Elida Gibbs Ltd v Commissioners of Customs and Excise.

• Jurisdiction: European Union
• Celex Number: 61994CJ0317
• ECLI: ECLI:EU:C:1996:400
• Date: 24 October 1996
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-317/94

Avis juridique important

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61994J0317

Judgment of the Court (Sixth Chamber) of 24 October 1996. - Elida Gibbs Ltd v Commissioners of Customs and Excise. - Reference for a preliminary ruling: Value Added Tax Tribunal, London - United Kingdom. - Value added tax - Sixth Directive - Money-off and cash-back coupons - Taxable amount. - Case C-317/94.

European Court reports 1996 Page I-05339

Summary
Parties
Grounds
Decision on costs
Operative part

Keywords

Tax provisions ° Harmonization of laws ° Turnover taxes ° Common system of value added tax ° Taxable amount ° Sales promotion scheme involving, after purchase by the final consumer, reimbursement from the manufacturer on presentation of a voucher issued by the manufacturer ° Taxable basis constituted by the sale price charged by the manufacturer less the amount reimbursed

(Council Directive 77/388, Art. 11A(1)(a) and 11C(1))

Summary

Where

° (a) a manufacturer issues a money-off coupon, which is redeemable at the amount stated on the coupon by or at the expense of the manufacturer in favour of the retailer, (b) the coupon, which is distributed to a potential customer in the course of a sales promotion campaign, may be accepted by the retailer in payment for a specified item of goods, (c) the manufacturer has sold the specified item at the "original supplier' s price" direct to the retailer and (d) the retailer takes the coupon from the customer on sale of the item, presents it to the manufacturer and is paid the stated amount,

or

° (a) the manufacturer, in the course of a promotion scheme, sells items of goods at the "manufacturer' s price" direct to a retailer, (b) a cash-back coupon for an amount stated on the packaging of those items entitles the customer, if he proves purchase of one of those items and satisfies other conditions printed on the coupon, to present the coupon to the manufacturer in return for payment of the stated amount, and (c) a customer purchases such an item from a retailer, presents the coupon to the manufacturer and is paid the stated amount,

Article 11(A)(1)(a) and Article 11(C)(1) of the Sixth Directive are to be interpreted as meaning that the taxable amount serving as a basis for determination of the value added tax payable by the manufacturer is equal to the selling price charged by the manufacturer, less the amount indicated on the coupon and refunded. The same applies if the original supply is made by the manufacturer to a wholesaler rather than directly to a retailer.

That interpretation necessarily follows from the principle that the taxable amount serving as a basis for the VAT to be collected by the tax authorities cannot exceed the consideration actually paid by the final consumer which is the basis for calculating the VAT ultimately borne by him and from the principle of neutrality of the tax whereby within each country similar goods should bear the same tax burden whatever the length of the production and distribution chain.

The VAT system is not disturbed as a result of that interpretation since there is no need to readjust the taxable amount for the intermediate transactions. That amount remains unchanged since, for those transactions, observance of the principle of neutrality is ensured by application of the conditions for deduction set out in the directive, which enable the intermediate links in the distribution chain, such as wholesalers and retailers, to pay to the tax authorities only the part of the VAT representing the difference between the price paid by each to his supplier and the price at which he supplied the goods to his purchaser.

Parties

In Case C-317/94,

REFERENCE to the Court under Article 177 of the EC Treaty by the VAT and Duties Tribunal, London, for a preliminary ruling in the proceedings pending before that court between

Elida Gibbs Ltd

and

Commissioners of Customs and Excise

on the interpretation of Article 11 of the Sixth Directive, Council Directive 77/388/EEC of 17 May 1977 on the harmonization 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: G.F. Mancini, President of the Chamber, C.N. Kakouris (Rapporteur) and G. Hirsch, Judges,

Advocate General: N. Fennelly,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

° Elida Gibbs Ltd, by David Milne QC, instructed by Coopers & Lybrand, Chartered Accountants,

° the United Kingdom Government, by Stephen Braviner, of the Treasury Solicitor' s Department, acting as Agent, and Kenneth Parker QC,

° the German Government, by Ernst Roeder, Ministerialrat in the Federal Ministry of the Economy, and Gereon Thiele, Assessor in the same ministry, acting as Agents,

° the French Government, by Edwige Belliard, Deputy Director, Directorate for Legal Affairs, Ministry of Foreign Affairs, and Jean-Louis Falconi, Secretary for Foreign Affairs in the same Directorate, acting as Agents,

° the Italian Government, by Umberto Leanza, Head of the Contentious Diplomatic Affairs Department of the Ministry of Foreign Affairs, acting as Agent, assisted by Maurizio Fiorilli, Avvocato dello Stato,

° the Commission of the European Communities, by Peter Oliver and Enrico Traversa, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Elida Gibbs Ltd, represented by David Milne QC and John Arnold, Tax Adviser, the United Kingdom Government, represented by Kenneth Parker QC, the Greek Government, represented by Fokion Georgakopoulos, Legal Adviser in the State Legal Service, and Anna Rokofyllou, Adviser to the Deputy Minister for Foreign Affairs, acting as Agents, the French Government, represented by Gautier Mignot, Secretary for Foreign Affairs in the Directorate for Legal Affairs, Ministry of Foreign Affairs, acting as Agent, and the Commission, represented by Peter Oliver...