On 14 March 2019, the Court of Justice of the European Union (ECJ) delivered the judgement between A & G Fahrschul-Akademie GmbH and Finanzamt Wolfenbüttel, concerning the VAT exemption for education and driving school tuition.
SUMMARY OF THE FACTS
A & G operates a driving school in the legal form of a limited liability company. It did not show the amount of turnover tax due separately in the invoices which it issued. For the tax year 2010 (‘the period at issue’), it initially declared taxable transactions.
The tax office relied on A & G’s turnover tax declaration. A & G applied for the amount owed by it in terms of VAT to be reduced to zero, that the tax office turned down. A & G’s objection and action against that decision of the tax office were dismissed. The Finance Court (Finanzgericht, Germany) held, inter alia, that A & G could not rely on the tax exemption referred to in Article 132(1)(j) of Directive 2006/112 due to the services provided by A & G, consisting in the provision of theoretical tuition and practical driving instruction, were not, that court found, covered by the concept of ‘school or university education’ within the meaning of that provision, since, by virtue of a recommendation for road safety education at school in force during the period at issue, practical driving instruction was neither a necessary nor a desirable component of such education. A & G contests that decision in its appeal before the Federal Finance Court (Bundesfinanzhof, Germany).
QUESTIONS REFERRED TO THE ECJ
(1) Does the concept of “school or university education” in Article 132(1)(i) and (j) of Directive [2006/112] cover driving school tuition to acquire category B and category C1 driving licences?
(2) If the answer to the first question is in the affirmative, can the applicant [in the main proceedings be recognised] as “an organisation having similar objects” for the purposes of Article 132(1)(i) of Directive [2006/112] on the basis of the provisions on the driving instructor examination and the issue of a driving instruction and driving school licence in [the Gesetz über das Fahrlehrerwesen (Law on driving instructors) of 25 August 1969], and of the public interest in the training of learner drivers to be safe, responsible and environmentally aware road users?
(3) If the answer to the second question is in the negative, does the term “tuition given privately by teachers” contained in Article 132(1)(j) of Directive [2006/112] require that the taxable person be an individual trader?
(4) If the answers to the second and third questions are in the negative, is an instructor always providing tuition privately within the meaning of Article 132(1)(j) of Directive [2006/112] if he acts on his own account and at his own risk, or must further requirements be met to qualify as a private teacher?’
Conclusion by the ECJ
The Court upheld that the concept of ‘school or university education’, within the meaning of Article 132(1)(i) and (j) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, must be interpreted as not covering motor vehicle driving tuition provided by a driving school, such as that at issue in the main proceedings, for the purpose of acquiring driving licences for vehicles in categories B and C1 referred to in Article 4(4) of Directive 2006/126/EC of the European Parliament and of the Council of 20 December 2006 on driving licences.
For more information on this case, please contact:
Franco Falzon C.P.A. LL.M
Olga Ivanova LL.M
T: +356 2010 7771
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