- Case C-516/21 (Finanzamt X) deals with the application of the principle that ancillary supplies must be subject to the same VAT regime as the main supply, specifically in the context of Article 135 of the VAT Directive.
- The determination of whether several related supplies should be treated as one comprehensive supply depends on all the circumstances in which the supply took place.
- As a general principle, every supply must typically be regarded as distinct and independent for VAT purposes.
- However, in certain circumstances, several formally distinct services must be considered a single supply when they are not independent.
- There are two different reasons to treat a combination of transactions as a single supply for VAT purposes: one or more supplies constitute a principal supply, and the other supply or supplies constitute one or more ancillary supplies, which share the tax treatment of the principal supply; or two or more elements or acts supplied by the taxable person to the customer are so closely linked that they form, objectively, from an economic point of view, a single, indivisible economic supply.
- The application of such principles may come into play in different situations, such as those involving different VAT rates, rules on the place of supply, or exemptions. Case C-516/21 (Finanzamt X) deals with a situation where the application of exemptions is at stake, specifically in relation to leased turkey-rearing sheds with permanently installed equipment and machinery.
Source Kluwertaxblog
See also
- Summary of ECJ C-516/21: The letting of permanently installed equipment and machinery if ancillary to the leasing a building (under the same leasing agreement) are exempt from VAT
- C-516/21 (Finanzamt X) – Judgment – Exemption for Leasing of immovable property including equipment and machinery
- Roadtrip through ECJ Cases – Focus on ”Exemption – The ”leasing or letting of immovable property” (Art. 135(1)(l))
