On September 29, 2016 on the website of the Court of Justice of the European Union (CJEU) the opinion of Advocate General Bot in Case C‑592/15, Commissioners for Her Majesty’s Revenue and Customs versus British Film Institute, (ECLI:EU:C:2016:733) was published.

In the present case, the Court is requested to define the scope of Article 13A(1)(n) of Sixth Directive 77/388/EEC. That provision states that Member States are to exempt ‘certain cultural services and goods closely linked thereto supplied by bodies governed by public law or by other cultural bodies recognised by the Member State concerned’.

The referring court, the Court of Appeal (England and Wales) (Civil Division) (United Kingdom), seeks to ascertain whether that provision leaves some latitude to the Member States to choose which cultural services may be eligible for such exemption. That court also seeks to ascertain whether that provision is of direct effect and may, therefore, be relied on directly by taxable persons before national courts where the Member State concerned has failed to transpose the Sixth Directive into national law by the end of the period prescribed.

In this Opinion, the Advocate General explains why he considers that Article 13A(1)(n) of the Sixth Directive must be interpreted as meaning that the concept of ‘certain cultural services’ leaves it to the Member States to decide which cultural services may be exempt from value added tax (VAT). The Advocate General explains that it is for the national court to decide, taking account of the nature of the services in question, whether excluding the respondent in the main proceedings, British Film Institute, from entitlement to VAT exemption complies with the principle of fiscal neutrality, and, in particular, whether it entails infringement of the principle of equal treatment in relation to other operators supplying the same services in comparable situations and enjoying exemption from VAT for those supplies.

The Advocate General also states why, in his view, that provision may not be relied on directly by a taxable person before the national court.

The facts of the main proceedings

·   British Film Institute is a non-profit-making body whose role is to promote cinema in the United Kingdom. In 1951, it was agreed that that body could run the National Film Theatre and, from April 2011, it was agreed that it would take on the activities of the UK Film Council.

·   Between 1 January 1990 and 31 May 1996 (‘the period in question’), British Film Institute accounted for VAT at the standard rate on supplies of the right of admission to films shown at the National Film Theatre and at various film festivals.

·   Taking the view that that supply of services amounted to ‘cultural services’ within the meaning of Article 13A(1)(n) of the Sixth Directive, and that, accordingly, those services should have been exempt from VAT, British Film Institute submitted a claim for reimbursement of the VAT paid during the period in question. By letter of 23 November 2009, Her Majesty’s Revenue and Customs rejected that claim. That decision was upheld by the appellant in the main proceedings on review on 3 February 2010.

·   British Film Institute then appealed against that decision to the First-tier Tribunal (Tax Chamber) (United Kingdom). By decision of 5 December 2012, the First-tier Tribunal held that Article 13A(1)(n) of the Sixth Directive was of direct effect, so that the supplies of the respondent in the main proceedings of admissions to showings of films during the period in question were exempt under that provision.

·   Her Majesty’s Revenue and Customs appealed against the decision of 5 December 2012 to the Upper Tribunal (Tax and Chancery Chamber) (United Kingdom). By decision of 12 August 2014, the Upper Tribunal dismissed the appeal. Her Majesty’s Revenue and Customs were then granted permission to appeal to the Court of Appeal (England and Wales) (Civil Division), which decided to stay the proceedings and to refer questions to the Court of Justice on the relevant provisions of European Union law.

The questions referred

The Court of Appeal (England and Wales) (Civil Division) decided to refer the following questions to the Court for a preliminary ruling:

(1)   Are the terms of Article l3A(1)(n) of the Sixth Directive, in particular the words “certain cultural services”, sufficiently clear and precise such that Article 13A(1)(n) is of direct effect so as to exempt the supply of those cultural services by bodies governed by public law or other recognised cultural bodies, such as the supplies made by the Respondent [in the main proceedings], in the absence of any domestic implementing legislation?

(2)   Do the terms of Article 13A(1)(n) of the Sixth Directive, in particular the words “certain cultural services”, permit Member States any discretion in their application by means of implementing legislation and, if so, what discretion?

(3)   Do the same conclusions as above apply to Article 132(1)(n) of [Directive 2006/112]?

Conclusion

The Advocate General proposes that the Court should answer the Court of Appeal (England and Wales) (Civil Division) (United Kingdom) as follows:

(1)   Article 13A(1)(n) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, as amended by Council Directive 92/77/EEC of 19 October 1992, must be interpreted as meaning that the concept of ‘the supply of certain cultural services’ leaves it to the Member States to decide which supplies of cultural services may be exempt from value added tax.

It is for the national court to decide, taking account in particular of the nature of the services in question, whether excluding the respondent in the main proceedings from entitlement to exemption from value added tax complies with the principle of fiscal neutrality, and, in particular, whether it entails infringement of the principle of equal treatment in relation to other operators supplying the same services in comparable situations and enjoying exemption from value added tax for those supplies.

(2)   Article 13A(1)(n) of Sixth Directive 77/388, as amended by Directive 92/77, may not be relied on directly by a taxable person before the national court where the Member State concerned has failed to transpose that directive into national law by the end of the period prescribed.

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