EGC C-903/25 (Grotta Nuova) – Questions – VAT Classification of Artistic Supplies

The General Court issued the preliminary ruling request in the case T-903/25 (Grotta Nuova)

Articles in the EU VAT Directive 2006/112/EC

Article 2: This article outlines the scope of the VAT system, specifying what constitutes taxable supplies of goods and services.
- Article 2(1):
- (a) “The supply of goods for consideration within the territory of a Member State shall be subject to VAT.”
- (c) “The supply of services for consideration within the territory of a Member State shall be subject to VAT.”
Article 14: This article defines what constitutes a supply of goods.
- Article 14(1): “‘Supply of goods’ shall mean the transfer of the right to dispose of tangible property as owner.”
Article 24: This article defines what constitutes a supply of services.
- Article 24(1): “‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.”
Article 81(1) of the VAT Directive 2006/112/EC pertains to the determination of the taxable amount for VAT purposes. It states:
- Article 81(1): “The taxable amount shall be the total amount of the consideration, excluding taxes, which has been agreed between the supplier and the customer for the supply of goods or services.”
Article 371: This article relates to the transitional provisions regarding exemptions for certain transactions and is referenced in the context of derogating provisions.
Annex X, Part B, Point 2: This annex outlines specific exemptions applicable to certain supplies, including those made by artists.
Article 311: This article defines what constitutes “works of art” for the purposes of VAT, which is crucial for determining the applicability of reduced rates.
- Article 311(1): “‘Works of art’ means the objects listed in Annex IX, Part A.”
Article 103: This article discusses reduced rates for certain supplies, including works of art.
- Article 103(2): “Member States may provide that the taxable amount for the supply of works of art, as defined in Article 311(1), is to be equal to a fraction of the amount determined in accordance with Article 73.”

Facts and background

Parties Involved: Grotta Nuova, a sole proprietorship owned by visual artist Thomas Poulsen, is in a legal dispute with the Ministry of Taxation (Skatteministeriet) regarding the classification of an artistic supply for VAT purposes.
Art Commission: In 2014, the HF-Centret Efterslægten commissioned Grotta Nuova to create an art installation linked to the architecture of its newly constructed sports hall, with funding provided by the New Carlsberg Foundation.
Work of Art Description: The commissioned work, referred to as “Sculpture and inner courtyard,” included multiple elements such as sculptures, pavilions, and landscaping features, designed to integrate with the Efterslægten’s physical environment.
Tax Authority Decisions: The Danish tax authority (SKAT) initially ruled that Grotta Nuova’s supply was a VAT-exempt artistic service, which led to the denial of VAT exemptions on related purchases, a decision later upheld by the Danish Tax Appeals Agency.
Legal Questions Raised: The case centers on whether the work should be classified as a supply of goods (specifically a sculpture) or a supply of services for VAT purposes, with implications for Grotta Nuova’s ability to deduct VAT and apply a reduced tax rate.

Questions

Classification of Supply: Is Article 2(1)(a) and (c), and Article 371, together with Annex X, Part B, point 2, of Council Directive 2006/112/EC to be interpreted as meaning that where an artist makes a single complex supply (like that at issue in the main proceedings), it is to be classified as a supply of goods as per Article 14(1) of the directive, or as a supply of services as per Article 24(1), read in conjunction with Article 371 and Annex X, Part B, point 2 of that directive?
Nature of Goods: If the answer to the first question is that the supply is to be regarded as a supply of goods (as outlined in Article 14(1)), is the version of Article 81(1), read in conjunction with Article 103(2)(a) applicable at the material time, Article 311(1), point 2, and Annex IX, Part A, point 3, together with CN code 9703 00 00, to be interpreted in such a way that an artist’s supply of goods with the characteristics and functions of the item at issue in the main proceedings constitutes a supply of a work of art provided by the artist, in the form of an original sculpture within the meaning of that directive and the implementing regulation?

Source

Curia

Other ECJ cases referred to:

Case C-169/00, Commission v Finland: This case emphasizes the strict interpretation of exemptions in VAT law, particularly concerning artistic services and whether such exemptions can be extended to include supplies of works of art.
Joined Cases C-497/09, C-499/09, C-501/09, and C-502/09, Bog and Others: These cases discuss the criteria for classifying a complex supply of services as either a supply of goods or services, focusing on the predominant elements of the supply.
Case C-41/04, Levob Verzekeringen BV: This case addresses how to determine whether a supply is primarily of goods or services, highlighting the need to assess the essential features of the transaction.
Case C-231/94, Faaborg-Gelting Linien A/S: Similar to Levob Verzekeringen, this case discusses the characteristics of supplies and the importance of identifying the main elements of a transaction.
Case C-145/18, Regards Photographiques: This case supports the argument that certain artistic supplies should be classified as supplies of goods rather than services, reinforcing the distinction in VAT treatment.
Case C-491/03, Hermann: This case underlines the need to consider whether services provided are ancillary to a principal supply of goods when determining tax implications.
Case C-155/84, Onnasch: This case discusses the definition of “sculpture” in the context of customs tariffs and VAT, helping to delineate what qualifies under EU law as a work of art for tax purposes.