Services supplied for consideration
Article 2(1)(c) — Scope — Taxable transactions — Services supplied for consideration — Monies paid where customers fail to comply with the contractual tie-in period — Characterisation.
VAT Directive must be interpreted as meaning that amounts received by an economic operator in the event of early termination, for reasons specific to the customer, of a services contract requiring compliance with a tie-in period in exchange for granting that customer advantageous commercial conditions, must be considered to constitute the remuneration for a supply of services for consideration, within the meaning of that provision.
Bundled Supply & VAT Rate
Reduced rate of VAT — Annex H, category 7 — Single supply comprised of two distinct elements — Selective application of a reduced rate of VAT to one of those elements — ‘World of Ajax’ tour — Visit to the AFC Ajax museum
A single supply consisted of two distinct elements which would be subject to different rates must be taxed solely at the rate applicable to that single supply, even if the price of each element forming the full price can be identified.
Comments: The Court emphasizes the consequence of a bundled or single supply on the VAT rate. One may not artificially break down the price of a single supply in order to make a reduced rate applicable, where the principle element is standard-rated. Consistently the reduced rate may apply to the total price where the principal element is reduced-rated.
Letting of immovable property with accompanying services – Several distinct and independent services vs single indivisible service
Service charges — Determination of the taxable amount — Possibility of including service charges in the taxable amount of rental services — Transaction composed of a single supply or several independent supplies
In the context of the letting of immovable property, the provision of electricity, heating and water and refuse collection, provided by third-party suppliers to the tenant directly using those goods and services must be regarded as being supplied by the landlord where he has reached agreements for the provision of those supplies and simply passes on the costs thereof to the tenant. The provision of water, electricity and heating as well as the refuse collection accompanying the letting of immovable property must, in principle, be considered as constituting several distinct and independent supplies which need to be assessed separately for VAT purposes, unless the elements of the transaction, including those indicating the economic reason for concluding the contract, are so closely linked that they form, objectively, a single indivisible economic supply which would be artificial to split. It is the national court that has to make the necessary assessments taking in to account all the circumstances of the letting and the accompanying supplies and, in particular, the content of the agreement itself.