VATupdate

Share this post on

Flashback on ECJ Cases – C-13/06 (Commission vs. Greece) – Exemption for services consisting of assistance in the event of a car breakdown

On December 7, 2006, the ECJ issued its decision in the case C-13/06 (Commission vs. Greece).

Context: Failure of a Member State to fulfil obligations – Sixth VAT Directive – Exemptions – Article 13B(a) – Insurance transactions – Body providing road assistance services


Article in the EU VAT Directive

Article 13B(a) of the Sixth VAT Directive (Article 135(1)(a) of the EU VAT Directive 2006/112/EC)

Without prejudice to other Community provisions, Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of the exemptions and of preventing any possible evasion, avoidance or abuse:

(a)      insurance and reinsurance transactions, including related services performed by insurance brokers and insurance agents


Facts

Having noted that, pursuant to the said Article 15(42), car accident or breakdown services supplied by ELPA (Automobile & Touring Club of Greece) to its members in return for the payment of a fixed annual subscription gave rise to the levy of VAT on that subscription, and considering that such transactions should benefit from the exemption provided for under Article 13B(a) of the Sixth Directive, the Commission sent a letter of formal notice, on 7 July 2004, to the Hellenic Republic.


Questions

The Commission claims that the Court should:
declare that, by imposing VAT on services which consist in the provision of a vehicle-breakdown service, the Hellenic Republic has failed to fulfil its obligations under Article 13B(a) of the Sixth Directive; 1
order the Hellenic Republic to pay the costs.
Pleas in law and main arguments
The Commission submits that although the Greek body ELPA (Elliniki Leskhi Aftokinitou kai Periigiseon; Automobile & Touring Club of Greece) which provides roadside assistance is not subject to the insurance directives, it engages in insurance activity for the purposes of Article 13B(a) of the Sixth VAT Directive.
The Commission relies on the other language versions of the directive and also:
–    the principle of neutrality of VAT, which requires the same activity to be taxed in the same way, irrespective of the person carrying it out;
–    the fact that in case-law the term ‘insurance’ (Case C-349/96 CPP) is construed as covering vehicle-breakdown services;
–    the independence of the tax provisions vis-à-vis other Community provisions (insurance directives);
–    the fact that roadside assistance by insurers is subject to the Insurance Directive 73/239 (as amended by Directive 84/641).

AG Opinion

None


Decision

1. Declares that, by levying value added tax on services consisting in road assistance in the event of a breakdown, the Hellenic Republic has failed to fulfil its obligations under Article 13B(a) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment;

2. Orders the Hellenic Republic to pay the costs.


Summary

Acts relating to insurance – Organization providing assistance in the event of a car breakdown

By charging VAT on services consisting of assistance in the event of a breakdown, Greece has failed to fulfill its obligations under Article 13B(a) of the Sixth Directive.


Source:


Similar ECJ cases


 

Newsletters

Sponsors:

VAT news
VAT news

Advertisements:

  • VATupdate.com
  • vatcomsult