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Roadtrip through ECJ Cases – Focus on ”Composite supplies”

Issue

  • One single supply or multiple supplies?
  • A supply of goods or a supply or services?
  • How to qualify the supply of goods or services?

Impact on VAT assessment

  • Place of supply of goods or services
  • Exempt or taxed
  • Applicable VAT rate
  • Invoicing

Impact on Fixed Establishment

  • Impact on Fixed Establishment: When goods and services are bundled, the establishment may no longer be able to carry out the supply on an independent basis.

Guidelines found in ECJ Cases

  • Check whether or not it is really possible to distinguish the various components of a supply
  • A supply of services prevailing over a supply of goods, which in turn is inseparably linked to the service (or vice versa)
  • Then, the whole operation is conclusively treated as a single supply
  • Important:
    • Perception of the customers/consumers
    • External evidence as the identification of separate items in the contract or other documents associated with the transaction
  • Every performance should in principle be considered to be a distinct and independent performance
  • However, a performance should not be artificially split up into multiple performances
  • A set of multiple performances should be considered to be one single performance when one or more elements are considered to be the principal performance, while other elements are ancillary to the principal performance
  • A performance should be considered to be ancillary if it does not constitute a goal in itself for a customer, but rather should be considered to be a; way to make the principle performance more attractive/ i.e. not an aim in itself, but a means of better enjoying the principal supply
  • This should be assessed from a consumer’s perspective/customer’s intention
  • A set of performances should be considered to be one performance when two or more elements are so closely tied that they constitute one single performance from an economic perspective/economic reality
  • Separate contracts that were not inextricably linked to one another
  • Separate terms and prices/items recharged at cost

Examples

  • Two different products sold in one package
  • Conference/seminars
  • Leasing vehicle: car + leasing
  • Supply of goods with transport
  • Advertising and rebates

ECJ Cases

  • Extensive case law by ECJ
  • However, ECJ only provides guidelines
  • Still much uncertainty because facts and circumstances not always correspond
  • National courts need to apply the guidelines to the facts of the case
  • National court may have a different interpretation
  • Leads to a fragmented approach in the EU Member States

ECJ Cases Decided


Pending ECJ Cases 

  • None

Thesis

Articles


  • Join the Linkedin Group on ECJ VAT Cases, click HERE
  • For an overview of ECJ cases per article of the EU VAT Directive, click HERE

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