(Reference for a preliminary ruling– Value added tax (VAT)– Directive 2006/112

European Union law

The VAT Directive

3According to recital4 of the VAT Directive:

‘The attainment of the objective of establishing an internal market presupposes the application in Member States of legislation on turnover taxes that does not distort conditions of competition or hinder the free movement of goods and services. It is therefore necessary to achieve such harmonisation of legislation on turnover taxes by means of a system of [VAT], such as will eliminate, as far as possible, factors which may distort conditions of competition, whether at national or Community level.’

4Recital7 of that directive is worded as follows:

‘The common system of VAT should, even if rates and exemptions are not fully harmonised, result in neutrality in competition, such that within the territory of each Member State similar goods and services bear the same tax burden, whatever the length of the production and distribution chain.’

5Article96 of that directive provides:

‘Member States shall apply a standard rate of VAT, which shall be fixed by each Member State as a percentage of the taxable amount and which shall be the same for the supply of goods and for the supply of services.’

6Article98 of the VAT Directive provides:

‘1.Member States may apply either one or two reduced rates.

2.The reduced rates shall apply only to supplies of goods or services in the categories set out in AnnexIII.

…

3.When applying the reduced rates provided for in paragraph1 to categories of goods, Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.’

7AnnexIII to that directive, which sets out the list of supplies of goods and services to which the reduced rates referred to in Article98 thereof may be applied, does not include a category of goods ‘wood for use as firewood’.

8Articles109 to 122 of that directive lay down the conditions under which Member States may apply reduced rates of VAT, until such time as the definitive arrangements have been adopted.

9Article122 of that directive states:

‘Member States may apply a reduced rate to the supply of… wood for use as firewood.’

The CN

10The Combined Nomenclature (‘the CN’) is set out in AnnexI to Council Regulation (EEC) No2658/87 of 23July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L256, p.1), as amended by Commission Implementing Regulation (EU) No1101/2014 of 16October 2014 (OJ 2014 L312, p.1).

11It includes, inter alia, the following tariff headings:

German law

12Paragraph12 of the Umsatzsteuergesetz (Law on Turnover Tax) provides:

‘(1)The rate of tax shall be 19% of the taxable amount in respect of every taxable transaction (Paragraphs10 and 11, Paragraph25(3) and Paragraph25a(3) and (4)).

(2)The rate of tax shall be reduced to 7% in respect of the following transactions:

1.supplies, imports and intra-community acquisitions of the goods described in Annex2 save for those goods referred to in point49(f) and points53 and 54;

…’

13Point48 of Annex2 to that law is worded as follows: