Issue
- One single supply or multiple supplies?
- A supply of goods or a supply or services?
- How to qualify the supply of goods or services?
Impact on VAT assessment
- Place of supply of goods or services
- Exempt or taxed
- Applicable VAT rate
- Invoicing
Impact on Fixed Establishment
- Impact on Fixed Establishment: When goods and services are bundled, the establishment may no longer be able to carry out the supply on an independent basis.
Guidelines found in ECJ Cases
- Check whether or not it is really possible to distinguish the various components of a supply
- A supply of services prevailing over a supply of goods, which in turn is inseparably linked to the service (or vice versa)
- Then, the whole operation is conclusively treated as a single supply
- Important:
- Perception of the customers/consumers
- External evidence as the identification of separate items in the contract or other documents associated with the transaction
- Every performance should in principle be considered to be a distinct and independent performance
- However, a performance should not be artificially split up into multiple performances
- A set of multiple performances should be considered to be one single performance when one or more elements are considered to be the principal performance, while other elements are ancillary to the principal performance
- A performance should be considered to be ancillary if it does not constitute a goal in itself for a customer, but rather should be considered to be a; way to make the principle performance more attractive/ i.e. not an aim in itself, but a means of better enjoying the principal supply
- This should be assessed from a consumer’s perspective/customer’s intention
- A set of performances should be considered to be one performance when two or more elements are so closely tied that they constitute one single performance from an economic perspective/economic reality
- Separate contracts that were not inextricably linked to one another
- Separate terms and prices/items recharged at cost
Examples
- Two different products sold in one package
- Conference/seminars
- Leasing vehicle: car + leasing
- Supply of goods with transport
- Advertising and rebates
ECJ Cases
- Extensive case law by ECJ
- However, ECJ only provides guidelines
- Still much uncertainty because facts and circumstances not always correspond
- National courts need to apply the guidelines to the facts of the case
- National court may have a different interpretation
- Leads to a fragmented approach in the EU Member States
ECJ Cases Decided
- C-73/85 (Kerrutt) – Multiple taxable transactions that cannot be combined into a single transaction must be treated separately for VAT
- C-231/94 (Faaborg-Gelting-Linien A/S): Restaurant transactions on board ship – Place of taxable transactions
- C-308/96 & C-94/97 (Madgett and Baldwin) – A service is ancillary when it is not an end in itself for the customers but a means to make the main service of the provider more attractive
- C-349/96 (Card Protection Plan) – A single transaction or multiple transactions for VAT purposes?
- C-150/99 (Stockholm Lindöpark AB) – No general VAT Exmption for a Membership of a golf club including a wide range of additional services
- C-41/04 (Levob Verzekeringen and OV Bank) – Software is a supply of services if customization is predominal
- C-111/05 (Aktiebolaget NN) – Composite supply – Supply and installation of a fibre-optic cable linking two Member States
- C-251/05 (Talacre Beach Caravan Sales Ltd) – A single supply allows levying VAT at the standard rate also on the supply ”VAT exempted” goods
- C-425/06 (Part Service) – Composite Supplies – Abuse of rights in case leasing contracts are split
- C-88/09 (Graphic Procédé) – Reprographics activities can either be classified as supply of goods or services
- C-276/09 (Everything Everywhere) – Additional fees charged when using certain methods of payment for mobile telephony services
- C-497/09 (Bog & Others) (Joined case with C-499/09, C-501/09, C-502/09) – Composite supplies – VAT treatment of foods supplied for immediate consumption
- C-44/11 (Deutsche Bank) – No Exemption for transactions relating to the management of securities-based assets (portfolio management))
- C-117/11 (Purple Parking and Airparks Services) – Parking service combined with passenger transport from car park to airport is a single composite service
- C-224/11 – (BGŻ Leasing sp. z o.o) – Leasing services supplied together with insurance for the leased item
- C-395/11 (BLV Wohn- und Gewerbebau GmbH) – The term “construction work” includes not only services but also supplies of goods
- C-42/14 (Wojskowa Agencja Mieszkaniowa) – Letting of immovable property and the provision of water, electricity and heating must be regarded as constituting several distinct and independent supplies
- C-208/15 (Stock ’94) – Supply of goods and a grant of a loan constitutes a single transaction
- C-432/15 (Pavlína Baštová) – Prize money is not a Taxable Transaction for VAT purposes
- C-463/16 (Stadion Amsterdam) – Principal element determines the VAT rate for the Composite Supply of services
- C-231/19 (BlackRock Investment Management (UK) Ltd) – Judgment – VAT treatment of management services outside scope of the exemption
- C-581/19 (Frenetikexito) – Nutritional advice within the fitness center is an independent VAT service, not exempted from VAT
- C-282/22 (Dyrektor Krajowej lnformacji Skarbowej) – Electricty and services supplied at charging stations are a single/complex supply
- C-505/22 (Deco Proteste – Editores, Lda) – Judgment – A gift for a subscription is not a free transfer of goods and is ”incidental service” to the main supply
Pending ECJ Cases
Thesis
Articles
