On 19 December 2019, the European Court of Justice gave its judgment in case C-715/18 (Segler-Vereinigung Cuxhaven eV). The case deals with the question if the reduced VAT rate applies to the letting of boat moorings in a marina.
Facts (simplified):
Segler-Vereinigung Cuxhaven (a sailors association) is a registered non-profit-making association whose object is to promote the sport of sailing and motorised water sports. It maintains approximately 300 boat moorings, roughly half of which were allocated during 2010 to 2012 (‘the years at issue’) to members of the association. Those members are obliged to tolerate the use of their moorings by guests in their absence. The remaining moorings may be used by guests without restriction.
In the years at issue, Segler-Vereinigung Cuxhaven applied the reduced rate of VAT to payments received for making the moorings available to guests.
The German Tax Office did not agree with this, and raised an assessment, applying the standard rate of VAT to those payments.
The Niedersächsisches Finanzgericht (Finance Court of Lower Saxony, Germany) dismissed the action brought by the appellant in the main proceedings against that decision. According to that court, the short-term provision of boat moorings cannot be classified under the ‘short-term letting of camping areas’, within the meaning of Paragraph 12(2)(11) of the UStG. Such provision falls within the concept of the ‘letting of premises and sites for the parking of vehicles’, referred to in Paragraph 4(12), second sentence, second alternative, of the UStG which is founded on Article 135(2)(b) of the VAT Directive. It stated that the general principle of equality laid down in Article 3(1) of the Basic Law for the Federal Republic of Germany does not preclude that interpretation.
Segler-Vereinigung Cuxhaven appealed, arguing that taxation of the letting of boat moorings at the standard rate of VAT infringes the general principle of equality since the provision of places for camper vans and caravans is subject to the reduced rate of VAT. An interpretation in conformity with the principle of equality would, in its submission, result in all forms of short-term accommodation, whatever they may be, being uniformly subject to the reduced rate of VAT. The supplies of services carried out by the appellant in the main proceedings are concentrated on the provision of boat moorings for the purpose of accommodating yachtsmen. Thus, the mooring charge (Hafengeld) is payable only in the case of overnight stays.
The Bundesfinanzhof (Federal Finance Court) decided to refer the following question to the Court for a preliminary ruling:
‘Does the tax rate reduction for the letting of places on camping or caravan sites under Article 98(2) of [the VAT Directive], in conjunction with point 12 of Annex III to that directive, also cover the letting of boat moorings?’
Considerations:
Article 98 of the VAT Directive provides for the possibility of applying reduced rates of VAT. To that end, Annex III to the directive sets out an exhaustive list of the supplies of goods and services to which the reduced rates may be applied.
In particular, point 12 of Annex III to the VAT Directive allows the Member States to apply a reduced rate of VAT to ‘accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites’.
Point 12 of Annex III to the VAT Directive specifies the various supplies of ‘accommodation’ that may be subject to a reduced rate of VAT.
The concept of ‘accommodation’, within the meaning of point 12 of Annex III to the VAT Directive, should be interpreted strictly and the scope of that provision should not be extended to services which are neither included in its wording nor intrinsically linked to that concept.
The letting of boat moorings, first, is not included in the wording of point 12 of Annex III to the VAT Directive and, second, is not intrinsically linked to the concept of ‘accommodation’, but has the primary purpose of enabling boats to be immobile and secure when moored.
Thus, it is evident that point 12 of Annex III to the VAT Directive is not to be read as permitting a Member State to apply a reduced rate of VAT to the letting of boat moorings.
Judgment
The ECJ rules as follows:
Article 98 (2) in conjunction with Annex III No. 12 of the VAT Directive is to be interpreted as meaning that the reduced VAT rate applicable to the rental of campsites and places is intended for the parking of caravans, is not applicable to the rental of boat berths.
Source: Curia
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