ECJ VAT C-410/24 (Blapp) – Questions – VAT rate applicable on Ancillary Supplies

The ECJ issued the preliminary ruling in the case C-410/24 (Blapp).

Context:

Articles in the EU VAT Directive

Article 2
1. The following transactions shall be subject to VAT:
(c) The supply of services for consideration within the territory of a Member State by a taxable person acting as such;

Article 24
1. ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.

Article 98
2. Member States may apply either one or two reduced rates.

3. The reduced rates shall only apply to the supply of goods and services in the categories set out in Annex III. The reduced rates shall not apply to electronically supplied services.
4. When applying the reduced rates provided for in paragraph 1 to categories of goods, Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.

Annex III:
List of supplies of goods and services to which the reduced rates referred to in Article 98 may be applied

12. accommodation provided in hotels and similar establishments, including the provision of holiday accommodation and the letting of places on camping or caravan sites;

Facts & Background

The question at hand is whether Article 24(1) and Article 98(1) and (2) of Directive 2006/112/EC, read in conjunction with Category 12 of Annex III, prohibit a national provision such as the second sentence of Paragraph 12(2)(11) of the Umsatzsteuergesetz (Law on Turnover Tax), which allows a Member State to exclude supplies from the reduced tax rate for the short-term provision of accommodation, if those supplies do not directly serve the letting purpose but are remunerated by the consideration for such letting.
Specifically, the question pertains to supplies that are dependent supplies ancillary to the short-term provision of accommodation, such as the supply of breakfast in this case.
The Hesse Finance Court ruled that the breakfast supplies provided by the applicant were subject to the standard tax rate rather than the reduced rate, as the reduced rate only applies to pure letting or accommodation supplies.
The breakdown requirement in the second sentence of Paragraph 12(2)(11) supersedes the principle that a dependent ancillary supply shares the tax treatment of the principal supply.
The applicant argues that this breakdown requirement is impermissible based on the Court’s judgment in Stadion Amsterdam, which stated that a single supply should be subject to a single tax rate based on the principal supply.
The Tax Office counters that the Court’s judgment in Finanzamt X does not apply to a national breakdown requirement. The outcome of this case is pending.

Questions

Are Article 24(1) and Article 98(1) and (2) of Directive 2006/112/EC, read in conjunction with Category 12 of Annex III thereto, to be interpreted as meaning that they preclude a national provision such as the second sentence of Paragraph 12(2)(11) of the Umsatzsteuergesetz (Law on Turnover Tax; ‘the UStG’), under which a Member State may exclude, by means of a national requirement to break down transactions for tax purposes, supplies from the
reduced tax rate provided for by the Member State for the letting of living and sleeping spaces offered by a trader for the short-term provision of accommodation to strangers, which supplies do not directly serve the letting purpose but are remunerated by the consideration for such letting, even if those supplies are dependent supplies ancillary to the short-term provision of accommodation to strangers, such as the supply of breakfast as in this case

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