Action brought on 8 July 2016 — European Commission v Federal Republic of Germany
(Case C-380/16)
Language of the case: German
Parties
Applicant: European Commission (represented by: M. Owsiany-Hornung and M. Wasmeier, Agents)
Defendant: Federal Republic of Germany
Form of order sought
The applicant claims that the Court should:
– declare that, pursuant to the first paragraph of Article 258 of the Treaty on the Functioning of the European Union, the Federal Republic of Germany has failed to fulfil its obligations under Article 73 and Articles 306 to 310 of the VAT Directive (Directive 2006/112/EC) by excluding travel services used by taxable persons for their business from the special scheme for travel agents and allowing travel agents, in so far as the special scheme is applicable to them, to determine on a flat-rate basis the tax assessment base for groups of services and for each taxable period;
order the Federal Republic of Germany to pay the costs of the proceedings.
Pleas in law and main arguments
The applicant submits that the scheme laid down in Germany for the calculation of value added tax on travel services is not consistent with Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax. 1 That directive provides, in Articles 306 to 310, a special scheme under which the travel services provided by a travel agent to a customer are to be treated as a single service. German law unlawfully departs from that scheme.
First, it is not permitted to exclude taxable persons who use travel services for their business from the application of the special scheme. The Court has already ruled in its judgment of 26 September 2013 in Case C-189/11, 2 Commission v Spain, that the special scheme must be applied not only to services provided to private final consumers but also to services provided to taxable traders. It is not open to the Member States to restrict the application of that scheme solely to the former category.
Second, the method of calculation provided for under the German law on turnover tax is incompatible with Directive 2006/112/EC. Pursuant to Article 73 and Articles 306 to 310 of that directive, the taxable amount must be determined separately for each journey. German law, by contrast, permits a flat-rate calculation of the profit margin for ‘groups of services’ or for all journeys within a specified period of time. The Court also held in the abovementioned judgment that a flat-rate calculation of that kind is not consistent with the common system of value added tax.
____________1 OJ 2006 L 347, p. 1.
2 EU:C:2013:587.