VATupdate

Flashback on ECJ Cases – C-473/08 (Eulitz) – Activities other than teaching can also constitute exempt tuition

On January 28, 2010, the ECJ issued its decision in the case C-473/08 (Eulitz).

Context: Sixth VAT Directive – Article 13A(1)(j) – Exemption – Tuition given privately by teachers and covering school or university education – Services provided by an independent teacher in the context of continuing professional training courses organised by a separate entity


Article in the EU VAT Directive

Article 13A(1)(j) of the Sixth VAT Directive (Article 132(1)(j) of the EU VAT Directive 2006/112/EC

Article 132
1. Member States shall exempt the following transactions:
(j) tuition given privately by teachers and covering school or university education;


Facts

  • Eulitz GbR, a civil law partnership, is an engineering consultancy in Dresden (Germany).
  • Mr Eulitz, one of the partners of Eulitz GbR, is a graduate engineer in preventive fire protection. During the period at issue in the main proceedings, covering 2001 to 2005, he gave lectures at the Europäisches Institut für postgraduale Bildung an der Technischen Universität Dresden [European Institute for Postgraduate Education at the Technical University of Dresden] (EIPOS e.V.) (‘EIPOS’), an association governed by private law, and he conducted examinations as a member of examination boards.
  • In addition to his teaching and examination work, Mr Eulitz had overall technical and organisational responsibility for some of the courses at that institute. He therefore had to consult with the other lecturers as regards the content and dates of their courses and was the central point of contact for the participants on matters relating to those courses in general.
  • Mr Eulitz worked on various training courses, all relating to fire prevention. The admission requirement for participants on all those courses was at least a university or higher technical college qualification as an architect or an engineer or proof of two years’ professional practice in the field of fire protection planning, or, where appropriate, in the construction sector. Successful completion of the authorised expert course led, upon application, to the appointment of the graduate as an authorised expert in preventive fire protection by the Industrie- und Handelskammer (Chamber of Industry and Commerce).
  • The Finanzamt subjected the income of Eulitz GbR derived from that activity of Mr Eulitz to VAT, taking the view that it was not exempt under Paragraph 4(21) or (22) of the UStG.
  • Following dismissal of the notice of objection lodged by it against that decision, Eulitz GbR instituted the main proceedings, seeking exemption of the income concerned, which was received, it submits, in return for services provided by Mr Eulitz as a teacher, privately on his own account and at his own risk.
  • The Finanzamt considers, by contrast, that the exemption under Article 13A(1)(i) or (j) of the Sixth Directive does not apply. First, Eulitz GbR is not a body governed by public law responsible for children’s or young people’s education, school or university education, vocational training or retraining, nor is it another organisation defined by the Member State concerned as having similar objects. Second, the services in question cannot be regarded as school or university education given ‘privately’ by a teacher. In particular, Mr Eulitz acted as a teacher in the context of training courses offered by EIPOS and, therefore, under the responsibility and on behalf of that institute.
  • The Sächsisches Finanzgericht (Finance Court, Saxony) states in particular that Eulitz GbR is an independent contractor within the meaning of Paragraph 2(1) of the UStG, but that, under German law, it is not entitled to VAT exemption with regard to the services in question. In particular, it is not Eulitz GbR, but EIPOS, which provided those services to participants in the training courses. In addition, neither EIPOS nor Eulitz GbR have the certification provided for under Paragraph 4(21)(b)(bb) of the UStG, indicating that they regularly prepare students for a profession or examination held by a legal person governed by public law. According to the referring court, that last factor precludes the application in the case in the main proceedings of the exemption under Article 13A(1)(i) of the Sixth Directive, because Eulitz GbR is not an ‘organisation defined’ by the Member State concerned within the meaning of that provision. With regard to subparagraph (j) of the same paragraph, the national court expresses doubts with regard to the status of Mr Eulitz as a teacher acting ‘privately’.

Questions

1.      Is teaching and examination work which a graduate engineer performs at an education institute established as a private-law association for participants in advanced training courses who already have at least a university or higher technical college qualification as an architect or an engineer or who have an equivalent education, where the course is concluded with an examination, “school or university education” within the meaning of Article 13A(1)(j) of Directive 77/388 … ?

2.      (a)   Is a person who otherwise satisfies the requirements to be a teacher giving tuition “privately” within the meaning of [that] provision … excluded from that category of persons if:

  • he receives payment (in full or in part) for his teaching classes even if no participants have enrolled for the teaching class in question, but he has already done preparatory work for it,
  • he is responsible, repeatedly and continuously over a considerable period of time, for organising the relevant teaching and examination work, or
  • in addition to his direct tuition work, he has taken on a professionally and/or organisationally prominent position compared with the other lecturers on the course in question?

(b)      Is such exclusion to be taken to exist if just one of [those criteria] is satisfied, or only if two or all three criteria [when present] have been met?


AG Opinion

None


Decision

1. Article 13A(1)(j) 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 must be interpreted as meaning that teaching work which a graduate engineer performs at an education institute established as a private-law association for participants in advanced training courses – culminating in an examination – who already have at least a university or higher technical college qualification as an architect or an engineer or who have an equivalent education can constitute ‘tuition … covering school or university education’ within the meaning of that provision. Activities other than teaching in the strict sense can also constitute such tuition, provided that they are carried out, essentially, in the context of the transfer of knowledge and skills between a teacher and pupils or students and cover school or university education. It is for the referring court, if need be, to ascertain whether all the activities at issue in the main proceedings are ‘tuition’ covering ‘school or university education’ within the meaning of that provision.

2. Article 13A(1)(j) of that directive must be interpreted as meaning that, in circumstances such as those at issue in the main proceedings, a person such as Mr Eulitz, a partner in the claimant in the main proceedings, who performs teaching work for training courses offered by another body, cannot be regarded as having given tuition ‘privately’ within the meaning of that provision.


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