VATupdate

ECJ C-294/21 (Etat du Grand-duche de Luxembourg) – Questions – Place of supply of cruise activities on a section covered by the public international condominium status

Context: Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes


Article in the EU VAT Directive

Article 2(1) and Article 9(2) , point b) of the Sixth Directive (77/388/EEC)


Facts

Navitours operates tourist cruise activities that, according to the AED (Luxembourg service of registered property, domains and VAT), did not fall within the scope of VAT. Navitours operates on the River Moselle, on the section covered by the public international condominium status and on which the Luxembourg and German States jointly exercise their sovereignty. The reason for not falling within the scope of the activities had to do with the river’s condominium status. Therefore, for many years the AED had not requested payment of the VAT on the tickets sold for passenger transport. The Navitours acquisition in 2004 of a new pleasure craft was subject to Luxembourg VAT by the AED. In the context of the legal proceedings following the decision of the director of the AED rejecting Navitours’ objection, the Cour d’appel held that (i) the acquisition of the vessel as an intra-Community supply was subject to VAT, and ii) that the VAT paid by Navitours was deductible as input tax. The Cour d’appel deduced from this that the director of the AED had wrongly confirmed the VAT assessments for the years 2004 and 2005 and had denied Navitours the right to deduct input tax.

Consideration:

For the purpose of assessing the plea relating to the application of the Sixth Directive to the territory of the Moselle under the common sovereignty of Luxembourg and Germany, which plea – having regard to the agreement concluded on 19 December 1984 between Luxembourg and Treaty concluded in Germany concerning the delimitation of the common border between the two states – also raises a question about the applicability of VAT in the European area, a question should first be submitted to the Court for a preliminary ruling.


Questions

Are/is Article 2(1) of [the Sixth Directive (77/388/EEC)] of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis, which provides that a value added tax shall be subject to:

1. the supplies of goods and services effected within the territory of the country by a taxable person acting as such for consideration’

and/or Article 9(2) , point b),of [Directive (77/388/EEC)] of 17 May 1977 on the harmonization of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis,

which provides that ‚the place of transport services, the place [ is] applicable, in proportion to the distances covered, where the carriage is carried out, and one and/or the other Article entails the levying of VAT in Luxembourg on passenger transport services provided by a supplier established in Luxembourg,

when these services are provided within a condominium,as this condominium is defined in the Treaty between the Grand Duchy of Luxembourg and the Federal Republic of Germany on the delimitation of the common border between the two States and in the Exchange of Letters signed in Luxembourg on 19 December 1984, as a common territory under joint sovereignty of the Grand Duchy of Luxembourg and the Federal Republic of Germany,

and in respect of which there is no agreement between the two States with regard to the collection of VAT on transport services as provided for in Article 5(1)of the Convention of 19 December 1984 between the Grand Duchy of Luxembourg and the Federal Republic of Germany on the delimitation of the common border between the two States, which provides that ‚the Contracting States shall determine the matters concerning the law applicable to the joint sovereignty common territory by means of an additional agreement’?


AG Opinion


Decision


Personal comments/VATupdate 


Source


 

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