Case C-32/03

I/S Fini H

v

Skatteministeriet

(Reference for a preliminary ruling from the Højesteret)

(Sixth VAT Directive – Status of taxable person – Right to deduct – Winding up – Direct and immediate link – Transactions forming part of the economic activity as a whole)

Opinion of Advocate General Jacobs delivered on 28 October 2004

Judgment of the Court (Third Chamber), 3 March 2005

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Economic activities within the meaning of Article 4 of the Sixth Directive – Taxable person – Meaning – Person having ceased an economic activity but continuing to pay rent and charges relating to premises previously used for that activity owing to the impossibility of surrendering the lease – Included – Benefit of a right to a deduction – Conditions

(Council Directive 77/388, Art. 4 (1) to (3))

Article 4(1) to (3) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes is to be interpreted as meaning that a person who has ceased an economic activity but who, because the lease contains a non-termination clause, continues to pay the rent and the charges on the premises used for that activity, is to be regarded as a taxable person within the meaning of that article and is entitled to deduct the value added tax on the amounts thus paid, provided that there is a direct and immediate link between the payments made and the economic activity and that the absence of any fraudulent or abusive intent has been established.

Transactions such as the payments which a person continues to make during the period over which their business was wound up must be regarded as forming part of the economic activity within the meaning of Article 4 of the Sixth Directive. Moreover, there is a direct and immediate link between the obligation to continue to pay the rent and other charges after the economic activity has ceased and the carrying on of that activity, since the lease was entered into in order to have the premises available which were necessary for carrying on that activity, which was actually carried on there. The duration of the obligation to pay the rent and the charges on those premises has, in that respect, no bearing, provided that that period of time is strictly necessary to complete the winding-up of the business.

(see paras. 24, 26, 28-29, 35, operative part)

JUDGMENT OF THE COURT (Third Chamber) 3 March 2005 (1)

(Sixth VAT Directive – Status of taxable person – Right to deduct – Winding up – Direct and immediate link – Transactions forming part of the economic activity as a whole)

In Case C-32/03,REFERENCE for a preliminary ruling under Article 234 EC from the Højesteret (Denmark), made by decision of 22 January 2003, received at the Court on 28 January 2003, in the proceedings

v

THE COURT (Third Chamber),,

composed of A. Rosas, President of the Chamber, A. Borg Barthet, J.-P. Puissochet, J. Malenovský and U. Lõhmus (Rapporteur), Judges,

Advocate General: F.G. Jacobs,

having regard to the written procedure and further to the hearing on 15 September 2004,after considering the observations submitted on behalf of:

after hearing the Opinion of the Advocate General at the sitting on 28 October 2004,

gives the following

‘1.

2.

3.…’

‘In so far as the goods and services are used for the purposes of his taxable transactions, the taxable person shall be entitled to deduct from the tax which he is liable to pay:

…’

‘Taxable person shall mean any natural or legal person who independently carries on an economic activity.’

On those grounds, the Court (Third Chamber) rules as follows:

[Signatures]