Last review: October 1, 2023
European VAT legislation has 4 taxable transactions as mentioned in below art. 2 of the EU VAT Directive 2006/112/EC, see below.
For 3 of these transactions, ”consideration” is a condition. But what is ”consideration”? It can be expressed in ”monetary” but also in other cases as e.g. a barter deal, …
Article in the EU VAT Directive 2006/112/EC
Article 2
1. The following transactions shall be subject to VAT:
(a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;
(b) the intra-Community acquisition of goods for consideration within the territory of a Member State by:
(i) a taxable person acting as such, or a non-taxable legal person, where the vendor is a taxable person acting as such who is not eligible for the exemption for small enterprises provided for in Articles 282 to 292 and who is not covered by Articles 33 or 36;
(ii) in the case of new means of transport, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1), or any other non-taxable person;
(iii) in the case of products subject to excise duty, where the excise duty on the intra-Community acquisition is chargeable, pursuant to Directive 92/12/EEC, within the territory of the Member State, a taxable person, or a non-taxable legal person, whose other acquisitions are not subject to VAT pursuant to Article 3(1);
(c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;
ECJ Cases decided
- C-102/86 (Apple and Pear Development Council) – Compulsory payments, even in kind, cannot be easily considered as giving rise to onerous transactions
- C-16/93 (R. J. Tolsma) – A service is only provided “for consideration” if there is a legal relationship between the provider and the recipient of the service
- C-283/12 (Serebryannay vek) – Barter deal: Services supplied for free in return for not paying rent
- C-410/17 (A Oy) -Barter deal – Nature and valuation of the supplies
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