3 and 4 are inadmissible in this case. The main proceedings concern the reimbursement of a tax which may have been paid in breach of EU law (or more precisely, in breach of the directive). The national statute was, although it had to be annulled for reasons of national law, also declared by the competent national court to be maintained in force for a certain period of time on reasons of national law (the order that it be temporarily maintained in force).

18. National law thus...