The provisions of paragraphs I and II of Article 257 ter of the General Tax Code (CGI), established by Article 44 of Law No. 2020-1721 of December 29, 2020, the Finance Law for 2021, incorporate into French tax legislation the principles outlined by the Court of Justice of the European Union (CJEU) for determining the treatment, in terms of value-added tax (VAT), of commercial offers comprised of multiple elements that could individually fall under different territoriality rules, exemptions, or rates (referred to as “composite” or “complex” offers).
Thus, in principle, each taxable operation for VAT is considered distinct and independent, following its own specific regime determined by its main element or elements other than accessories, particularly concerning classification (supply of goods or provision of services, with classification being essential for assessing territoriality) and eligibility for an exemption or reduced rate.
However, elements that are so closely linked that they form, objectively, an indivisible single economic supply, for which decomposition would be artificial, are treated as a single operation. In such cases, the operation must receive a unified tax treatment, without the possibility of allocating different elements to different rules. In this context, a reduced rate or an exemption that does not grant the right to deduction will be disregarded if at least one of the non-accessory elements is ineligible, even if it is not the majority. Furthermore, if multiple rates are applicable, Article 278-0 of the CGI derived from Article 44 of Law No. 2020-1721 of December 29, 2020, the Finance Law for 2021, specifies that the highest rate is applied.
Thus, a new subsection dedicated to the treatment of composite offers is created within the classification plan, providing rules to determine whether such an offer should be considered a single operation or broken down into distinct operations.
This subsection includes four documents and an appendix:
– BOI-TVA-CHAMP-60-10 outlines the principles and definitions applicable to composite offers and clarifies their relationship with other concepts.
– BOI-TVA-CHAMP-60-20 specifies the analysis method to determine if, in a particular case, different goods or services should be grouped within a single operation, either due to some being accessories or because they are closely linked from an economic perspective.
– BOI-TVA-CHAMP-60-30 explains how to identify the correct VAT regime when an operation includes elements subject to different rules.
– BOI-TVA-CHAMP-60-40 presents certain specific cases where the analysis of composite offers presents particular challenges.
– BOI-ANNX-000503 provides a summary of relevant CJEU judgments and orders, categorized by the tax question posed (classification, exemption, or reduced rate) and by sector of activity.
2/ Additionally, doctrinal comments specific to certain sectors of activity are updated for coherence (treatment of household waste; exhibitions, sites, installations, and devices of a cultural, recreational, educational, or professional nature; television service subscriptions; insurance; banking and financial services; packaging).
3/ Finally, the new doctrinal clarifications regarding composite offers are also relevant for establishing the taxable base for the tax on certain digital services provided in Article 299 of the CGI, some of which receipts could be excluded based on the criteria of the unique complex operation developed for VAT purposes (BOI-TCA-TSN-20).
The following BOI documents are subject to public consultation from August 23, 2023, to January 31, 2024, inclusive, to allow interested parties to submit their possible comments to the administration. These comments must be sent via email to [email protected]. Only signed contributions will be considered. From the present publication, you can rely on these comments until their potential revision following the consultation.
Source: gouv.fr
