Opinion of Advocate General Gulmann delivered on 15 September 1992

1 Original language: Danish.

2 Council Directive 77/388ÆEC 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 basis of assessment, OJ 1977 L 145, p. 1).

3 [1988] ECR 3611. Amongst other cases mention should also be made of Case 156/77 Commission v Belgium [1978] ECR 1881.

4 The question is not discussed by the parties to the case. To my Knowledge there is no examination of this particular issue in legal writing on the subject. For a more genereal review of theory and practice in relating to objections of ille-t ality see Kovar, Contentieux de la légalité — L'exception d'illégalité, Jurisclasseur de droit international, 1981, vol. 161-C, part three, sections 19 to 25.

5 See paragraph 16 in the judgment cited in footnote 2.

6 See the Court's judgment in Case 15/81 Gaston Schul [1982] ECR 1409, especially paragraph 14.

7 The Member States concerned are Spain, France, Italy, Luxembourg and Great Britain. The evidence indicates that the other Member Sutes have used the directive's exemption provisions either wholly to exempt the relevant services from VAT whether transport takes place inside or outside the Community (Denmark, Ireland and the Netherlands) or to impose tax on all supplies, whether made inside or outside the Community. That information is contained in a survey submitted as an annex to the working document prepared by the Commission, see annex 18 to the application (sub-annex II).

8 At the Committee's Twenty-fifth Meeting held on 10 and 11 April 1989 the problem was discussed and a majority of the delegations were in favour of allowing the place of destination to determine whether a journey takes place inside or outside the Community. The Committee's recommendations are not binding.

9 It appears from the preparatory documents of the 1980 VAT Law that the reasons for the rules at issue here were the risk of distortion of competition and the need for a simplied tax charge, see Schriftlicher Bericht des Finanzausschusses des Deutschen Bundestages of 8 May 1979 on Article 25 (Annex 16 to the Commission's answers to the Court's questions).

10 See, for example, the judgments in Joined Cases 92/87 and 93/87 Commission v France and the United Kingdom [1989] ECR 405 and Case C-30/89 Commission v France [1990] ECR I-681.

11 In the course of the administrative procedure the Government also referred to point 17 of Annex F, but that was not cited before the Court.

12 The wording of the provision in German and French is as follows: b) die in Anhang F aufgeführten Umsätze unter den in den Mitgliedstaaten bestehenden Bedingungen weiterhin befreien; b) continuer à exonérer les opérations énumérées a l'annexe F dans les conditions existantes dans l'Eut membre;

13 The Commission suggested that the provision should be repealed in its proposal for the Eighteenth VAT Directive on the abolition of certain derogations provided for in Article 28(3) of the Sixth Directive. That part of the Commission's proposal was not, however, adopted by the Member Sutes: see Eighteenth Council Directive, OJ 1989 L 226, p. 21.

14 Thus international sea transport was not covered at all by the tax system previously in force and there was therefore no question of any actual exemption. On the other hand international air transport was in principle subject to VAT, but exempted by a dispensation pursuant to a ministerial decree.

15 Thus it was not the case here that the German Government after first implementing the directive correctly then reintroduced an earlier exemption system. The judgments in Case C-35/90 Commission v Spain [1991] I-5073 and Case 73/85 Kerrutt [1986] ECR 2219, which the Commission cited, are not therefore directly relevant, because they concerned cases where a Member State had reintroduced exemptions that had applied previously.