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Interpretation in Conformity with EU Law - the Case of the Financial Service Exemption in the Swedish VAT Act

Khalil, Omar LU (2015) JURM02 20151
Department of Law
Abstract (Swedish)
Mervärdeskatterätten utgör ett fullständigt harmoniserat område inom EU och medlemsstaternas lagstiftning på området är till sin helhet baserad på EU rätten. En uniform tillämpning av momsreglerna i medlemsstaterna är av stor vikt för mervärdesskattesystemets funktion. Skyldigheten att tolka nationell lag i enlighet med EU rätten är därför ett viktigt instrument för att säkerställa en uniform tillämning samt att EU rätten får avsedd effekt i varje medlemsstat.

På mervärdesskatteområdet har undantagen från mervärdesskatt varit föremål för mycket diskussion i och med deras införande i Sjätte mervärdesskattedirektivet, i synnerhet undantaget för finansiella tjänster. Undantagets omfattning och tillämpning har framstått som oklar och... (More)
Mervärdeskatterätten utgör ett fullständigt harmoniserat område inom EU och medlemsstaternas lagstiftning på området är till sin helhet baserad på EU rätten. En uniform tillämpning av momsreglerna i medlemsstaterna är av stor vikt för mervärdesskattesystemets funktion. Skyldigheten att tolka nationell lag i enlighet med EU rätten är därför ett viktigt instrument för att säkerställa en uniform tillämning samt att EU rätten får avsedd effekt i varje medlemsstat.

På mervärdesskatteområdet har undantagen från mervärdesskatt varit föremål för mycket diskussion i och med deras införande i Sjätte mervärdesskattedirektivet, i synnerhet undantaget för finansiella tjänster. Undantagets omfattning och tillämpning har framstått som oklar och EU-domstolen har i flera fall ställts inför frågor rörande tolkningen av detta undantag. Denna oklarhet har inverkat på den uniforma tillämpningen av undantaget inom EU:s medlemsstater. Att tolka undantaget för finansiella tjänster EU konformt är således av stor vikt för att säkerställa en likartad tillämpning inom hela EU. Skyldigheten att tolka nationell rätt EU konformt är absolut och begränsas endast i exceptionella fall. De nationella domstolarna kan inte bortse från denna skyldighet i tolkningen och tillämpningen av den nationella lagstiftningen.

Denna framställnings syfte är att analysera konceptet EU konform tolkning rörande undantaget för finansiella tjänster ur ett svenskt perspektiv och huruvida Sverige uppfyller skyldigheten att tolka lagstiftningen EU konformt rörande motsvarande undantagsregel i ML. För att uppnå syftet med framställningen tar den sin utgångspunkt i fastställandet av EU rätten, vilket innebär en genomgång av hur undantaget för finansiella tjänster i artikel 135.1 b-g i mervärdesskattedirektivet har tolkats av EU-domstolen. Därefter följer en likartad genomgång av 3:9 i ML och hur denna bestämmelse har tolkats av HFD. I framställningen belyses den effekt som tolkningen av undantaget i direktivet har haft på tolkningen av den svenska bestämmelsen samt i vilken mån skyldigheten att tolka EU konformt begränsas.

Det kan konstateras att EU-domstolen inte har varit benägen att tillämpa den generella principen om restriktiv tolkning av undantag och valt att tolka undantaget för finansiella tjänster mycket extensivt. Den svenska tolkningen av undantaget kan anses vara EU konform i den meningen att HFD:s tolkning följer EU-domstolens praxis. Det framstår också som klart att den svenska tolkningen till stor del har influerats av motsvarande tolkning av EU domstolen rörande direktivet. Sveriges inträde i EU har förändrat HFD:s tolkning av undantaget till att vara betydligt mer extensiv i enlighet med hur undantaget har tolkats av EU-domstolen. Vidare gäller att effekten av den genomharmoniserade karaktären hos mervärdesskatteområdet får särskilt stor betydelse i förhållande till begräsningen av skyldigheten att tolka EU konformt. Så länge EU-domstolens tolkning inte strider mot fördragen är skyldigheten att tolka EU konformt ej begränsad för nationella domstolar. (Less)
Abstract
The area of VAT constitutes a completely harmonized area within the EU and the national provisions in this area are to their entirety based on EU law. A uniform application of the VAT provisions throughout the EU therefore becomes essential in order to ensure the proper function of the VAT system. The obligation for national courts to interpret national law in conformity with EU law becomes an important tool to ensure the uniform application and the effectiveness of EU law in every Member state. The obligation to interpret national law in conformity with EU law is absolute and can only be limited under exceptional circumstances. National courts always need to observe this obligation when interpreting provisions of national law.

In the... (More)
The area of VAT constitutes a completely harmonized area within the EU and the national provisions in this area are to their entirety based on EU law. A uniform application of the VAT provisions throughout the EU therefore becomes essential in order to ensure the proper function of the VAT system. The obligation for national courts to interpret national law in conformity with EU law becomes an important tool to ensure the uniform application and the effectiveness of EU law in every Member state. The obligation to interpret national law in conformity with EU law is absolute and can only be limited under exceptional circumstances. National courts always need to observe this obligation when interpreting provisions of national law.

In the area of VAT, the matter of exemptions has been subject to many discussions ever since they were introduced in the Sixth directive, especially the exemption regarding financial services. The uncertainty of the interpretation and application of the exemption has been the subject to many questions posed to the ECJ to clarify. This uncertainty has in turn affected the uniform application of the exemption throughout the EU.

The objective of this thesis is to examine the concept of consistent interpretation regarding the financial service exemption in VAT and to examine if the Swedish interpretation of this exemption is in conformity with EU law. In order to achieve its objective, the thesis commences by examining the interpretation of the financial service exemption stated in article 135(1)(b)-(g) in the VAT directive. This implies an analysis of the ECJ case law. The thesis continues by examining the interpretation of the corresponding exemption provision in chapter 3 paragraph 9 in the Swedish VAT Act and its interpretation by the HFD. The thesis highlights the influence the interpretation of article 135(1)(b)-(g) has had on the interpretation of chapter 3 paragraph 9 of the VAT Act and what limits the obligation to interpret national law in conformity with EU law.

The thesis finds that the ECJ has been inclined to interpret the financial service exemption extensively and not according to the general principle of strict interpretation regarding exemptions. Moreover, the thesis finds that the interpretation of the Swedish exemption provision is in conformity with EU law in the sense that the interpretation of the HFD follows the case law of the ECJ. It is clear that the interpretation of the ECJ greatly influenced the interpretation of the HFD. In addition, the accession of Sweden into the EU has changed the Swedish interpretation of the exemption to be more extensive than before.

Furthermore, since the general principles of EU law limits the obligation of consistent interpretation, the degree of harmonization in the VAT area effects this limitation. Basically, as long as the interpretation of the ECJ does not contradict the treaties and their general principles, the obligation to interpret national law in conformity with EU law is not limited for national courts. (Less)
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author
Khalil, Omar LU
supervisor
organization
course
JURM02 20151
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
financial services, exemptions, consistent interpretation, VAT, EU law, Tax law
language
English
additional info
omar.ib.khalil@gmail.com
19901122-5118
0704937374
13 augusti 2015
id
7756466
date added to LUP
2015-08-31 15:52:57
date last changed
2015-08-31 15:52:57
@misc{7756466,
  abstract     = {The area of VAT constitutes a completely harmonized area within the EU and the national provisions in this area are to their entirety based on EU law. A uniform application of the VAT provisions throughout the EU therefore becomes essential in order to ensure the proper function of the VAT system. The obligation for national courts to interpret national law in conformity with EU law becomes an important tool to ensure the uniform application and the effectiveness of EU law in every Member state. The obligation to interpret national law in conformity with EU law is absolute and can only be limited under exceptional circumstances. National courts always need to observe this obligation when interpreting provisions of national law. 

In the area of VAT, the matter of exemptions has been subject to many discussions ever since they were introduced in the Sixth directive, especially the exemption regarding financial services. The uncertainty of the interpretation and application of the exemption has been the subject to many questions posed to the ECJ to clarify. This uncertainty has in turn affected the uniform application of the exemption throughout the EU. 

The objective of this thesis is to examine the concept of consistent interpretation regarding the financial service exemption in VAT and to examine if the Swedish interpretation of this exemption is in conformity with EU law. In order to achieve its objective, the thesis commences by examining the interpretation of the financial service exemption stated in article 135(1)(b)-(g) in the VAT directive. This implies an analysis of the ECJ case law. The thesis continues by examining the interpretation of the corresponding exemption provision in chapter 3 paragraph 9 in the Swedish VAT Act and its interpretation by the HFD. The thesis highlights the influence the interpretation of article 135(1)(b)-(g) has had on the interpretation of chapter 3 paragraph 9 of the VAT Act and what limits the obligation to interpret national law in conformity with EU law. 

The thesis finds that the ECJ has been inclined to interpret the financial service exemption extensively and not according to the general principle of strict interpretation regarding exemptions. Moreover, the thesis finds that the interpretation of the Swedish exemption provision is in conformity with EU law in the sense that the interpretation of the HFD follows the case law of the ECJ. It is clear that the interpretation of the ECJ greatly influenced the interpretation of the HFD. In addition, the accession of Sweden into the EU has changed the Swedish interpretation of the exemption to be more extensive than before. 

Furthermore, since the general principles of EU law limits the obligation of consistent interpretation, the degree of harmonization in the VAT area effects this limitation. Basically, as long as the interpretation of the ECJ does not contradict the treaties and their general principles, the obligation to interpret national law in conformity with EU law is not limited for national courts.},
  author       = {Khalil, Omar},
  keyword      = {financial services,exemptions,consistent interpretation,VAT,EU law,Tax law},
  language     = {eng},
  note         = {Student Paper},
  title        = {Interpretation in Conformity with EU Law - the Case of the Financial Service Exemption in the Swedish VAT Act},
  year         = {2015},
}