EGC T-903/25 (Grotta Nuova) – AG Opinion – Artist’s Complex Installation May Qualify as a Supply of Goods and a Work of Art for VAT

On October 21, 2026, the General Court issued the AG Opinion in the case T-903/25 (Grotta Nuova).

Context: Reference for a preliminary ruling — Taxation — Common system of value added tax (VAT) — Articles 14 and 24 of Directive 2006/112/EC — Supply of goods or services — Single supply — Principal supply and ancillary supply — Completion of a work consisting of several elements — Subject matter of the transaction — Articles 81, 103 and 311 and point 3 of Part A of Annex IX, of Directive 2006/112 – Classification of the work as a “sculpture”‘

Summary

Facts: A Danish artist designed and produced an installation for a school courtyard, comprising sculptures made from motorcycle parts, concrete pavilions, landscaping, gravel areas, a water feature and renovation of a bay window. The parties agreed that the project constituted a single supply but disagreed over its VAT classification.
Issue: The dispute concerns whether the composite artistic project should be treated as a supply of goods or services, and whether it may qualify as the supply of an original sculpture or other “work of art” potentially eligible for preferential VAT treatment.
Question: The Danish court asked whether the transaction constitutes a supply of goods under Article 14 or a supply of services under Article 24 of the VAT Directive. If it is a supply of goods, it also asked whether the transaction constitutes the supply by an artist of an original sculpture under Articles 81, 103 and 311 and Annex IX of the VAT Directive. [eur-lex.europa.eu], [eur-lex.europa.eu]
AG Opinion: Advocate General José Martín y Pérez de Nanclares considers that a single supply whose principal element is the physical delivery of a work of art, accompanied by ancillary elements, must be classified as a supply of goods. It can qualify as the supply of a “work of art” only if all elements forming the principal supply satisfy the relevant definition. The motorcycle-part sculptures appear to meet that test, but the referring court must determine whether the pavilions also form part of the principal supply and, if so, whether they independently qualify as works of art.
Argumentation: The classification must reflect the transaction’s economic reality from the perspective of the average customer. The finished physical artwork, rather than the design process or installation work, is the predominant element. Ancillary supplies follow the VAT treatment of that principal supply. However, the reduced treatment for works of art must be interpreted strictly: a composite principal supply cannot be treated entirely as a work of art where an equally important component is an architectural, craft or commercial item competing with similar industrially or artisanally produced goods. The refurbishment of the school’s bay window appears to constitute a separate supply rather than an ancillary element of the artwork.

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.”

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?

AG Opinion

1. Article 14(1) and Article 24(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2013/61/EU of 17 December 2013,

must be interpreted as meaning that:

A single supply, consisting of a principal supply, namely the physical supply of a work of art, and one or more ancillary supplies, must be classified as a ‘supply of goods’.

(2) Articles 81, 103 and 311 of Directive 2006/112, read in conjunction with point 3 of Part A of Annex IX to that directive,

must be interpreted as meaning that:

– a single supply has as its object the supply of a ‘work of art’ within the meaning of those provisions, provided that all the elements which form the principal supply or services satisfy the criteria for the definition of that concept, and

– works of art are distinguished from craft and commercial works, which, unlike those objects, are in competition with other similar articles, manufactured on an industrial or artisanal basis.

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.