On 13 March 2019, the European Court of Justice gave its decision in case C‑647/17 (Srf konsulterna AB).
The case concerns the question how ‘training events’should be qualified for VAT: as generic services, or as admission to educational events?
Srf konsulterna AB is a company established in Sweden that is wholly owned by a professional association for accounting, management and salary consultants. Within that framework, it provides accounting and management training courses in the form of seminars for the members of that association and third parties.
Most of those courses are provided in Sweden, but some take place in other Member States, in which case the trainers of that association travel to the Member State in question. The courses are provided only to taxable persons whose business is established or who have a fixed establishment in Sweden.
The training courses are given at a conference centre and usually last 30 hours, spread over five days, with one day’s break in the middle. The syllabus is decided in advance, but adapted on the spot depending on the participants, who must have certain skills and professional experience in accountancy and management.
Participation in the courses provided by Srf is subject to prior registration, which must be confirmed before the course begins, and payment in advance.
Following a request from Srf, the Swedish Revenue Law Commission ruled that those courses, although provided in Member States other than Sweden, are to be regarded as ‘regular B2B services’, and thus were taking place in Sweden. It considered, inter alia, that the expression ‘admission to events’ in Article 53 of the VAT Directive had been included in order to restrict the scope of exceptions and, correspondingly, to extend that of the general rule. The term ‘admission to events’ should be understood as meaning the right to enter a place.
However, the services at issue in the main proceedings cannot be characterised primarily as the right to enter a place, but rather the right to participate in a specific course. Given that the main objective of the courses at issue in the main proceedings is not to confer a right of admission, within the meaning of Article 53 of the VAT Directive, VAT in respect of such courses chargeable in Sweden under Article 44 of that directive.
The Swedish tax authorities, wishing to obtain confirmation of that ruling as well as additional justification for it, brought proceedings before the Swedish Supreme Administrative Court. Srf also sought confirmation of that ruling, taking the view that the application of the exception provided in Article 53 of the VAT Directive constitutes a disproportionate administrative burden.
In those circumstances, the Supreme Administrative Court decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:
‘Must the expression ‘admission to events’ in Article 53 of the VAT Directive be interpreted as meaning that it covers a service in the form of a five-day course on accountancy which is supplied solely to taxable persons and requires advance registration and payment?’
It is apparent from the information provided by the referring court that the courses at issue in the main proceedings provided by Srf to taxable persons are seminars which take place over five days, with one day’s break, in a Member State other than the Kingdom of Sweden, where the company has established its business. Those courses, which require the physical presence of those taxable persons, are therefore part of the educational events category referred to in Article 32 of the Implementing Regulation.
As regards the question whether the essential characteristics of the courses at issue in the main proceedings consist in granting admission to those courses, it should be noted that, when two or more components or acts supplied by the taxable person are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split, the transaction is a single supply.
The underlying logic of the provisions of the VAT Directive concerning the place where a service is deemed to be supplied is that goods and services should be taxed as far as possible at the place of consumption.
It follows that the place where courses such as those at issue in the main proceedings are deemed to be supplied must be determined on the basis of Article 53 of the VAT Directive, and those courses must, consequently, be subject to VAT in the place where the services are actually supplied, that is in the Member States where those courses are given.
It is true that such an interpretation may, as Srf observes, result in increasing the administrative burden borne by certain traders, even though recital 6 of Directive 2008/8, which inserted Articles 44 and 53 of the VAT Directive in the version currently in force, states that taxation at the place of consumption should, as far as possible, not impose a disproportionate administrative burden upon those traders.
The European Court of Justice rules as follows:
Article 53 of the VAT Directive, as meaning that the expression ‘services in respect of admission to events’ in that provision include a service, such as that at issue in the main proceedings, in the form of a five-day course on accountancy and management which is supplied solely to taxable persons and requires advance registration and payment.