Fishing rights — Supply of services — Place of supply — Appellant German company buying fishing quotas in Austria from company based there — Appellant selling permits to customers residing in different member states — Whether transfer of fishing rights for valuable consideration constituting supply of services connected with immovable property for VAT purposes — Preliminary ruling given
The appellant, a German company, purchased fishing rights for an Austrian river from F, an Austrian company. The appellant sold on the rights to customers residing in different member states. The appellant applied to the Austrian tax authorities for a refund of the VAT paid on the acquisition of the fishing permits. It relied upon the provisions transposing Council Directive 79/1072 (the Eighth Directive) into Austrian law, concerning the arrangements for the refund of VAT in respect of cross-border supplies.
That application was rejected on the ground that the onward sale of the fishing permits constituted a supply of services connected with immovable property situated in Austria, so that a refund of the input tax paid could not be made. The appellant appealed, but the national court stayed the proceedings in order to make a reference to the European Court of Justice (ECJ) for a preliminary ruling on the interpretation of article 9(2)(a) of Council Directive 77/388 (the Sixth Directive).
Article 9(1) established the general rule that the place where a service was supplied was the place where the supplier had established its business or had a fixed establishment from which the service was supplied, or, in the absence of such a place, the place where it had its permanent address or usually resided.
Article 9(2) provided that the place of the supply of services connected with immovable property, including the services of estate agents and experts, and of services for preparing and coordinating construction works, such as the services of architects and of firms providing on-site supervision, should constitute the place where the property was situated.
The question for the court was whether the transfer of fishing rights for valuable consideration accorded with a supply of services connected with immovable property within the meaning of article 9(2)(a).
Held: A preliminary ruling was given.
The transmission of the right to fish by a transfer of fishing permits for valuable consideration constituted a supply of services connected with immovable property within article 9(2)(a), so that the place of supply of those services was the place where the property was situated.
An essential characteristic of immovable property was its attachment to a specific part of the earth’s surface. A piece of land that was permanently delimited, even if it were underwater, could be classified as immovable property. Fishing rights such as those acquired and sold on by the appellant allowed the exercise of such a right over certain very specific parts of the stretch of water concerned. Those rights, which related not to the quantities of water that flowed in the river and were constantly replaced but to geographical areas where those rights might be exercised, were thus connected with a surface covered in water, that was permanently delimited. Consequently, the stretches of river to which the fishing permits related were immovable property within article 9(2)(a).
The fishing rights in this case could be exercised only in relation to the parts of the river referred to in the permits. Therefore, the stretch of water itself was a constituent element of the fishing permits and thus of the transmission of the fishing rights. Moreover, the place where the immovable property was situated was the place of final consumption of the service. It followed that there was a sufficiently direct connection between the transmission of fishing permits and the stretches of water to which they related.
IM Braguglia, acting as agent, and G De Bellis, avvocato dello Stato, appeared for the Italian Government; D Triantafyllou, acting as agent, appeared for the EC Commission.
Eileen O’Grady, barrister
