Keywords
Summary

Keywords

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Tax provisions ° Harmonization of laws ° Turnover tax ° Common system of value added tax ° Taxable transactions ° Supply of services ° Definitive discontinuation, by means of compensation, of milk production ° Excluded

(Council Regulation No 1336/86; Council Directive 77/388, Arts 6(1) and 11(A)(1)(a))

Summary

Articles 6(1) and 11(A)(1)(a) of the Sixth Council Directive (77/388/EEC) on the harmonization of the laws of the Member States relating to turnover taxes, in respect of the definition of a supply of services and the constitution of the taxable amount, respectively, are to be interpreted as meaning that an undertaking to discontinue milk production given by a farmer under Regulation No 1336/86 does not constitute a supply of services. Consequently, any compensation received for that purpose is not subject to turnover tax.

Where it grants such compensation, the Community is not in the situation of a consumer who remunerates a service supplied by a farmer who gives such an undertaking, but is acting in the common interest of promoting the proper functioning of the Community milk market.