«(Failure of a Member State to fulfil obligations – Sixth VAT Directive – National legislation providing for a reduced rate for musical ensembles and soloists provided the latter organise the concert themselves)»

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Member States' option to apply a reduced rate to certain supplies of goods and services – Application of a reduced rate to supplies by musical ensembles for a concert organiser and the standard rate to supplies by soloists working for an organiser – Not permissible (Council Directive 77/388, Art. 12(3)(a), third subpara.) By applying a reduced rate of value added tax to services provided directly to the public by musical ensembles or for a concert organiser and to services provided directly to the public by soloists, but applying the standard rate of that tax to the services of soloists working for an organiser, a Member State fails to fulfil its obligations under the third subparagraph of Article 12(3)(a) of the Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.In exercising the power to charge a lower rate, the Member States must respect the principle of fiscal neutrality which precludes in particular treating similar goods and supplies of services, which are thus in competition with each other, differently for VAT purposes, so that those goods or supplies must be subjected to a uniform rate.see paras 19-20, 28, operative part

JUDGMENT OF THE COURT (Fifth Chamber) 23 October 2003 (1)

((Failure of a Member State to fulfil obligations – Sixth VAT Directive – National legislation providing for a reduced rate for musical ensembles and soloists provided the latter organise the concert themselves))

In Case C-109/02,

applicant,

v

defendant,

APPLICATION for a declaration that, by applying a reduced rate of value added tax to services provided directly to the public by musical ensembles or for a concert organiser and to services provided directly to the public by soloists, but applying the standard rate of that tax to the services of soloists working for an organiser, the Federal Republic of Germany has failed to fulfil its obligations under the third subparagraph of Article 12(3)(a) of the 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 (OJ 1977 L 145, p. 1), as amended by Council Directive 1999/49/EC of 25 May 1999 amending, with regard to the level of the standard rate, Directive 77/388 (OJ 1999 L 139, p. 27),

THE COURT (Fifth Chamber),,

composed of: D.A.O. Edward, acting as President of the Fifth Chamber, A. La Pergola and P. Jann (Rapporteur), Judges,

Advocate General: J. Mischo,

having regard to the report of the Judge-Rapporteur,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Community rules

National rules

Arguments of the parties

Findings of the Court

On those grounds,

THE COURT (Fifth Chamber)

hereby:

Edward

La Pergola

Jann

Delivered in open court in Luxembourg on 23 October 2003.

R. Grass

V. Skouris

Registrar

President