Jurisprudential accents on the notion of economic activity in value added tax matter

• Author: Ioana Maria Costea
• Position: University, Iasi - Romania
• Pages: 21-25

AGORA International Journal of Juridical Sciences, www.juridicalj ournal.univagora.ro

ISSN 1843-570X, E-ISSN 2067-7677

No. 4 (2013), pp. 21-25

21

JURISPRUDENTIAL

ACCENTS

ON

THE

NOTION

OF

ECONOMIC

ACTIVITY

IN

VALUE

ADDED

TAX

MATTER

I. M. Costea

Ioana Maria Costea

Faculty of Law, the Law Departement

“Alexandru Ioan Cuza” University, Iai, Romania

* Corespondence: Ioana Maria Costea, Alexandru Ioan Cuza University, 11th Carol I Blvd.,

700506, Iai, Romania

E-mail: ioana.costea@uaic.ro

Abstract

Value Add Tax is the tax with the deepest harmonization level on the European single

market. A crucial role in determining the unity of the legislative national formulas on Value

Added Tax came to the Court of Justice of the European Union. The present study is a

synthesis of these jurisprudential solutions with the aim of amply defining the notion in cause.

Key-words: Value Added Tax, Court of Justice of the European Union, economic

activity, definition, exemptions.

Introduction

Value Added Tax is the result of a European construction, with intense jurisprudential

interference. The Court of Justice of the European Union has been called upon to specify the

notions of legal text. The Court has ruled frequently on the fundament of the Value Added

Tax, the concept of economic activity. The Court identified several nuances to the cases

presented by the national fiscal jurisdiction, and by doing so; it consolidated the concept in

question. This case law brings contractual and factual criteria to the legal definition and

extends the concept to its limits, underlining its true mining.

A. General provisions

The legal definition of the taxable persons resides in article 9 from Council Directive

2006/112/EC of 28 November 2006 on the common system of value added tax

1

. The text

stipulates: “Taxable person” shall mean any person who, independently, carries out in any

place any economic activity, whatever the purpose or results of that activity. Any activity of

producers, traders or persons supplying services, including mining and agricultural activities

and activities of the professions, shall be regarded as “economic activity”. The exploitation

of tangible or intangible property for the purposes of obtaining income there from on a

continuing basis shall in particular be regarded as an economic activity.

1

Precedent regulation has fo und in the article 4 of the Sixth Council Directive 77/388/EEC of 17 May 1977 on

the harmonization of the laws of the Member States relating to turnover taxes - Common system of value added

tax: uniform ba sis of asses sment: 1. “Taxable person” shall mean any person who independently carries out in

any place any economic activity spe cified in paragraph 2, whatever the purpose or results of that activity. 2. The

economic activities referred to in paragraph 1 shall comprise all activities of producers, trad ers and p ersons

supplying services including mining and agricultural activities and activities of the professions. The exploitation

of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also

be considered an economic activity.