Opinion on excluding services by legal aid offices from value added tax

Government Communications Unit
Press release 210/2009

6.7.2009

Ruiz-Jarabo Colomer, Advocate General at the Court of Justice of the European Communities, will issue his Opinion on the Commission’s suit against Finland on Tuesday 7 July. In its action, the Commission states that Finland has breached Community law by excluding from the scope of value added tax those legal aid services that are provided in return for a partial contribution by state legal aid offices, although corresponding services provided by private attorneys fall within the scope of VAT. According to the Commission, this is contrary to the Sixth Value Added Tax Directive (77/338/EEC).

According to the Commission, legal aid offices pursue economic activities referred to in the Sixth Value Added Tax Directive as regards legal aid matters to be heard by a court of law for which the recipient of the service pays a partial contribution. It is considered by the Commission that the state legal aid offices do not serve as public authorities in such circumstances, and thus, under the Directive, VAT exemption is not permissible. The Commission argues that different treatment in relation to private attorney services gives rise to significant distortions of competition.

The Government of Finland has contested the action brought by the Commission and has considered that legal aid services provided against a partial contribution in accordance with the Directive should not be subject to value added tax. Finland argued that the legal aid provided by legal aid offices constitutes an indivisible whole which does not fall within the scope of economic activities subject to VAT as referred to in the Directive. In addition, Finland considered that legal aid offices engage in these activities as public authorities, and such activities are not subject to VAT under the Directive. It was further considered that the Commission has not proved its claim regarding significant distortions of competition.

The Advocate General gives a reasoned Opinion on the correct interpretation of Community law. He acts in complete independence, and his Opinion is not binding on the Court of Justice of the European Communities. The judgment of the Court of Justice will be delivered at a date to be determined at a later stage.

Opinions by the Advocate General can be viewed on the Court of Justice website. Opinions will usually be accessible on the website during the afternoon of the date of delivery. The case number is C-246/08.

Further information: Alice Guimaraes-Purokoski, Head of Unit, Ministry for Foreign Affairs, tel. +358 9 1605 5714