Case C-384/95

Landboden-Agrardienste GmbH & Co. KG

v

Finanzamt Calau

Reference for a preliminary ruling from the Finanzgericht des Landes Brandenburg

‛VAT — Supply of services — National compensation for the extensification of potato production’

Opinion of Advocate General Jacobs delivered on 25 September 1997   I-7389

Judgment of the Court (Fifth Chamber), 18 December 1997   I-7399

Summary of the Judgment

Tax provisions — Harmonization of laws — Turnover taxes — Common system of value added tax — Taxable transactions — Supply of services — Extensification, in return for compensation, of potato production — Excluded

(Council Directive 77/388, Arts 6(1) and 11(A)(1)(a))

On a proper construction of Articles 6(1) and 11(A)(1)(a) of the Sixth Directive 77/388 on the harmonization of the laws of the Member States relating to turnover taxes, which are concerned with the definition of a supply of services and the constitution of the taxable amount respectively, an undertaking given by a farmer under a national compensation scheme not to harvest at least 20% of his potato crop does not constitute a supply of services for the purposes of the directive. Consequently, compensation received for that purpose is not subject to turnover tax.

In order for such an undertaking to be covered by the common system of value added tax it must imply consumption, whereas the farmer giving the said undertaking does not provide services to an identifiable consumer or any benefit capable of being regarded as a cost component of the activity of another person in the commercial chain.