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ECJ C-218/21 (Autoridade Tributaria e Aduaneira) – Questions – Reduced rate for the repair and maintenance of elevators


Article in the EU VAT Directive

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (more specifically, point 2 of Annex IV to that directive, headed ‘List of the services referred to in Article 106’).


Facts

  • DSR is a company engaged in the manufacture of elevators, goods elevators and conveyor belts and also provides repair and maintenance services related to elevators. In 2011, it was subjected to a tax audit twice.
  • After the tax audit, an audit report was issued, in which the tax authorities concluded that DSR wrongfully applied the reduced VAT rate to the labor costs of the renovation and repair services.
  • Following the notification of the VAT assessments, DSR filed an appeal with the Administrative Court. That appeal was granted because labor services for the repair and maintenance of elevators are subject to a VAT rate of 5% pursuant to paragraph 2.27 of Schedule I to the VAT Code. It was confirmed that “elevators are an integral part of buildings”, whereby “this reduced rate is not excluded for repairs and maintenance of elevators, provided that they are carried out under a contract for work, as provided for in the relevant regulation, and that rate is applied only to the labor costs.” The tax authorities appealed this decision to the referring court.

Question

By the first preliminary question, the referring court wishes to know whether the national provision set out in paragraph 2.27 must be interpreted, in the light of Annex IV to the VAT Directive, as covering the aforementioned services or as not covering them. The second question is asked in order to ascertain whether, since in civil law elevators are considered to be common parts of a building, that qualification can be simply extrapolated to the tax sphere, or whether a restrictive interpretation should be adopted for tax purposes. Both questions serve the same purpose, namely to learn from the Court which of the conflicting positions – the restrictive interpretation of the tax authorities or the broader interpretation of the defendant company – should be adopted in the light of Union law, and in particular Annex IV to the VAT Directive, with regard to the applicability of the reduced rate to the services in question.

I. Is it compatible with European Union law, and in particular with Annex IV to the [Sixth] VAT Directive, for paragraph 2.27 of Schedule I to the VAT Code to be applied in such a way as to cover the repair and maintenance of elevators by the company to which the [facts outlined] relate, so that the reduced VAT rate applies to those services?

II. Is it compatible with [Union] law, and in particular with Annex IV to the [Sixth] VAT Directive, for that provision of the VAT Code to be applied in such a way that it also takes into account other provisions of domestic law, namely Articles 1207, 204(1)(e), and paragraph 3, and Article 1421(2)(b)] of the Civil Code (provisions relating to the contract for work, immovable property, and the circumstance that elevators are presumed to be common areas of jointly owned buildings)?

Source: minbuza.nl


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