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TMI Blog2005 (10) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... text 3. Article 2 of the Sixth Directive provides: 'The following shall be subject to [VAT]: 1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such; 2. the importation of goods.' 4. Under Article 5(1) of the Sixth Directive, '"[s]upply of goods" shall mean the transfer of the right to dispose of tangible property as owner'. 5. According to Article 6(1) of that directive: "Supply of services" shall mean any transaction which does not constitute a supply of goods within the meaning of Article 5. 6. Article 9 of the Sixth Directive states: '1. The place where a service is supplied shall be deemed to be the place where the supplier has established his business or has a fixed establishment from which the service is supplied ... 2. However: (e) the place where the following services are supplied when performed for customers established outside the Community or for taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment to which the servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce test between the parties. 12. The customisation of the basic software, its installation and the agreed training took place between 1997 and 1999. 13. Levob did not state the amounts paid for the basic software in its VAT declarations. On 25 January 2000, it asked the tax authorities to issue notices of assessment a posteriori with regard to the amounts paid in respect of the customisation of that software, its installation and the training given by FDP. 14. Taking the view that the service supplied by FDP consisted in a single supply relating to the customised software, those authorities issued notices of assessment in respect of all the payments made by Levob under the contract. 15. Since the action brought by Levob before the Gerechtshof te Amsterdam was dismissed by a judgment of 31 December 2001, Levob brought an appeal in cassation against that judgment before the referring court. In support of its appeal Levob complains, inter alia, that the Gerechtshof te Amsterdam found that the supply of the basic software and its customisation constituted a single taxable transaction and that, furthermore, it classified that transaction as a 'supply of services'. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market and recorded on a carrier by the supplier and the subsequent customisation thereof by the supplier to the purchaser's requirements, in consideration of the payment of separate prices, in circumstances such as those at issue in the main proceedings, are to be regarded as two distinct supplies or as one single supply and, in the latter case, whether that single supply is to be classified as a supply of services. 18. As a preliminary point, it must be borne in mind that the question of the extent of a transaction is of particular importance, for VAT purposes, both for identifying the place where the taxable transactions take place and for applying the rate of tax or, where appropriate, the exemption provisions in the Sixth Directive (Case C-349/96 CPP Card Protection Plan Ltd. v. Commissioner of Customs Excise [1999] ECR I-973/[2012] 22 taxmann.com 176 paragraph 27). 19. According to the Court's case-law, where a transaction comprises a bundle of features and acts, regard must be had to all the circumstances in which the transaction in question takes place in order to determine, firstly, if there were two or more distinct supplies or one single supply and, secondly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly customised to that consumer's requirements. In that regard, and as the Netherlands Government has correctly pointed out, it is not possible, without entering the realms of the artificial, to take the view that such a consumer has purchased, from the same supplier, first, pre-existing software which, as it stood, was nevertheless of no use for the purposes of its economic activity, and only subsequently the customisation, which alone made that software useful to it. 25. The fact, highlighted in the question, that separate prices were contractually stipulated for the supply of the basic software, on the one hand, and for its customisation, on the other, is not of itself decisive. Such a fact cannot affect the objective close link which has just been shown with regard to that supply and that customisation nor the fact that they form part of a single economic transaction (see, to that effect, CPP, paragraph 31). 26. It follows that Article 2 of the Sixth Directive must be interpreted as meaning that such supply and such subsequent customisation of software are, in principle, to be regarded as forming a single supply for VAT purposes. 27. Secondly, with regard to the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32. In that regard, Article 9 of the Sixth Directive contains rules for determining the place where services are deemed to be supplied for tax purposes. Whereas Article 9(1) lays down a general rule on the matter, Article 9(2) sets out a number of specific instances of places where certain services are deemed to be supplied. The object of those provisions is to avoid, first, conflicts of jurisdiction which may result in double taxation, and, secondly, non-taxation (see inter alia Case C-452/03 RAL (Channel Islands) [2005] ECR I-0000, paragraph 23 and case-law cited). 33. In respect of the relationship between the first two paragraphs of Article 9 of the Sixth Directive, the Court has already held that Article 9(1) in no way takes precedence over Article 9(2). In every situation, the question which arises is whether it is covered by one of the instances mentioned in Article 9(2); if not, it falls within the scope of Article 9(1) (RAL (Channel Islands) (supra), paragraph 24 and case-law cited). 34. To that extent, the argument that Article 9(2)(e) of the Sixth Directive should, as an exception to a rule, be narrowly construed must be rejected (Case C108/00 SPI [2001] ECR I-2361, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (b) performed for a taxable person established in the Community but not in the same country as the supplier. Question 2 42. The second question was referred only in case Question 1(a) should be answered in the negative. In the light of the affirmative answer given to that question, there is no need to consider the second question. Costs 43. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (First Chamber) hereby rules: 1. Article 2(1) 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 must be interpreted as meaning that where two or more elements or acts supplied by a taxable person to a customer, being a typical consumer, are so closely linked that they form objectively, from an economic point of view, a whole transaction, which it would be artificial to split, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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