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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Ludwig (Taxation) [2007] EUECJ C-453/05 (21 June 2007) URL: https://www.bailii.org/eu/cases/EUECJ/2007/C45305.html Cite as: [2007] EUECJ C-453/05, [2007] ECR I-5083, [2007] EUECJ C-453/5 |
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(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
Finanzamt Luckenwalde,
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
Legal framework
Community legislation
'...
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
'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 of goods and services
The following transactions covered by Paragraph 1(1)(1) shall be exempt:
...
8. (a) the granting and negotiation of credit ...'
The main proceedings and the questions referred for a preliminary ruling
'(1) Is there negotiation within the meaning of Article 13B(d)(1) of the Sixth Directive when a taxable person in some circumstances represented by a subagent obtains credit for clients canvassed by it from various lenders, with which it has previously agreed general conditions applicable to its clients and from which it receives a commission for the negotiation of a product, even if, in the process, it analyses the financial situation of the clients and their personal and financial needs, or is that service a dependent service ancillary to the principal service, which is a financial service not covered by Article 13B(1)(d) of the Sixth Directive?
(2) Is it a precondition of the exemption in respect of negotiation of credit under Article 13B(d)(1) of the Sixth Directive that:
(a) there is a direct contractual relationship between the negotiator, on the one hand, and the borrower and/or the lender on the other hand, and,
(b) the negotiator must establish contact not only with the borrower, but equally with the lender, and himself agree the details of the contract with the latter,
or does the tax exemption also cover commission payments received by a taxable person from a main agent, for which he works as a subagent and in whose name he acts vis-à -vis its clients, in return for those clients entering into credit agreements with providers indicated by the main agent, but without the subagent establishing contact with the lender?'
The questions referred for a preliminary ruling
Question 1
Question 2
Preliminary observations
On the necessity of a contractual link between the negotiator and one of the parties to the contract
On the necessity of direct contact between the negotiator and both parties to the contract
Costs
On those grounds, the Court (First Chamber) hereby rules:
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 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, if, in the light of the foregoing interpretative criteria, 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.
2. The fact that the 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 Sixth Directive 77/388.
[Signatures]
* Language of the case: German.