Keywords
Summary

Keywords

1 Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Sixth Directive - Scope - Unlawful operation of games of chance - Included

(Council Directive 77/388, Art. 2)

2 Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Exemptions provided for by the Sixth Directive - Exemption for games of chance - Power of the Member States to lay down the conditions and limitations of the exemption - Limits - Exemption from tax solely for lawful games of chance - Not permissible

(Council Directive 77/388, Art. 13(B)(f))

Summary

3 While imports or supplies of products which, because of their special characteristics, may not be marketed or incorporated into economic channels, such as narcotic drugs or counterfeit currency, are wholly alien to the provisions of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes and do not give rise to any value added tax debt, by contrast, outside those cases where all competition between a lawful economic sector and an unlawful sector is ruled out, the principle of fiscal neutrality precludes a generalised distinction from being drawn in the levying of value added tax between unlawful and lawful transactions.

Those considerations relating to the import or supply of goods apply equally to the supply of services such as the organisation of games of chance. Those games, and roulette in particular, are lawfully played in a number of Member States. Since unlawful transactions in the operation of a game of chance are in competition with lawful activities, the principle of fiscal neutrality precludes their being treated differently as regards value added tax. The unlawful operation of a game of chance, in the event roulette, therefore falls within the scope of the Sixth Directive.

4 Article 13(B)(f) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as meaning that a Member State may not impose value added tax on the unlawful operation of a game of chance when the corresponding activity carried on by a licensed public casino is exempted.

The exemptions provided for by Article 13(B) of the directive are to be applied in accordance with the principle of fiscal neutrality inherent in the common system of value added tax. That requirement also applies when the Member States exercise their power under Article 13(B)(f) to lay down the conditions and limitations of the exemption. The principle of fiscal neutrality precludes a generalised distinction from being drawn in the levying of value added tax between unlawful and lawful transactions. It follows that Member States cannot reserve the exemption solely to lawful games of chance.