On May 5, 2022, the ECJ issued its decision in the case C-218/21 (Autoridade Tributaria e Aduaneira).
Context: Reference for a preliminary ruling — Taxation — Value added tax (VAT) — Directive 2006/112/EC — Rates — Temporary provisions for certain labour-intensive services — Annex IV, point 2 — Renovation and repair of dwellings companies – Application of a reduced rate of VAT to repair and maintenance services for elevators in apartment buildings
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
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
AG Opinion
None
Decision
Point 2 of Annex IV to 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 ‘renovation and repairing of private dwellings’, within the meaning of that provision, covers repair and renovation services for lifts in residential buildings, excluding maintenance services for such lifts.
Summary: The term “renovation and repair of private dwellings” means repair and renovation services of residential elevators, but does not include maintenance services of such elevators.
Source
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