On 7 March 2019, the Advocate General of the European Court of Justice gave its opinion in case C-145/18 (Regards Photographiques SARL). The case concerns the question if photographs, which are signed and limited in number of copies, can be regarded works of art, to which the reduced VAT rate can be applied.
Unofficial translation
Facts (simplified):
Regards Photographiques SARL is engaged in the manufacture and sale of photographs.
The French tax authorities do not agree with Regards Photographiques SARL applying the reduced VAT rate to the delivery of certain photographs, namely portraits and wedding photographs. The tax authorities were of the opinion that these photographs had to be subject to the standard VAT rate.
Regards Photographiques argued that the photographs qualified as ‘works of art’, as they were signed and numbered, and with a circulation of up to maximum 30 copies.
The French court decided to ask questions to the European Court of Justice:
(1) Must Articles 103 and 311 of [Directive 2006/112] and point 7 of Part A of Annex IX to that directive be interpreted as requiring only that photographs have been taken by their maker, by him or under his supervision. printed, signed and numbered, with a circulation of up to 30 copies for all formats and media together, in order to qualify for the reduced VAT rate?
(2) If the first question is answered in the affirmative, is it nevertheless permissible for Member States to exclude photographs which are not of an artistic nature from the benefit of the reduced VAT rate?
(3) If the first question is answered in the negative, what other conditions must photographs satisfy in order to qualify for the reduced VAT rate? Should they display an artistic character in particular?
(4) Must those conditions be interpreted uniformly within the European Union or do they refer to the law of each Member State and in particular to intellectual property rights? ‘
Considerations:
According to the A-G, the stumbling block in the present case seems to be formed by the term “artist”.
The A-G considers that “photography”, is a difficult to define phenomenon. Because a photo is “a reflection of reality” and is apparently simple and practically everyone’s can make (nowadays almost every European citizen has a camera, even if only in the phone), the artistic character of the photography can be questioned.
The debate about whether and, if so, under what conditions, a photo art is art, is legitimate between philosophers and art theorists. On the other hand, the taxation of commercial transactions must be based on clear, objective criteria arising from the legislation, even where those transactions relate to goods classified as ‘works of art’. This discussion can not be resolved by the tax authorities, nor by the national courts or even by the Court.
Opinion:
The Advocate General is of the opinion that:
- The only condition for the application of the reduced VAT rate on photographs is that they have been taken by the maker, printed by him or under his supervision, signed and numbered, with a maximum circulation of 30 copies, for all formats and carriers together.
- Member States have the right, subject to compliance with legal certainty and fiscal neutrality, to apply the reduced rate only to certain categories listed in Annex IX, Part A, of objects listed in this Directive which are defined in an objective and unambiguous manner. On the other hand, Member States do not have the power to impose additional requirements in respect of those objects based on vague criteria or criteria which leave a wide margin of discretion to the authorities responsible for applying the tax provisions, such as the artistic nature of an object.
In short: the A-G more or less says that as long as the requirements listed in the VAT Directive are met, a photograph can be regarded a work of art. A Member State cannot apply additional requirements.
