Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Sixth Directive - Scope - Supply of space for the sale of narcotic drugs - Covered

(Council Directive 77/388, Art. 2)

Summary

$$Article 2 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is to be interpreted as meaning that renting out a space for the sale of narcotic drugs - effected with the agreement of the supplier of the service - falls within the scope of that directive.

Renting out such space is, in principle, an economic activity and the fact that the activities pursued there constitute a criminal offence, which may make the renting unlawful, does not alter the economic character of the renting and does not prevent competition in the sector, including that between lawful and unlawful activities. Accordingly, not to charge VAT thereon would undermine the principle of fiscal neutrality of the VAT scheme.