C32102
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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Harbs (Taxation) [2004] EUECJ C-321/02 (15 July 2004) URL: https://www.bailii.org/eu/cases/EUECJ/2004/C32102.html Cite as: [2007] BTC 5114, [2006] STC 340, [2004] STI 1656, [2004] ECR I-7101, [2004] EUECJ C-321/02, [2004] EUECJ C-321/2, [2007] BVC 83 |
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JUDGMENT OF THE COURT (First Chamber)
15 July 2004 (1)
(Sixth VAT Directive - Article 25 - Common flat-rate scheme for farmers - Leasing of part of a farm)
In Case C-321/02,REFERENCE to the Court under Article 234 EC by the Bundesfinanzhof (Germany) for a preliminary ruling in the proceedings pending before that court between Finanzamt Rendsburgand
Detlev Harbs, on the interpretation of Article 25 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 COURT (First Chamber),
after considering the written observations submitted on behalf of:
- Mr Harbs, represented by G. Flock and U. Fischer, Rechtsanwälte, - the German Government, represented by W.-D. Plessing and M. Lumma, acting as Agents, - the Commission of the European Communities, represented by E. Traversa and K. Gross, acting as Agents, assisted by A. Böhlke, Rechtsanwalt,having regard to the Report for the Hearing,
after hearing the oral observations of Mr Harbs and the Commission at the hearing on 12 February 2004,
after hearing the Opinion of the Advocate General at the sitting on 11 March 2004,
gives the following
-Without prejudice to other Community provisions, Member States shall exempt the following -:(b) the leasing or letting of immovable property --.
-1. Where the application to farmers of the normal value added tax scheme, or the simplified scheme provided for in Article 24, would give rise to difficulties, Member States may apply to farmers a flat-rate scheme tending to offset the value added tax charged on purchases of goods and services made by the flat-rate farmers pursuant to this Article. 2. For the purposes of this Article, the following definitions shall apply: - -farmer-: a taxable person who carries on his activity in one of the undertakings defined below, - -agricultural, forestry or fisheries undertakings-: an undertaking considered to be such by each Member State within the framework of the production activities listed in Annex A, - -flat-rate farmer-: a farmer subject to the flat-rate scheme provided for in paragraphs 3 et seq., - -agricultural products-: goods produced by an agricultural, forestry or fisheries undertaking in each Member State as a result of the activities listed in Annex A, - -agricultural service-: any service as set out in Annex B supplied by a farmer using his labour force and/or by means of the equipment normally available on the agricultural, forestry or fisheries undertaking operated by him, - -value added tax charge on inputs-: the amount of the total value added tax attaching to the goods and services purchased by all agricultural, forestry and fisheries undertakings of each Member State subject to the flat-rate scheme where such tax would be deductible under Article 17 by a farmer subject to the normal value added tax scheme, - -flat-rate compensation percentages-: the percentages fixed by Member States in accordance with paragraph 3 and applied by them in the cases specified in paragraph 5 to enable flat-rate farmers to offset at a fixed rate the value added tax charge on inputs, - -flat-rate compensation-: the amount arrived at by applying the flat-rate compensation percentage provided for in paragraph 3 to the turnover of the flat-rate farmer in the cases referred to in paragraph 5. 3. Member States shall fix the flat-rate compensation percentages, where necessary, and shall notify the Commission before applying them. Such percentages shall be based on macro-economic statistics for flat-rate farmers alone for the preceding three years. They may not be used to obtain for flat-rate farmers refunds greater than the value added tax charges on inputs. Member States shall have the option of reducing such percentages to a nil rate. The percentage may be rounded up or down to the nearest half point. Member States may fix varying flat-rate compensation percentages for forestry, for the different sub-divisions of agriculture and for fisheries. -5. The flat-rate percentages provided for in paragraph 3 shall be applied to the price, exclusive of tax, of the agricultural products and agricultural services supplied by the flat-rate farmers to taxable persons other than a flat-rate farmer. This compensation shall exclude all other forms of deduction. 6. Member States may provide for the flat-rate compensation to be paid:(a) either by the taxable person to whom the goods or services are supplied. In this case, the taxable person to whom the goods or services are supplied shall be authorised, following the procedure laid down by the Member States, to deduct from the value added tax for which he is liable, the amount of the flat-rate compensation he has paid to the flat-rate farmers; (b) or by the public authorities. -8. As regards all supplies of agricultural products and agricultural services other than those covered by paragraph 5, the flat-rate compensation is deemed to be paid by the purchaser or customer. -10. Every flat-rate farmer may opt, subject to the rules and conditions to be laid down by each Member State, for application of the normal value added tax scheme or, as the case may be, the simplified scheme provided for in Article 24(1).--
-List of agricultural production activities:I. Crop production1. General agriculture, including viticulture;-II. Stock farming together with cultivation1. General stock farming;-III. ForestryIV. Fisheries-V. Where a farmer processes, using means normally employed in an agricultural, forestry or fisheries undertaking, products deriving essentially from his agricultural production, such processing shall also be regarded as agricultural production.-
-List of agricultural servicesSupplies of agricultural services which normally play a part in agricultural production shall be considered the supply of agricultural services, and include the following in particular:- field work, reaping and mowing, threshing, baling, collecting, harvesting, sowing and planting - packing and preparation for market, for example drying, cleaning, grinding, disinfecting and ensilage of agricultural products - storage of agricultural products - stock minding, rearing and fattening - hiring out, for agricultural purposes, of equipment normally used in agricultural, forestry or fisheries undertakings - technical assistance - destruction of weeds and pests, dusting and spraying of crops and land- operation of irrigation and drainage equipment - lopping, tree felling and other forestry services.- National law
-Where the owner of a farm:- gives up part of his farm (the entire dairy cow operation) and leases the assets necessary for that operation to another farmer;- and continues to farm on a not insignificant scale after granting the lease,may he treat the turnover from the lease - like the rest of his turnover - under the flat-rate scheme for farmers (Article 25 of Directive 77/388/EEC), or is the turnover from the lease taxable under the general rules?-
Observations submitted to the Court
Reply of the Court
On those grounds,
THE COURT (First Chamber),
in answer to the question referred to it by the Bundesfinanzhof by order of 4 July 2002, hereby rules:Article 25 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 is to be interpreted as meaning that a farmer who has leased and/or let on a long-term basis some of the material assets of his farming business but continues to farm with the rest of his assets and who, in respect of the continued farming activity, is subject to the common flat-rate scheme provided for in Article 25 may not treat the income from such a lease and/or letting as being taxable under that scheme. The turnover from that arrangement must be taxed under the normal scheme or, where appropriate, the simplified scheme of value added tax.
Jann |
Rosas |
von Bahr |
Silva de Lapuerta |
Lenaerts |
|
R. Grass |
P. Jann |
Registrar |
President of the First Chamber |
1 - Language of the case: German.