In HMRC v British Film Institute(Case C-592/15) (15 February 2017), the CJEU found that Sixth VAT Directive art 13A(1)(n) (reproduced below) was not sufficiently clear and precise to have direct effect:
Article 13A(1)(n) Sixth VAT Directive (1977) provides: ‘Member states shall exempt the following…:
… (n) certain cultural services … supplied by bodies governed by public law or by other cultural bodies recognised by the member state concerned’.
The UK only implemented the above provision on 1 June 1996. The British Film Institute (BFI) is a non-profit making body, promoting cinema in the UK. Between 1 January 1990 and 31 May 1996, BFI paid VAT at the standard rate on rights of admission to showings of films. It then submitted a claim for repayment, which was denied. The issue was whether art 13A(1)(n) had direct effect, so that in the absence of implementation by the UK, BFI could rely on the provision.
BFI contended that the expression ‘certain cultural services’ should be interpreted as referring to all cultural services supplied by bodies governed by public law or other cultural bodies recognised by the member state concerned, and was therefore sufficiently clear and precise to have direct effect.
The CJEU thought, however, that BFI’s interpretation did not correspond to the ordinary meaning of the term ‘certain’, as used in the provision. The court added that under its own case law, exemptions should be interpreted strictly. Finally, the court noted that the European Parliament had deliberately chosen not to adopt an exhaustive list of exempt cultural services and to leave the definition of the content to the discretion of each member state. The provision was not clear and precise.
Why it matters: Both the FTT and the UT had found that the relevant provision had direct effect. On appeal from HMRC, the Court of Appeal had stayed the proceedings and applied for a preliminary ruling. The CJEU followed the opinion of the advocate general and held that the provision did not have direct effect.
In HMRC v British Film Institute(Case C-592/15) (15 February 2017), the CJEU found that Sixth VAT Directive art 13A(1)(n) (reproduced below) was not sufficiently clear and precise to have direct effect:
Article 13A(1)(n) Sixth VAT Directive (1977) provides: ‘Member states shall exempt the following…:
… (n) certain cultural services … supplied by bodies governed by public law or by other cultural bodies recognised by the member state concerned’.
The UK only implemented the above provision on 1 June 1996. The British Film Institute (BFI) is a non-profit making body, promoting cinema in the UK. Between 1 January 1990 and 31 May 1996, BFI paid VAT at the standard rate on rights of admission to showings of films. It then submitted a claim for repayment, which was denied. The issue was whether art 13A(1)(n) had direct effect, so that in the absence of implementation by the UK, BFI could rely on the provision.
BFI contended that the expression ‘certain cultural services’ should be interpreted as referring to all cultural services supplied by bodies governed by public law or other cultural bodies recognised by the member state concerned, and was therefore sufficiently clear and precise to have direct effect.
The CJEU thought, however, that BFI’s interpretation did not correspond to the ordinary meaning of the term ‘certain’, as used in the provision. The court added that under its own case law, exemptions should be interpreted strictly. Finally, the court noted that the European Parliament had deliberately chosen not to adopt an exhaustive list of exempt cultural services and to leave the definition of the content to the discretion of each member state. The provision was not clear and precise.
Why it matters: Both the FTT and the UT had found that the relevant provision had direct effect. On appeal from HMRC, the Court of Appeal had stayed the proceedings and applied for a preliminary ruling. The CJEU followed the opinion of the advocate general and held that the provision did not have direct effect.
