Taxpayer Y produces electricity and heat in cogeneration, selling the electricity on the market (VAT-taxable). Y used some of the heat in its production process and transferred the rest free of charge to 2 entrepreneurs. They used the heat for their business activities. The Court reasoned that the free transfer of goods is subject to VAT, regardless of the recipient’s use. The taxable amount should be based on VAT-deductible costs and should include both direct and indirect costs.
Source Pawel Mikula
See also
- C-207/23 (Finanzamt X) – Judgment – Wood drying and heating as VAT base
- Roadtrip through ECJ Cases – Focus on ”Free Products” (Art. 16)
