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Flashback on ECJ Cases – C-615/16 (Kerr) – Usage rights for immovable property – Concept of “negotiation”

On November 21, 2017, the ECJ issued its decision in the case C-615/16 (Kerr).

Context: Reference for a preliminary ruling – Taxation – Value added tax (VAT) – Directive 2006/112 / EC – Article 15, paragraph 2, and Article 135, paragraph 1, sub f) – Right to use immovable property – Exemptions – Scope of application – Concept of “negotiation”

Article in the EU VAT Directive

Articles 15(2), 135(1)(f) of the EU VAT Directive 2006/112/EC

Article 15 (Taxable transaction)
2. Member States may regard the following as tangible property:
(a) certain interests in immovable property;
(b) rights in rem giving the holder thereof a right of use over immovable property;
(c) shares or interests equivalent to shares giving the holder thereof de jure or de facto rights of ownership or possession over immovable property or part thereof.

Article 135 (Exemption)
1. Member States shall exempt the following transactions:
(f) transactions, including negotiation but not management or safekeeping, in shares, interests in companies or associations, debentures and other securities, but excluding documents establishing title to goods, and the rights or securities referred to in Article 15(2);


  • Ms  Kerr has held since February 2010, a professional activity as a service provider for Leisure Dimensions Limited Sucursal em Portugal Soc. Gestão Financeira Central Oura Lda (hereinafter, respectively, “LDL” and “SGF”), two companies whose corporate purpose is the marketing of rights to use real estate.
  • In particular, it appears from the order for reference that the services provided by Mme  Kerr consisted of business development, promotion of services marketed by these companies and the negotiation, within the limits imposed on him, contracts relating thereto . As part of this activity, Ms  Kerr was initially placed under the exemption regime provided for in Article 9 of CIVA.
  • Following a check carried out by the Autoridade Tributária e Aduaneira (fiscal and customs authority, Portugal), on July 2, 2014, the latter issued a VAT payment advice, covering the fiscal years 2011 2014 on the ground that the operations in which Mme  Kerr was delivered as part of his business could benefit from this exemption and were therefore taxable.
  • The claim brought by Ms Kerr against the payment notice was rejected, she lodged an appeal before the Tribunal Administrativo e Fiscal de Loulé (Administrative and Tax Court of Loulé, Portugal).
  • That appeal was also dismissed by that court, Ms Kerr before the court, the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal), an appeal, arguing, first, that by altering retroactively its regime, the tax and customs authority had violated the principles of non-retroactivity and legal certainty. On the other hand, Ms  Kerr argued that its activity can be noted that the exemption referred to in Article 9, Paragraph 27 e) of the CIVA.
  • In that regard, the referring court states that that provision of national law transposes into domestic law Article 135 (1) (f) and Article 15 (2) of the VAT Directive.
  • The national court decided to dismiss the claims of Ms Kerr for a retroactive amendment of the tax system to which it was submitted. However, feeding doubts about the qualification of the activities Ms Kerr, it considers that an interpretation of the provisions of the VAT Directive is necessary so that it is able to determine whether the transactions at issue in the main proceedings must be exempt from paying VAT.


[Must] the provision in Articles 135(1)(f) and 15(2) of Council Directive 2006/112/EC … be interpreted as referring only to parties to contracts for the marketing of rights to use properties, or [may] it also be interpreted as referring equally to the activity carried on by the applicant, consisting in attracting clients and promoting services, so as to ensure that the business marketing those services completes the relevant sale, in accordance with instructions laid down in advance and limits on discounts and promotional gifts?

AG Opinion



Article 15 (2) and Article 135 (1) (f) of Council Directive 2006/112 / EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the concept of ‘negotiation’, within the meaning of the latter provision, is likely to relate to an activity, such as that developed by the applicant in the main proceedings, provided that that activity is that of an intermediary paid to provide a service to one of the parties to a contract relating to financial transactions relating to securities, this service consisting in taking the necessary steps for the seller and the buyer to sign this contract, without the intermediary himself signing said contract and, in any case, without his own interest in the content of this same contract.It is for the referring court to verify whether these conditions are met in the dispute before it.


Usage rights for immovable property – Concept of “negotiation”

The term ‘negotation’ may refer to an activity such as the acquisition of customers and the promotion of rights of use services for immovable property intended for sale, provided that it is the activity of an intermediary who is remunerated for a service for the benefit of one of the parties to an agreement concerning financial transactions in securities, the service of which consists in taking the necessary steps for the seller and the buyer to conclude this agreement, without the intermediary signing this agreement himself and in any case without having his own has an interest in the content of that agreement. It is for the referring court to determine whether those conditions are met in the case before it.






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