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TMI Blog2010 (3) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of proceedings between Erotic Center BVBA ('E. Center') and the Belgische Staat (Belgian State) concerning the possible application of a reduced rate of value added tax ('VAT') on the amounts received by E. Center for the use of individual cubicles for watching films located on the premises of that company. Legal context European Union legislation 3. Article 12(3)(a) of the Sixth Directive provides: 'The standard rate of [VAT] shall be fixed by each Member State as a percentage of the taxable amount and shall be the same for the supply of goods and for the supply of services. Member States may also apply either one or two reduced rates. These rates shall be fixed as a percentage of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application of the provisions relating to VAT for the period from 1 January until 30 June 2004. Following that audit, those authorities drew up an official report on 9 November 2004 imposing a revised tax assessment and fine on E. Center on the ground that it had incorrectly applied the reduced rate of VAT of 6%, instead of the standard rate of 21%, to the income received from the provision of cubicles for watching films. The amounts of EUR 48 454.36 and EUR 4 840 were thus charged to E. Center, corresponding respectively to the VAT which was thus allegedly evaded and to a fine. 8. After a writ of execution for those amounts had been served on E. Center on 24 December 2004, the latter lodged an application dated 22 March 2005 with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, which has paid for admission in advance. 11. The referring court argues that, by adopting Heading XXVIII of Table A in the annex to Royal Decree No 20, the Belgian legislator made use of the possibility envisaged by Article 12(3)(a) of the Sixth Directive in conjunction with Category 7 in Annex H thereto, with the result that Heading XXVIII must be interpreted as covering cinemas within the meaning of Category 7. That court considers that the need to interpret the national legislation in a way which is consistent with the Sixth Directive and with the uniform concepts specific thereto implies that, if the cubicles at issue must be considered to be cinemas within the meaning of that directive, they cannot be classified as automated r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17). 15. In that regard, and as has previously been noted by the Court, it follows from Article 12(3)(a) of the Sixth Directive that the application of either one or two reduced rates of VAT is an option accorded to the Member States as an exception to the principle that the standard rate applies. Moreover, according to that provision, the reduced rates of VAT may be applied only to supplies of the goods and services specified in Annex H to that directive. It is settled case-law that provisions which are in the nature of exceptions to a principle must be interpreted strictly (see, inter alia, Kingdom of Spain (supra), paragraphs 18 and 19 and the case-law cited). 16. It follows in particular that the concept of admissions to a cinema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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