Case C-49/09

European Commission

v

Republic of Poland

(Failure of a Member State to fulfil obligations – Value added tax – Directive 2006/112/EC – Later accession of Member States – Transitional provisions – Temporal application – Application of a reduced rate – Clothing and clothing accessories for babies and children’s footwear)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Member States’ option of applying a reduced rate on a transitional basis

(Council Directive 2006/112, Arts 98, 115 and Annex III)

A Member State which applies a reduced value added tax rate of 7% to supplies, import and intra-Community acquisition of clothing and clothing accessories for babies and of children’s footwear, although on 1 January 1991 it did not apply value added tax within the meaning of Directive 2006/112, or a taxation system displaying the essential characteristics of value added tax, and the conditions for the application of Article 115 of that directive were thus not satisfied, fails to fulfil its obligations under Article 98 of Directive 2006/112 on the common system of value added tax, and Annex III thereto.

The derogation provided for in Article 115 is subject to the fulfilment of two cumulative conditions for its application. The first requirement is that the Member State concerned should at 1 January 1991 have applied VAT within the meaning of Directive 2006/112 or, at the very least, a taxation system with similar characteristics to the common system of VAT. The second requirement is that, in the context of that taxation, supplies of the goods and services referred to in Article 115 should have been subject to a reduced rate at 1 January 1991.

(see paras 42, 54, 57, operative part)