E. T. v Dyrektor Izby Administracji Skarbowej we Wrocławiu (C-213/24)

Contents

Judgment of the Court (Sixth Chamber)3 April 2025^note(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Article 9(1) — Concepts of taxable person and economic activity — Sale of agricultural land for residential development — Preparation for sale by an agent acting as a professional trader — Statutory joint ownership of assets between co-owning spouses)In Case C‑213/24 [Grzera],^noteREQUEST for a preliminary ruling under Article 267 TFEU from the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), made by decision of 28 December 2023, received at the Court on 19 March 2024, in the proceedingsE. T.vDyrektor Izby Administracji Skarbowej we Wrocławiu,THE COURT (Sixth Chamber),composed of A. Kumin, President of the Chamber, I. Ziemele and S. Gervasoni (Rapporteur), Judges,Advocate General: J. Kokott,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– E. T., by T. Michalik, doradca podatkowy,– the Dyrektor Izby Administracji Skarbowej we Wrocławiu, by M. Kowalewska and T. Wojciechowski,– the Polish Government, by B. Majczyna, acting as Agent,– the Czech Government, by L. Březinová, M. Smolek and J. Vláčil, acting as Agents,– the European Commission, by Ł. Habiak and M. Herold, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).

2The request has been made in proceedings between E. T., a natural person, and the Dyrektor Izby Administracji Skarbowej we Wrocławiu (Director of the Tax Administration Chamber, Wrocław, Poland) (‘the Tax Authority’) concerning E.T.’s liability to value added tax (VAT) for the sale of several plots of land.

Legal context

European Union law

3Under Article 2(1)(a) of the VAT Directive, the supply of goods for consideration within the territory of a Member State by a taxable person acting as such is to be subject to VAT.

4Article 9(1) of that directive provides:‘“Taxable person” shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as “economic activity”. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.’

Polish law

The Law on the Tax on Goods and Services

5Article 15 of the Ustawa o podatku od towarów i usług (Law on the Tax on Goods and Services) of 11 March 2004 (Dziennik Ustaw of 2017, item 1221), in the version applicable to the dispute in the main proceedings, provides:(1) “Taxable persons” shall mean legal persons, organisational units without legal personality and natural persons which independently carry out an economic activity referred to in paragraph 2, whatever the purpose or result of that activity.(2) Any activity of producers, traders or persons supplying services, including mining and agricultural activities and the activities of persons in the professions, shall be regarded as “economic activity”. Economic activity includes, in particular, activities consisting in the exploitation of goods or intangible or legal assets on a continuing basis for the purpose of obtaining income therefrom.’

The Law establishing the family and guardianship code

6Article 31(1) of the Ustawa – Kodeks rodzinny i opiekuńczy (Law establishing the family and guardianship code) of 25 February 1964 (Dziennik Ustaw of 2017, item 682), in the version applicable to the dispute in the main proceedings, is worded as follows:‘Upon marriage, joint property ownership (statutory joint property ownership) is created between the spouses by operation of law, which covers property acquired during the marriage by both spouses or by one of them (joint property). Property not covered by statutory joint property ownership constitutes the personal property of each spouse.’

7Under Article 35 of that law:‘During the period of statutory joint property ownership, neither spouse can demand the division of joint property. Nor may a spouse dispose of or undertake to dispose of the share that will accrue to him or her in the joint property or in the individual items included in that property in the event that the joint property ownership ceases.’

8Article 37(1) of that law provides:‘The consent of both spouses is required for:1. any legal act resulting in the transfer of real estate, a charge on real estate, the purchase for consideration of real estate or a perpetual usufruct, or resulting in the provision of real estate and the enjoyment of real estate’.

The dispute in the main proceedings and the questions referred for a preliminary ruling

9In 1989, E. T. and her husband, W. T., became the owners of several plots of agricultural land under an agreement made by W. T.’s parents transferring a farm to a successor free of charge. Those plots entered into the statutory joint ownership of the spouses T.

10In 2011, the couple decided to sell those plots and entered into a contract of mandate with the company B. A. Z. (‘the contractor’) for that purpose. The contractor was responsible, in particular, for planning the subdivision of the property into smaller plots and carrying out the necessary steps to amend the entries in the land register and the land and mortgage register accordingly, changing the designation of the plots in the local land use plan (from agricultural land to building land), connecting the property to public utility networks, advertising the plots to potential buyers, and preparing the necessary documents for the conclusion of notarial deeds of sale with the plots’ buyers. The spouses gave the contractor authority to act on their behalf with the various competent Polish authorities. The contractor’s remuneration corresponded to an amount representing the difference between the sale prices stipulated in the contract of mandate and the actual sale prices.

11The plots were sold between 2017 and 2021.

12The tax authority contends that those sales constituted an economic activity subject to VAT, arguing that the plots of land at issue, which were agricultural land, were converted into building land before their sale and that an additional plot was bought in order to create internal roads and access roads to the various lots created. By decisions of 28 July 2022 and 19 September 2022, it therefore subjected E. T. to VAT on those sales and adopted a similar decision in respect of W. T.

13For their part, E. T. and W. T. submit that the sales fall within the mere management of personal assets, with the result that they are not subject to VAT. E. T. has therefore brought an action against the decision of the tax authority concerning her before the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław, Poland), which is the referring court.

14In its request for a preliminary ruling, the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław) states that there is doubt as to the interpretation of Article 9(1) of the VAT Directive in a situation where, as in the case before it, the plots at issue were not used for any economic activity before their sale and the economic risk which characterises the independent exercising of an economic activity is, as a result of the contract of mandate concluded by E.T. and W.T., essentially borne by the contractor with whom they contracted. It also questions the tax authority’s practice of classifying each spouse separately as liable for VAT by attributing to each of them half of the value of the sales, whereas, under national law, there is statutory joint ownership between spouses during their marriage and those spouses act jointly for the purposes of transactions involving property falling within that joint ownership.

15In those circumstances, the Wojewódzki Sąd Administracyjny we Wrocławiu (Regional Administrative Court, Wrocław) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Must the provisions of [the VAT Directive], and in particular Article 2(1) and Article 9(1) thereof, be interpreted as meaning that a person who sells an immovable property, which was not previously used for economic activity, and commissions the preparation for sale [of that property] to a professional trader who subsequently, as that person’s agent, undertakes a series of organised activities with the aim of dividing the property and selling it for a higher price, independently carries out an economic activity?(2) Must the provisions of [the VAT Directive], and in particular Article 9(1) thereof, be interpreted as meaning that each of the cooperating spouses is to be considered separately, as a person who independently carries out an economic activity?’

Consideration of the questions referred

The first question

16By its first question, the referring court asks, in essence, whether Article 2(1) and Article 9(1) of the VAT Directive are to be interpreted as meaning that a person who transfers land which was initially part of his or her personal assets by entrusting the preparation of the sale to a professional trader, who carries out, as that person’s agent, a series of transactions for the purposes of that sale, may be regarded as a taxable person carrying out an economic activity independently.

17In its question, the referring court refers to Article 2(1) and Article 9(1) of the VAT Directive. As the concept of supply of goods for consideration set out in Article 2(1)(a) of the VAT Directive is not in dispute in the main proceedings and only Article 9(1) of the VAT Directive defines the concepts of taxable person and economic activity regarding which the referring court is questioning the Court of Justice, it must be held that the first question concerns only the interpretation of Article 9(1) of that directive.

18In that regard, it should be borne in mind that the VAT Directive attributes a very wide scope to VAT, by giving the concept of ‘taxable person’ a broad definition focused on independence in the exercise of an ‘economic activity’, which is itself defined broadly as comprising all activities of producers, traders and persons supplying services and, in particular, the exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis (see, to that effect, judgments of 12 September 2000, Commission v Greece, C‑260/98, EU:C:2000:429, paragraphs 24 to 26, and of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 27 and the case-law cited). It is the existence of such an activity which establishes the status of ‘taxable person’ (judgment of 15 September 2011, Słaby and Others, C‑180/10 and C‑181/10, EU:C:2011:589, paragraph 43 and the case-law cited).

19As regards the sale of building land, the Court has stated that a relevant assessment criterion is the fact that the party concerned has taken active steps to market property by mobilising resources similar to those deployed by producers, traders or persons supplying services, such as the carrying out of preparatory work to make development possible, and the deployment of proven marketing measures. Such initiatives do not normally fall within the scope of the management of personal assets so that the resulting transactions cannot be regarded as the mere exercise of the right of ownership. Such initiatives more often fall within the scope of an activity which is carried out for the purpose of obtaining income therefrom on a continuing basis and thus may be classified as an economic activity (judgments of 15 September 2011, Słaby and Others, C‑180/10 and C‑181/10, EU:C:2011:589, paragraphs 39 to 41 and 46; of 9 July 2015, Trgovina Prizma, C‑331/14, EU:C:2015:456, paragraph 24; and of 20 January 2021, AJFP Sibiu and DGRFP Braşov, C‑655/19, EU:C:2021:40, paragraph 31).

20It is apparent from the request for a preliminary ruling that, in the present case, the following actions, which may be described as active steps to market property by mobilising resources similar to those of real estate professionals, were carried out:– subdividing the property into smaller plots and carrying out the necessary steps to amend the entries in the land register and the land and mortgage register;– changing the designation of the plots in the local land use plan (from agricultural land to building land);– purchasing an additional plot of land for the purpose of creating internal roads and access roads to individual plots;– connecting the property to public utility networks;– removing elements incompatible with the intended use of the plots;– obtaining the required authorisations from the competent authorities;– promoting the plots to potential buyers;– preparing the necessary documents for the conclusion of notarial deeds of sale.

21Furthermore, it is also apparent from the case-law that the fact that the tangible property in question was initially acquired in order to meet the personal needs of the buyer does not preclude that property from being subsequently used for the purposes of the exercise of an ‘economic activity’ within the meaning of Article 9(1) of the VAT Directive (judgment of 19 July 2012, Rēdlihs, C‑263/11, EU:C:2012:497, paragraph 39 and the case-law cited). It follows that the fact, highlighted by the referring court, that the land at issue was not acquired for the purpose of carrying out an agricultural or commercial activity does not preclude the sale of that land from being classified as the exercise of an economic activity.

22It is true that, in the dispute in the main proceedings, as is highlighted in the request for a preliminary ruling, active steps to market the property, referred to in paragraph 20 of the present judgment, were carried out, for the most part, not by the owner of the land for sale, but by a professional trader authorised to do so. The referring court questions, in that regard, whether that contract of mandate is such as to reduce to a minimum the economic risk borne by the transferor and thus to exclude the possibility that that transferor may be regarded as having carried out an economic activity independently.

23In order to assess whether an economic activity is being carried out in an independent manner, it is necessary to examine whether the person concerned performs his or her activities in his or her own name, on his or her own behalf and under his or her own responsibility, and whether he or she bears the economic risk associated with the carrying-out of those activities (judgment of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraph 28 and the case-law cited).

24It is apparent from the contract of mandate concluded in the main proceedings, as described by the referring court, that the contractor’s activity is limited to carrying out the tasks listed in paragraph 20 of the present judgment in the name and on behalf of its principals, who remain the selling owners of the land at issue in all deeds of sale relating thereto.

25As is also apparent from that contract, the remuneration for the contractor’s activities, including that covering the costs incurred from third parties for the carrying-out of the tasks necessary for the performance of those activities, is admittedly dependent on the price obtained for the sale which the contractor alone will have negotiated. The amount of that remuneration was, in fact, set as representing the difference between the actual sale price of each plot and that stipulated in that contract. Accordingly, the contractor bears the economic risk linked to the mandate and to the carrying-out of the steps for marketing the plots provided for by that mandate. In doing so, as is highlighted by the referring court, that method of remuneration reduces the economic risk borne by the principals. However, the final economic risk, which would materialise in the absence of a sale, due to the failure to perform the contract of mandate or the lack of a buyer willing to purchase the plots of land, falls solely on the principals, subject to that contract providing otherwise, which it will be for the referring court to ascertain.

26It follows from the foregoing that the answer to the first question is that Article 9(1) of the VAT Directive must be interpreted as meaning that a person who transfers land which was initially part of his or her personal assets by entrusting the preparation of the sale to a professional trader who carries out, as that person’s agent, active steps to market the property by mobilising, for the purposes of that sale, resources similar to those deployed by producers, traders or persons supplying services within the meaning of that provision, may be regarded as a taxable person subject to VAT carrying out an economic activity independently.

The second question

27By its second question, the referring court asks, in essence, whether Article 9(1) of the VAT Directive is to be interpreted as meaning that, in the context of a sales transaction classified as an economic activity within the meaning of the VAT Directive, each of the co-owning spouses, taken separately, must be regarded as a taxable person carrying out an economic activity independently or whether the statutory joint ownership formed by those co-owning spouses must be so regarded.

28It should be borne in mind, in that regard, that the terms used in Article 9 of the VAT Directive, in particular the term ‘any person who’, give the notion of ‘taxable person’ a broad definition, focused on independence in the exercise of an economic activity, to the effect that all persons – natural or legal, both public and private, as well as entities devoid of legal personality – who, in an objective manner, satisfy the criteria set out in that provision must be regarded as being taxable persons for the purposes of VAT (judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraph 39 and the case-law cited).

29In order to determine who, in circumstances such as those at issue in the main proceedings, must be regarded as a ‘taxable person’ for the purposes of VAT, it must be established who has independently carried out the economic activity referred to. The criterion of independence concerns allocation of the transaction concerned to a particular person or entity, whilst also guaranteeing that that person or entity can exercise any right of deduction with legal certainty. To that end, and as has already been recalled in paragraph 23 of the present judgment, it is necessary to examine whether the person or entity concerned performs an economic activity in his, her or its own name, on his, her or its own behalf and under his, her or its own responsibility, and whether he, she or it bears the economic risk associated with the carrying-out of those activities (judgment of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraphs 40 and 41 and the case-law cited).

30The referring court considers that, in order to determine who is the taxable person in the main proceedings, that is to say, whether it is each of the spouses or the statutory joint ownership formed by those spouses and to which the parcels belong, it is appropriate to take into account the provisions of the Law establishing the family and guardianship code.

31Admittedly, it is settled case-law that, in view of the purpose of the VAT Directive, which is intended to determine the basis of assessment for VAT in a uniform manner and in accordance with EU rules, the status of taxable person must be interpreted in a uniform manner in all the Member States and assessed exclusively on the basis of the criteria set out in Article 9(1) of the VAT Directive (judgment of 17 September 2014, Skandia America (USA), filial Sverige, C‑7/13, EU:C:2014:2225, paragraph 23; see, by analogy, judgment of 8 June 2000, Breitsohl, C‑400/98, EU:C:2000:304, paragraph 48).

32However, taking provisions of national law into account may be useful in determining whether, in circumstances such as those in the main proceedings, the criteria for considering that an economic activity has been carried out independently, recalled in paragraphs 23 and 29 of the present judgment, are satisfied (see, to that effect, judgment of 21 December 2023, Administration de l’enregistrement, des domaines et de la TVA (VAT – Member of a board of directors), C‑288/22, EU:C:2023:1024, paragraph 55).

33While it is ultimately for the national court, which has sole jurisdiction to assess the facts and interpret national law, to determine whether E.T. and W.T. each carried out the sales at issue independently, the Court, which is called on to provide answers of use to the referring court, may provide guidance, based on the case file in the main proceedings and on the observations that have been submitted to it, in order to enable the national court to give judgment in the particular case pending before it (see, to that effect, judgment of 17 December 2020, WEG Tevesstraße, C‑449/19, EU:C:2020:1038, paragraph 31).

34It should be borne in mind, first of all, that the mere fact that the property at issue is part of the statutory joint ownership and is owned jointly by the spouses does not prevent those spouses from being separately subject to tax where the economic activity concerned is carried out separately by one of them (see, to that effect, judgment of 21 April 2005, HE, C‑25/03, EU:C:2005:241, paragraph 74) or where each of them carries out an economic activity independently (see, to that effect, judgment of 24 March 2022, Dyrektor Izby Skarbowej w L. (Loss of flat-rate farmer status), C‑697/20, EU:C:2022:210, paragraphs 24 and 25).

35It may then be noted that the provisions of the Law establishing the family and guardianship code referred to by the referring court, which define joint property and establish the rules governing such property, do not appear, as such, to permit the conclusion that, when property owned jointly is sold, the statutory joint ownership acts in its name, on its own behalf and under its own responsibility, and that it bears the economic risk of that sale.

36However, it is apparent from the request for a preliminary ruling that national practice allows a civil company without legal personality to be treated as an independent taxable person, by being regarded as liable for VAT, separately from each of its partners.

37Furthermore, given that, according to the provisions of Polish law set out by the referring court and by E. T., the sale of joint property requires the consent of each of the spouses and there is no authorisation for either of them to act in the name of the joint ownership, both spouses appear to have acted jointly during the sales at issue and thus, subject to the referring court’s determination, did not appear to third parties (purchasers and public authorities) and to the outside world as each acting independently, which constitutes a relevant factor for identifying the taxable person (see, to that effect, judgments of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraphs 30 and 34, and of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraphs 43 to 46).

38Moreover, even if this is not decisive in the case of acts incidental to the economic activity giving rise to the liability to tax (see, to that effect, judgments of 12 October 2016, Nigl and Others, C‑340/15, EU:C:2016:764, paragraphs 31 and 32, and of 16 September 2020, Valstybinė mokesčių inspekcija (Joint activity agreement), C‑312/19, EU:C:2020:711, paragraph 46), it may be noted that, as is apparent from the request for a preliminary ruling, both spouses also jointly concluded the contract of mandate with the contractor and jointly applied to the local authorities to establish a right of way to access the plots at issue.

39Lastly, it is for the referring court to ascertain whether, taking into account the rules governing the liability of spouses in the context of their activities, it was the statutory joint ownership, and not each spouse individually, which bore the economic risk linked to the sales of land at issue.

40It follows from the foregoing that the answer to the second question is that Article 9(1) of the VAT Directive must be interpreted as meaning that, in the context of a sales transaction classified as an economic activity within the meaning of that directive, that provision does not preclude the statutory joint ownership formed by co-owning spouses from being regarded as a taxable person carrying out an economic activity independently, where those spouses appear, in the eyes of third parties, to have carried out together the sale of land falling within that joint ownership, which constitutes an economic activity, and where the economic risk linked to the exercise of that activity is borne by the joint ownership.

Costs

41Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Sixth Chamber) hereby rules:

1.Article 9(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added taxmust be interpreted as meaning that a person who transfers land which was initially part of his or her personal assets by entrusting the preparation of the sale to a professional trader who, as that person’s agent, takes active steps to market the property by mobilising, for the purposes of that sale, resources similar to those deployed by producers, traders or persons supplying services within the meaning of that provision, may be regarded as a taxable person subject to value added tax (VAT) carrying out an economic activity independently.

2.Article 9(1) of Directive 2006/112must be interpreted as meaning that, in the context of a sales transaction classified as an economic activity within the meaning of that directive, that provision does not preclude the statutory joint ownership formed by co-owning spouses from being regarded as a taxable person carrying out an economic activity independently, where those spouses appear, in the eyes of third parties, to have carried out together the sale of land falling within that joint ownership, which constitutes an economic activity, and where the economic risk linked to the exercise of that activity is borne by the joint ownership.