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Flashback on ECJ Cases – C-166/05 (Heger) – The transfer of a fishing right in the form of a fishing license is a service relating to immovable property

Watch-out: This case is about the place of supply of services. The articles in the EU VAT Directive have changed in 2010!!!

On Sept 7, 2006, the ECJ issued its decision in the case C-166/05 (Heger).

Context: Sixth VAT Directive – Place of supply for tax purposes – Article 9 – Supply of services connected with immovable property – Transmission of the fishing rights over a particular part of a stretch of water


Article in the EU VAT Directive

Article 9 of Sixth Council Directive 77/388/EEC.

Article 9(1) of the directive establishes the following general rule:

  • The place where a service is supplied shall be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is supplied or, in the absence of such a place of business or fixed establishment, the place where he has his permanent address or usually resides.

Article 9(2) of the Sixth Directive sets out a number of exceptions. Thus, Article 9(2)(a) states:

  • The place of the supply of services connected with immovable property, including the services of estate agents and experts, and of services for preparing and coordinating construction works, such as the services of architects and of firms providing on-site supervision, shall be the place where the property is situated.

Facts

  •  Heger is a company established in Germany, which has no business premises in Austria. In 1997 and 1998, Heger bought fishing quotas for the Gmundner Traun, a river in Upper Austria, from a company established in Austria, Flyfishing Adventure GmbH (‘Flyfishing’). Those permits authorised their holders to fish on certain stretches of that river at certain times of year. Heger sold on those permits to a large number of customers residing in different Member States.
  • In addition to the sale price of the permits in question, Flyfishing invoiced Heger Austrian VAT at a rate of 20%, totalling ATS 252 000 (that is, about EUR 18 300).
  • In December 1999, Heger applied to the competent Austrian authority for refund of the VAT paid in relation to the acquisition of fishing permits in 1997 and 1998, relying on the provisions transposing the Eighth Directive into Austrian law.
  • It appears from the order for reference that that application was rejected on the ground that the onward sale of the fishing permits by Heger to its customers constituted a supply of services connected with immovable property situated in Austria, so that a refund of the input VAT paid could not be given.

Questions

Does the grant of the right to fish by means of a transfer of fishing permits for valuable consideration constitute a ‘supply of services connected with immovable property’ within the meaning of Article 9(2)(a) of Sixth Council 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 of assessment?


AG Opinion

The transmission of the right to fish by means of a transfer of fishing permits for valuable consideration does not constitute a supply of services connected with immovable property for the purposes of Article 9(2)(a) of 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.


Decision

The transmission of the right to fish by means of a transfer of fishing permits for valuable consideration constitutes a supply of services connected with immovable property within the meaning of Article 9(2)(a) of 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 for assessment.


Summary

The transfer of a fishing right in the form of a transfer for consideration of a fishing license is a service relating to immovable property within the meaning of Article 9(2)(a) of the Sixth Directive.


Source:


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