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ECJ C-4/18 and C-5/18 (Winterhoff/Eisenbeis) – Judgment – VAT exemption for public postal services for formal service of documents

On 16 October 2019 the European Court of Justice gave its judgment in  joined cases C-4/18 and C-5/18 (Michael Winterhoff -Jochen Eisenbeis).

The disputes in the main proceedings and the questions referred for a preliminary ruling

Case C‑4/18

16 Mr Winterhoff is the liquidator of DIREKTexpress Holding, against which insolvency proceedings were opened by judgment of the Amtsgericht Ulm (District Court of Ulm, Germany) of 6 July 2011, which also appointed Mr Winterhoff to that position. That company is the ultimate parent company of a group that provided postal services through subsidiaries located throughout Germany. In 2008 and 2009, the group’s business consisted mainly of carrying out commissions for the formal service of documents, pursuant to the provisions of German public law, which were treated as transactions exempt from VAT.

17 Following a tax audit covering the period from August 2008 to May 2009, the Ulm Tax Office took the view that such transactions for the formal service of documents should be subject to VAT.

18 DIREKTexpress Holding initially lodged a complaint against that decision and secondly, after rejection of that complaint, an action before the Finanzgericht Baden-Württemberg (Finance Court, Baden-Württemberg, Germany). During the procedure, the Ulm Tax Office, the defendant before that court, issued turnover tax notices for the years 2008 and 2009.

19 Also in the course of that procedure, insolvency proceedings were opened against DIREKTexpress Holding and Mr Winterhoff was appointed as its liquidator. On that basis, he took over the on-going procedure.

20 The Finanzgericht Baden-Württemberg (Finance Court, Baden-Württemberg) dismissed the action brought before it by DIREKTexpress Holding on the ground that the formal service of documents could not qualify for the exemption requested. In particular, that court held that, first, the conditions laid down in Article 4(11b) of the UStG were not satisfied, since only transactions performed by Deutsche Post in direct connection with the postal service were exempt from VAT and secondly, Article 132(1)(a) of Directive 2006/112 could not be directly relied on since transactions for the formal service of documents do not fall within the scope of the universal service within the meaning of that provision.

21 Mr Winterhoff brought an appeal on a point of law against that decision before the referring court, the Bundesfinanzhof (Federal Finance Court, Germany).

22 The referring court raises the question, in the first place, of whether an undertaking whose business consists essentially in the formal service of court or administrative authority documents, may be considered to be a universal service provider within the meaning of Article 2(13) of Directive 97/67. In particular, that court raises the issue of whether it is possible to place these activities on the same footing as the specific case of postal items or postal packages provided for in Article 3(4) of Directive 97/67 or on the same footing as a registered item, also referred to in that provision.

23 In the second place, the referring court has doubts whether a company such as DIREKTexpress Holding can be considered to be providing services effected by the ‘public postal services’ within the meaning of Article 132(1)(a) of Directive 2006/112, such that the service of formally serving documents provided by it should have been exempt from VAT in accordance with that provision. In its view, the fact that, inter alia, such formal service of documents contributes to the proper administration of justice and, on that basis, is in the public interest, favours that interpretation. Conversely, it continues that since an individual cannot request formal service of a document, so a transaction cannot, in its view, be regarded as part of a service available to ‘all users’, within the meaning of Article 3(1) of Directive 97/67.

24 In those circumstances, the Bundesfinanzhof (Federal Finance Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘(1) Is an undertaking which effects the formal service of documents pursuant to provisions of public law a ‘universal service provider’, within the meaning of Article 2(13) of Directive 97/67 […] providing a universal postal service in whole or in part, and is such service exempt from tax under Article 132(1)(a) of Directive [2006/112]?’

Case C‑5/18

25 Mr Eisenbeis is the liquidator of JUREX, against which insolvency proceedings were opened by decision of 1 July 2011, which also appointed Mr Eisenbeis to that position. That company carried out, inter alia, commissions for the formal service of documents in the territory of Germany.

26 During 2010, JUREX requested the Federal Tax Office to issue a VAT exemption certificate in relation to the service of formally serving documents. That company made a commitment to that authority to offer such formal service of documents throughout Germany, in accordance with the procedural rules and applicable laws, in accordance with the licences granted for that purpose by the Bundesnetzagentur (Federal Network Agency, Germany).

27 By decision of 4 August 2010, the Federal Tax Office refused that request on the ground that the service covered by the request did not fall within the scope of the universal postal service.

28 Following an action by Mr Eisenbeis, the Finanzgericht Köln (Finance Court, Cologne, Germany) confirmed the refusal to exempt the services at issue from VAT on the same ground as that stated by the Federal Tax Office.

29 Mr Eisenbeis lodged an appeal on a point of law against that decision before the referring court, the Bundesfinanzhof (Federal Finance Court).

30 On the same grounds as those stated in Case C‑4/18, the Bundesfinanzhof (Federal Finance Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘(1) Is the formal service of documents pursuant to provisions of public law [rules of court procedure and laws governing service in administrative procedures — Paragraph 33(1) of the Law on postal services] a universal postal service under Article 3(4) of Directive 97/67/…?

(2) If Question 1 is to be answered in the affirmative:

Is an undertaking which effects the formal service of documents pursuant to provisions of public law a ‘universal service provider’, within the meaning of Article 2(13) of Directive 97/67/…, providing a universal postal service in whole or in part, and is such service exempt from tax under Article 132(1)(a) of Directive [2006/112]?’

31 By decision of the President of the Court of Justice of 1 February 2018, Cases C‑4/18 and C‑5/18 were joined for the purposes of the written and oral procedure and the judgment.

Judgment

The Court rules as follows:

Providers of services consisting in the service of items of correspondence, who, in their capacity as holders of a national licence permitting them to supply that service are required to effect, in accordance with provisions of national law, the formal service of court or administrative authority documents, must be regarded as ‘universal service providers’, in accordance with those provisions, so that those services must be exempt from value added tax as services effected by the ‘public postal services’ under Article 132 (1)(a) of the EU VAT Directive.

Source: curia.europa.eu