- The German taxpayer, referred to as Y, operates a plant producing biogas from biomass for electricity and heat.
- Most electricity is sold to the grid operator, while heat is partly reused in Y’s production and partly supplied free to Company A and Company B.
- Contracts with A and B did not specify a price.
- Y was assessed on a cost basis for not charging A or B, as it was considered disposal of goods free of charge.
- The case raises the question of whether the disposal of goods free of charge should be subject to VAT, as per Article 16 of the VAT Directive.
- The Court noted that the objective of Article 16 is to ensure equal treatment between taxable persons and final consumers, and that disposal free of charge should be subject to subsequent taxation, with only small gifts and samples being exceptions.
Source KPMG
See also
- C-207/23 (Finanzamt X) – Judgment – Wood drying and heating as VAT base
- Roadtrip through ECJ Cases – Focus on ”Free Products” (Art. 16)
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
