Action brought on 26 September 2006 — Commission of the European Communities v Bundesrepublik Deutschland

(Case C-401/06)

(2006/C 294/55)

Language of the case: German

Parties

Applicant: Commission of the European Communities (represented by: D. Triantafyllou, acting as Agent)

Defendant: Bundesrepublik Deutschland

Form of order sought

Pleas in law and main arguments

Under the third indent of Article 9(2)(e) of the Sixth VAT Directive the place of supply of certain services which are performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier is the place where the customer has established his business or has a fixed establishment to which the service is supplied or, in the absence of such a place, the place where he has his permanent address or usually resides. Those services are the services of consultants, engineers, consultancy bureaux, lawyers, accountants and other similar services. That provision of the directive is a rule of conflict which determines the place of taxation of the services and the jurisdiction of the Member States.

Under the provisions of German law and the administrative practice of the tax authorities based thereon, the place where the services of an executor are supplied is the place from which the operator provides its services. The place of supply in respect of those services is therefore not determined under Article 9(2)(e) of the directive when they are performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier.

That legislation and administrative practice does not comply with the provisions of Article 9 of the Sixth VAT Directive. Services which are performed in the capacity of executor for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier are services of which the place of supply must be determined in accordance with Article 9(2)(e) of the Sixth VAT Directive.

The Commission takes the view, contrary to the arguments of the German Government, that the activities of an executor are also among those activities which a lawyer performs principally and habitually. The activity as such rather than the professional title should be taken as a basis for the evaluation: it is the nature of the service which is relevant.

The term ‘other similar services’ does not refer to a feature common to the activities named in the third indent of Article 9(2)(e) of the Sixth VAT Directive. It is sufficient that the service to be evaluated is similar to any of the activities expressly listed in that provision. That is the case when both activities serve the same purpose. According to the determination of the European Court of Justice, the principal and habitual activities of a lawyer include those of representing and defending the interests of a client. In so far as the Court of Justice refers to ‘representing or defending the interests of a person’, that requirement is also present in the activities of an executor: he represents and defends the interests of the testator. His activities correspond to those of an independently appointed representative and advisor. The fact that executorship is not an activity reserved to the legal profession does not preclude the two activities from serving the same purpose.

(1)  OJ L 145 of 13.6.1977, p. 1.