Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Economic activities within the meaning of Article 4 of the Sixth Directive - Independent activity - Meaning - Where tangible property is let to a company or partnership by one of its members - Covered - Where such letting constitutes the lessor's sole economic activity - Irrelevant

(Council Directive 77/388, Art. 4(1) and (4))

Summary

$$Article 4(1) of the Sixth Directive (77/388/EEC) on the harmonisation of the laws of the Member States relating to turnover taxes is to be interpreted as meaning that, where a person's sole economic activity, within the meaning of that provision, consists in the letting of an item of tangible property to a company or a partnership of which he is a member, that letting must be regarded as an independent activity within the meaning of that provision.

In so far as the activity at issue is concerned, there is between the partnership and the partner no relationship of employer and employee similar to that mentioned in the first subparagraph of Article 4(4) of the Sixth Directive which would preclude the independence of the partner. On the contrary, the partner, in letting tangible property to the partnership, acts in his own name, on his own behalf and under his own responsibility, even if he is at the same time manager of the lessee partnership. The lease in question is granted neither by the management nor by the representatives of the partnership. In those circumstances, it is irrelevant that the partner confines his activity to letting an item of tangible property to the partnership of which he is a member. That circumstance is of no consequence for the purpose of determining whether the partner is acting independently, within the meaning of Article 4(1) of the Sixth Directive, in carrying on the activity concerned but, may, at most, have a bearing on the question whether there can be said to be an economic activity at all, within the meaning of that article.

(see paras 18-19 and 22, and operative part)