Court of Justice of the European Union

Judgment of 27 June 2013 (Case C-155/12)

«VAT – Directive 2006/112/EC – Articles 44 and 47 – Place where taxable transactions are deemed to be carried out – Place of supply for tax purposes – Concept of "supply of services connected with immovable property" – Complex cross-border service relating to the storage of goods »

The Court of Justice of the European Union ("CJEU") ruled in connection with a reference for a preliminary ruling related to the interpretation of the concept of provisions of services connected with real estate set forth in article 47 of the Council’s VAT Directive, of 28 November 2006, on the common system of value added tax, as amended by Council Directive 2008/8/EC, of 12 February 2008 ("VAT Directive").

The question raised by the referring court in this case was whether a complex storage services – which comprise admission of the goods to a warehouse, placing them on the appropriate storage shelves, storing the goods, packaging them, issuing them, unloading and loading them and, in the case of certain customers, repackaging, into individual sets, materials supplied in collective packaging – constituted a supply of services connected with immovable property within the meaning of article 47 of the VAT Directive for the purposes of determining the place where services are provided.

The court ruled that such a transaction is qualified as single transaction, the principal service of which comprises the storage of goods, concluding that only supplies of services which have a sufficiently direct connection with immovable property come under article 47 of the VAT Directive and emphasising that one of the essential characteristics of the concept of "immovable property" is that it is attached to the «territory of the Member State in which it is located ».

In this connection, the court concluded that article 47 of the VAT Directive should be interpreted as meaning that it only concerns a complex storage service, in cases in which the storage constitutes the principal service of a single transaction and only if the recipients of those services are given a right to use all or part of an expressly specific immovable property.

Court of Justice of the European Union

Judgment of 18 July 2013 (Case C-26/12)

«Value added tax – Sixth Directive 77/338/EEC – Articles 17 and 13(B)(d)(6) – Exemptions – Deduction of input tax – Pension fund – Concept of "management of special investment funds"»

The CJUE ruled, in connection with a reference for a preliminary ruling, on the right to VAT deduction paid by a taxpayer regarding services acquired in the context of management and operation activities of a pension fund set up in the form of a legally and fiscally separate entity in order to safeguard the pension rights of its employees and former employees.

In line with case-law on the right to VAT deduction, the court stated that such right depends upon a direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct, or upon the fact that the services in question are part of his general costs and are components of the price of the goods or services it supplies, the court sustained that the existence of such link is apparent from all the circumstances of the transactions in question. In this context, the court reiterates that the analysis of this link should be done on a case-by-case basis.

In view of the scope of right of VAT deduction set forth in article 167 of the VAT Directive, the court concluded that a taxpayer who has set up a pension fund in the form of a legally and fiscally separate entity, in order to safeguard the pension rights of its employees and former employees, is entitled to deduct the VAT it has paid on services relating to the management and operation of such fund, provided there is a direct and immediate link between a input transaction and the fund management.