Judgment_paragraph 1. · Staatssecretaris van Financiën v Association coopérative "Coöperatieve Aardappelenbewaarplaats GA" (154/80)

1.The Commission recalls that the main object of the First Directive on harmonization of turnover taxes was to convert those taxes into a Community system of value-added taxation whose structure and detailed rules for application are given by the Second Directive and it then examines at length Article 8 of that directive in conjunction with Article 2 of the directive and in the light of point 13 of Annex A.According to the Commission the effect of those provisions is that the provision of a service is taxable only if the service was given for valuable consideration and the basis for assessment is the value of that consideration, that is to say, everything received in return for the service: therefore there must be a “direct relationship between the service provided and the consideration received”. It further follows from those provisions that “the consideration must be capable of being expressed in money”, that interpretation being confirmed by Article 9 of the Second Directive which stipulates that the standard rate of the tax shall be fixed at a percentage of the basis of assessment. That basis of assessment is formed by the consideration of what is actually received in return or “in other words, by the ‘subjective’ value and not an ‘objective’ or rather ‘normal’ value, that is to say, by a value estimated according to objective criteria”.The Commission then sets out to furnish proof for its argument, contending first of all that it is to be found in the differing definition concerning the basis of assessment in the case of the importation of goods, since, in that case, there is reference to the “normal price” in Regulation No 803/68 of the Council of 27 June 1968 on the valuation of goods for customs purposes (Official Journal, English Special Edition 1968 (I), p. 170).The same applies to the supply of goods in two particular cases — provided for by Article 5 (3) (a) of the Second Directive in relation to (1) the appropriation by a taxable person, from his undertaking, of goods which he applies to his own private use or transfers free of charge, (2) the use for the needs of his undertaking, by a taxable person, of goods produced or extracted by him or by another person on his behalf — the basis of assessment is the “normal” value “by way of clear exception to the principle of the ‘subjective’ value which is applicable generally to the supply of goods and to the provision of services”.The Commission states that the nature of VAT explains why “the Second Directive is based generally on ‘subjective’ value as a criterion for assessment in regard to internal trade”. It is in the nature of a tax on consumption which means that it is the actual outlay of the consumer which must be taxed and that it is only when no price has been paid by the consumer that there is cause to adopt the criterion of normal value. In this respect the Second Directive refers to that criterion in the specific case of the supply of goods but not in the case of the provision of services. The question of using “normal” value is tied up with the question whether that use “is necessary to prevent a distortion of competition or unjustified fiscal advantages”. The two particular cases cited above together with point 6 of Annex A show that “an attempt is made to achieve taxation which is as neutral as possible”, sometimes by widening the field of taxation, sometimes by abolishing the right tó deduct the input tax.Consequently, if it is assumed that the storage was undertaken free of charge and did not therefore constitute a taxable transaction, it must also be said that the cooperative is not entitled to deduct VAT on the goods and services utilized to enable that storage to be provided. But the Gerechtshof rejected that subsidiary submission of the inspector and the Hoge Raad does not deal with it.Finally, to end its argument, the Commission submits that the Netherlands Wet op de omzetbelasting of 1968 adopted pursuant to the First Directive is also based on the “subjective” aspect of the value to be taken into consideration as the basis of assessment and only departs from that principle in respect of “a few exceptions in the case of the supply of goods and none in the case of services”. Article 8 thereof makes “consideration” the criterion for assessment and “consideration” is defined as “the total amount — or, if that received in return does not consist of money, the total value of that received in return — which is charged for the supply of goods or for a service, or, if more is provided in return than is actually charged, that which is provided in return”. The distinction between the supply of goods and services is also conveyed in the definition of services contained in the Law; “all services, not consisting in the supply of goods, which are provided for consideration” (Article 4 (1) of the said Law); the words “for consideration” do not reappear in the definition of the supply of goods because certain supplies of goods are also taxable where there is no consideration. Consequently the definition of taxable events referred to in Article 1 of the Netherlands Law does not contain the qualifying words “for valuable consideration” and is somewhat different from that of the Second Directive which expressly adopts that requirement. That difference explains why “the Hoge Raad did not also add the words ‘against payment’ used in Article 2 of the directive, to its request for a preliminary ruling”.

Staatssecretaris van Financiën v Association coopérative "Coöperatieve Aardappelenbewaarplaats GA" (154/80)

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