Taxable amount EU VAT case law

131 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 1982 to 2026.

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Provisions these cases interpret most

Article 73 of Directive 2006/112/EC Supply of goods or services · 66 of these cases
Article 11 of Sixth Directive 77/388/EEC Taxable amount · 55 of these cases
Article 2 of Directive 2006/112/EC Subject matter and scope · 35 of these cases
Article 90 of Directive 2006/112/EC Taxable amount · 30 of these cases
Article 2 of Sixth Directive 77/388/EEC 21 of these cases
Article 78 of Directive 2006/112/EC Supply of goods or services · 13 of these cases
Article 135 of Directive 2006/112/EC Exemptions for other activities · 12 of these cases
Article 5 of Sixth Directive 77/388/EEC Taxable transactions · 11 of these cases

The 131 cases, most recent first

Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-565/24 P-GmbH & Co. KG (Coffee trips)

Judgment · 10 September 2026 · Germany

Travel agents' margin scheme, day excursions financed by on-board sales, and a negative margin

Article 26 applies where a taxable person buys tourist services from third parties, in particular transport, in order to sell them in his own name to consumers in the form of excursions, and the fee received does not cover all the costs of those services, the remainder being financed by the revenue from goods sold to those consumers during the excursion. On the third question, the first sentence of Article 12(1) and the third sentence of Article 26(2) confer no right to a refund of input VAT where the margin on a single supply is negative. The judgment settles that the margin scheme is not displaced by the fact that the travel element is sold below cost and cross-subsidised by the sale of goods during the trip, and that a margin below zero marks the limit of the scheme rather than a claim against the exchequer. Relevant to day-excursion and promotional-selling operators, and to any margin computed on a single supply.

T-233/25 Mokoryte

Judgment · 22 April 2026

Assignment of a claim and the right to reduce the taxable amount

Article 90(1) does not allow the subcontractor to reduce the taxable amount. The right to reduce the taxable amount is inseparable from the status of person liable for the VAT on the taxable transaction generating the consideration, a status determined by VAT law and not transferable by a private law assignment. The contractor remained the taxable person entitled to adjust. As regards the subcontractor's own supplies, the assignment itself had economic value and constituted payment, so its claim was fully satisfied and no reduction arose. Relevant to construction chains, factoring and any business taking claims by assignment in settlement of debts.

C-436/24 Lyko Operations

Judgment · 5 March 2026 · Sweden

Loyalty points are not vouchers

The Court held that the concept of "voucher" does not cover such loyalty points, because they carry no obligation on the supplier to accept them as full or partial consideration for a supply of goods. They merely allow the holder, if he chooses to make a further purchase, to obtain low value goods as a bonus. Failing one of the two cumulative conditions, the points are neither single purpose nor multi purpose vouchers. The second question therefore did not need answering. Retailers running points based loyalty schemes in the EU cannot rely on the voucher rules in Articles 30a and 73a to defer or shape VAT on redemption.

C-472/24 Žaidimų valiuta

Judgment · 5 March 2026 · Lithuania

VAT treatment of in-game virtual currency trading

The exemption does not apply. A non-traditional currency qualifies only if accepted by the parties as an alternative means of payment and having no purpose other than as a means of payment, and in-game gold usable only inside the game fails both tests. Nor is it a voucher. The gold is itself the consumable electronic service supplied, not an instrument procuring a later service to be determined. VAT is therefore due on the whole consideration under Article 73, subject to the national court's verifications. Traders, marketplaces and platforms dealing in in-game currencies, skins and similar items must account for VAT on gross sale proceeds, not margin, and cannot rely on Hedqvist.

T-643/24 Credidam

Judgment · 11 February 2026 · Romania

Unlicensed communication to the public and the triple tariff surcharge

The General Court (Preliminary Ruling Chamber) held there is a taxable supply for consideration. Neither the absence of a licence, nor the rightholders' inability to object, nor the statutory origin of the remuneration, nor collection through a management organisation breaks the direct link. VAT applies to the entire sum due, including the element exceeding the notional licence fee, because that surcharge flows directly from the statutory framework governing unlicensed communication. Verification of the facts, including whether communication occurred, is for the referring court. For collecting societies and users of protected content, a statutory surcharge for unlicensed use is taxable consideration and not VAT-free damages, wherever the uplift is fixed by the same legal framework that governs the licensed use. Relevant to hotels, bars, broadcasters and other commercial users facing retrospective claims.

T-646/24 MS KLJUČAROVCI

Judgment · 3 December 2025 · Slovenia

Triangular simplification in a four party chain, and fraud

Article 141(c) does not require the person to whom the subsequent supply is made to take physical possession or receipt. Transport to that person's own customer in the same Member State does not prevent the condition being met, and the intermediary's knowledge of the onward supply is irrelevant, transactions being taxed on their objective characteristics. However, the authorities and courts of the Member State of identification must refuse both the Article 42 and 141 scheme and the second paragraph of Article 41 reduction where the acquirer knew or should have known it was participating in fraud in the chain. Useful for traders and advisers structuring chain transactions.

C-427/23 Határ Diszkont

Judgment · 1 August 2025

A refund handling fee is its own supply, and it is not a net amount

The Court held that the handling service is a distinct and independent supply and not part of a single supply with the goods, and that it is not covered by the exemptions relied on. The protection of legitimate expectations may be relied on against the tax authority where that authority had consistently treated such services as exempt and had not informed the taxable person of the change in the national legislation which, in its earlier version, expressly listed them among exempt activities. It is irrelevant in that context that the taxable person later received a non-binding reply, given after the event on a request for a ruling, stating that the services were ancillary costs sharing the treatment of the exempt principal transaction. Articles 73 and 78 preclude the practice of treating the amounts invoiced as the handling fee as net amounts not including VAT, where the supplier treated its supply as exempt and it is manifestly impossible for it to recover the VAT afterwards from the purchasers. The judgment separates two operations that a retailer performs in the same transaction with the same customer and gives them different treatment, and it does so without allowing the exemption on the goods to carry across to the service.

C-808/23 Högkullen

Judgment · 3 July 2025 · Sweden

Open market value of parent company management services to subsidiaries

Articles 72 and 80 preclude a tax authority from treating such services as in all cases a single supply that excludes determination of open market value by the comparison method in the first paragraph of Article 72. The services, although supplied together, each appear to have their own identifiable character, and a single global price charged to subsidiaries cannot be decisive for intra-group supplies. The second question, resting on the opposite premiss, did not require an answer. Relevant to any group where a holding or parent company charges management fees to subsidiaries with restricted deduction rights, and to Member States operating Article 80 revaluation rules.

C-615/23 Dyrektor Krajowej Informacji Skarbowej (Services de transport public)

Judgment · 8 May 2025 · Poland

Public transport compensation and the taxable amount

The Court held that such compensation is not included in the taxable amount. It is not paid so that the operator supplies a service to a particular recipient, and fares are not fixed so as to fall in proportion to it. The fact that fares would otherwise be higher is not enough. The Le Rayon d'Or line is distinguished. Here the beneficiaries are all potential passengers, and the compensation ignores the identity and number of users, depending instead on vehicle-kilometres offered. Useful for public transport operators and their advisers across the EU where authorities fund public service obligations under Regulation 1370/2007.

C-622/23 rhtb

Judgment · 28 November 2024 · Austria

VAT treatment of sums due on early termination of a construction contract

The Court held that the amount contractually due following termination by the customer of a validly concluded, VAT-taxable services contract which the supplier had begun performing and was prepared to complete is remuneration for a supply for consideration. The consideration is the customer's right to have the contract performed, and the sum equals the agreed price less costs saved, so it is not fixed compensation for loss. Article 73 was not answered, no reasons for interpreting it having been given. Termination payments computed as contract price less costs saved should be treated as taxable consideration, not as damages, where the supplier had started work and remained willing to finish. Relevant to construction, engineering and long term services contracts, and to anyone drafting or invoicing withdrawal and cancellation clauses.

C-248/23 Novo Nordisk (VAT – Contributions paid pursuant to an ex lege obligation)

Judgment · 12 September 2024 · Hungary

Statutory clawback payments by pharmaceutical companies as a price reduction

Article 90(1) precludes such legislation. Even though the payments may be included in the taxable amount as a tax under Article 78(a) and Article 401 does not stand in the way, their ex lege character is irrelevant. The health insurance agency is the actual beneficiary and the final consumer, the payments serve the same subsidy purpose as contractual price volume payments, and the company never freely disposed of that part of the consideration. Collection via the tax authority, which transfers the sums immediately, does not change this. Confirms and extends Boehringer Ingelheim (C-717/19) to purely statutory clawbacks. Relevant to life sciences and healthcare indirect tax advisers.

C-87/23 Latvijas Informācijas un komunikācijas tehnoloģijas asociācija

Judgment · 4 July 2024 · Latvia

Non-profit association, EU-funded training and the taxable amount

Subcontracted training invoiced by a non-profit association, subsidised by European funds up to 70%, is a supply of services for consideration. Article 28 does not apply absent an express agency agreement showing supply in one's own name on behalf of another. Subsidies paid by a European fund for a specific supply enter the taxable amount as third-party payment. Non-profit status does not preclude taxable person status where conduct is comparable to a typical operator. The referring court must still consider the Article 132(1)(i) exemption. Relevant to associations, foundations and other non-profit bodies delivering EU or nationally co-funded training and similar programmes, and to their advisers.

C-241/23 P

Judgment · 8 May 2024 · Poland

Taxable amount of an in-kind property contribution in exchange for shares

The taxable amount is determined by reference to the issue value of the shares where the companies agreed that this was the consideration. The consideration is the subjective value actually agreed and received, not an objective one, and the fact that the issue value was fixed by reference to market valuations of the property does not change that. The referring court may still check that the agreed value reflects economic and commercial reality and is not abusive. Article 80 applies only in its exhaustive listed cases. Relevant to any share-for-asset capital contribution, common in property and group restructurings.

C-657/22 Bitulpetrolium Serv

Judgment · 25 April 2024 · Romania

VAT on penalty excise duty for energy products reintroduced into a tax warehouse

Directive 2003/96 and the principle of proportionality preclude both practices. Energy products must be taxed according to actual use. Imposing the motor fuel rate as a penalty for breach of formal conditions, without allowing the operator to prove actual use, exceeds what is necessary to counter evasion. Although Article 78(1)(a) prima facie brings excise duty into the taxable amount, VAT on the additional excise duty is not due unless a taxable supply of the product for use as a motor fuel actually takes place. Relevant to fuel distributors, tax warehousekeepers and their advisers in Member States that convert documentary or notification breaches into the higher motor fuel excise rate.

C-207/23 Finanzamt X (Application and disposal of goods free of charge)

Judgment · 25 April 2024 · Germany

Free-of-charge disposal of surplus heat and calculation of cost price

Yes: where the goods (heat is tangible property) formed part of business assets and input VAT was wholly or partly deductible, the free transfer is a deemed supply for consideration, regardless of the recipient's tax status or use. The only exception is samples and gifts of small value under the second paragraph of Article 16. Cost price under Article 74 applies only absent a purchase price for the goods or similar goods, and then includes direct and indirect costs, including financing costs, whether or not they bore input VAT. Energy producers, biogas and CHP operators and anyone releasing surplus output free of charge cannot argue away Article 16 on the basis that the recipient is a taxable person using the goods in a deductible activity.

C-606/22 Dyrektor Izby Administracji Skarbowej w Bydgoszczy (Possibility of adjustment in the case of incorrect rate)

Judgment · 21 March 2024 · Poland

Correcting an incorrect VAT rate where only till receipts were issued

Such a practice is precluded. VAT is automatically included in the agreed price under Article 78(a), even where the rate was wrongly determined, but that does not deprive the supplier of a right to a refund, notably where the excessive rate cost it sales volume or margin. Refusing correction solely because till receipts, not invoices, were issued breaches effectiveness where cash register memory allows accurate correction. Unjust enrichment may be invoked only if the authorities establish, by economic analysis of all relevant circumstances, that the burden was completely neutralised. Retailers and consumer facing businesses across sectors (leisure, hospitality, food) that have charged too high a rate on till receipt sales can pursue adjustment by amended return.

C-314/22 Consortium Remi Group

Judgment · 29 February 2024 · Bulgaria

Bad debt relief, limitation periods, invoice correction and interest

A limitation period is permissible, penalising the insufficiently diligent, but it may only start when the taxable person could, acting diligently, assert the right to reduction. Absent national rules that starting point must be identifiable with reasonable probability. Requiring prior invoice correction and prior notice to the debtor is precluded where, absent specific national provisions, compliance is impossible in time for reasons beyond the taxable person's control. Refund carries default interest, running from when the reduction is claimed in the current period's return. Relevant wherever a Member State has used the Article 90(2) derogation but denies relief outright.

C-377/23 Sancra

Order · 5 February 2024 · Portugal

A price invoiced at a wrong zero rate is treated as including the correct VAT

The Court holds that the invoiced price must be regarded as already including VAT, unless national law gives the taxable person the possibility of passing the corrected tax on to the final consumers and recovering it from them. VAT is a tax borne by the final consumer, and adding the tax on top of a price already paid would make the supplier bear a burden the system does not intend. The natural companion to Tulica and Plavosin and to the Galicia case.

C-461/21 Cartrans Preda

Judgment · 7 September 2023 · Romania

Proving the exemption for transport connected with importation

Recording the import, or the existence of an MRN, does not of itself and systematically mean the transport costs are in the import taxable amount. That must be verified. But the exemption cannot be automatically refused for want of the specific national documents where other evidence, whose authenticity is not in doubt, establishes the two substantive conditions. VAT recovery abroad is a supply of services. Withholding tax on non-residents restricts Article 56 TFEU, justifiable only by effective tax collection, and denying deduction of business expenses is precluded absent justification. Hauliers and freight forwarders invoicing import transport exempt must still positively evidence that their fee entered the import taxable amount.

C-180/22 Mensing II

Judgment · 13 July 2023 · Germany

Margin scheme, acquisition VAT and the profit margin

The acquisition VAT forms part of the taxable amount. "Purchase price" in Article 312(2) covers only what the dealer pays his supplier, not tax paid to the Treasury, and the VAT to be deducted under Article 315 is that on the sale itself. Fiscal neutrality and the aim of preventing double taxation cannot override clear wording, even though domestic purchases and self-imports (Article 317, second paragraph) are treated more favourably. Only the EU legislature can change this. Art and antiques dealers using the margin scheme for works acquired cross-border from creators or their successors face a higher taxable amount than on equivalent domestic purchases or own imports, because acquisition VAT is neither deductible nor a margin reduction.

C-612/21 Gmina O.

Judgment · 30 March 2023 · Poland

Municipal renewable energy installations and the limits of economic activity

Such activity does not constitute a supply of goods and services subject to VAT where it is not intended to obtain income on a continuing basis and residents pay at most a quarter of the costs incurred, the balance coming from public funds. The decisive point is the absence of economic activity. No permanence, no staff, structurally loss-making pricing unlike an RES installer. Article 13(1) therefore did not need examination, and the taxable amount question fell away. Useful for advisers to local authorities running subsidised energy efficiency, insulation or renewables schemes.

C-482/21 Euler Hermes

Judgment · 9 February 2023 · Hungary

Bad debt relief claimed by a trade credit insurer

Article 90(1) and fiscal neutrality do not preclude such legislation. The portion of the debt for which the insurer paid compensation was in fact received by the suppliers as consideration (consideration may come from a third party), so there is no non-payment for that part and no relief for the suppliers either. Assignment under civil law does not make the insurer the taxable person entitled to reduce the taxable amount. Treating it as such would breach neutrality. Credit insurers and factoring or debt purchase businesses cannot recover the VAT element of indemnified debts by standing in the supplier's shoes.

C-213/19 Commission v United Kingdom (Action to counter undervaluation fraud)

Judgment · 8 March 2022 · United Kingdom

Undervalued imports, customs value, import VAT and own resources liability

For customs procedure 40 imports, an undeclared true customs value necessarily distorts the import VAT taxable amount, so Articles 2(1)(d) and 85 to 87 were breached. For procedure 42, there is no link between customs value and the taxable amount, which rests on the purchase price invoiced in the Member State of destination. Liability for uncollected VAT lies there, not with the Member State of importation. The claim for quantified VAT own resources losses failed. Undervaluation does not necessarily reduce net VAT receipts, since importers and traders recover input tax. Confirms that customs valuation failings automatically infect the import VAT base under Article 85, so a revaluation carries a parallel import VAT assessment.

C-398/20 ELVOSPOL

Judgment · 11 November 2021 · Czechia

Bad debt relief and claims arising shortly before insolvency

Article 90 precludes such a condition where it is not ruled out that the claim may ultimately prove definitively irrecoverable. A blanket six-month cut-off bears no relation to how the claim is actually treated in the insolvency proceedings, so it does not address uncertainty of recovery under Article 90(2). Nor is it justified under Article 273. The timing of the claim alone raises no presumption of evasion, and forcing the creditor to bear unreceived VAT exceeds what is strictly necessary. Suppliers with Czech bad debt claims caught by the six-month rule have grounds to reopen refused adjustments.

C-324/20 X-Beteiligungsgesellschaft (VAT – Successive payments)

Judgment · 28 October 2021 · Germany

Chargeability on a one-off service paid in instalments

Article 64(1) does not cover a one-time supply paid in instalments. It applies only where the nature of the service itself justifies periodic payment, that is, continuous or recurrent supplies performed over defined periods where the completion date is not unambiguous. Article 90(1) does not assist. An instalment not yet fallen due is not non-payment, since the agreed consideration is unchanged. Pre-financing the VAT does not alter that. The supplier owes output tax regardless of receipt. Relevant to anyone structuring one-off services (brokerage, corporate finance, agency, consultancy) with deferred or staged fee payments.

C-717/19 Boehringer Ingelheim

Judgment · 6 October 2021 · Hungary

Reduction of the taxable amount for voluntary payments to a State health insurance agency

Article 90(1) of the VAT Directive precludes both conditions. Article 90(1) is not limited to price reductions imposed by law. A voluntary contractual payment reducing the consideration actually retained is a price reduction after the supply, the health insurance agency being treated as final consumer. Member States' discretion cannot extend to conditions that deny the reduction to an entire category of taxpayers. Where no invoice has been issued, neutrality and proportionality require the taxpayer to be allowed to prove the transaction by other means, particularly where the counterparty is a State entity. Confirms and extends Boehringer Ingelheim Pharma (C-462/16) to voluntary rebate arrangements with public payers, relevant to pharmaceutical and medical device suppliers operating under price volume or clawback agreements with State reimbursement bodies across the EU.

C-521/19 Tribunal Económico Administrativo Regional de Galicia

Judgment · 1 July 2021 · Spain

Undeclared consideration in a fraud is treated as VAT inclusive

The Court holds that they must be regarded as a price already including VAT, unless national law allows the taxable person to pass on and deduct the VAT afterwards notwithstanding the fraud. VAT is a tax on consumption borne by the final consumer, and treating the reconstituted sum as net would make the supplier bear a tax burden contrary to neutrality, even though the concealment was deliberate. An important judgment for the arithmetic of assessments, and a Spanish one.

C-844/19 technoRent International and Others

Judgment · 12 May 2021 · Austria

Default interest on late VAT refunds where national law is silent

Articles 90(1) and 183, read with fiscal neutrality, require interest where either type of refund is not made within a reasonable period. A refund following a reduction of the taxable amount is treated exactly like excess input VAT. Article 27(2) of Directive 2008/9 is a catch-all for non-established claimants and cannot be applied by analogy outside its scope. The conditions (rate, starting point) remain for national law, and the referring court must interpret domestic law in conformity, short of contra legem. Silence in national law is no answer to an interest claim.

C-802/19 Firma Z

Judgment · 11 March 2021 · Germany

Discounts to insured persons and reduction of the taxable amount

The pharmacy cannot reduce its taxable amount. The pharmacy's supply to the fund was an exempt intra-Community supply, so there was no taxable amount capable of adjustment, and the onward supply by the fund to its insured persons fell outside the scope of VAT altogether. The conditions of Article 90(1) were therefore not met, and there was no need to consider whether a chain of transactions within the meaning of Elida Gibbs existed. Offsetting a reduction against the taxable amount of a different transaction is precluded. Elida Gibbs relief presupposes a taxable amount of the discount-giver that can be reduced.

C-507/20 FGSZ

Order · 3 March 2021 · Hungary

When the limitation period for bad debt relief starts to run

By reasoned order under Article 99, the Court held that where a Member State imposes a limitation period for asserting the right to reduce the taxable amount in respect of a definitively irrecoverable debt, that period must run from the date the debt became definitively irrecoverable, not from the date performance of the payment obligation was originally due. A diligent taxable person, here applying six days after the liquidator's finding, and absent abuse, cannot be deprived of the reduction. Article 90(1) has direct effect.

C-787/19 Commission v Austria (VAT – Travel agents)

Judgment · 27 January 2021 · Austria

Austria could not exclude business customers from the travel agents scheme or use global margins

The Court finds the infringement established on both counts. The scheme applies to all types of customer, so business clients cannot be carved out, and the margin has to be determined for each supply of travel services rather than globally by category or period. Austria was ordered to pay the costs. The judgment closes the two most common national departures from the margin scheme.

C-335/19 E. (VAT – Reduction of the taxable amount)

Judgment · 15 October 2020 · Poland

Bad debt relief and the status of debtor and creditor

Article 90 precludes all of those conditions. VAT registration of debtor or creditor is unconnected with whether non-payment is definitive, and symmetry with the debtor's input tax adjustment under Article 185(2) does not require either party to retain taxable status. Excluding relief pending the outcome of insolvency proceedings is disproportionate. A reasonable probability of non-payment, with upward re-evaluation if payment follows, suffices. Article 90(1) has direct effect and the conditions must be set aside even if other national provisions are affected. Suppliers with unpaid Polish invoices can claim relief notwithstanding the customer's deregistration, liquidation or insolvency, and notwithstanding their own loss of taxable status, relying directly on Article 90(1).

C-146/19 SCT

Judgment · 11 June 2020 · Slovenia

Bad debt relief where the claim was not lodged in the debtor's insolvency

Extinction of the claim through failure to lodge it produces a definitive reduction of the debtor's obligations, so this is not "non-payment" under Article 90(2) but falls under Article 90(1). Requiring lodgement is in principle a legitimate formality under Articles 90(1) and 273, but refusal is precluded where the taxable person shows the claim would not have been recovered even if lodged. Article 90(1) has direct effect. National courts must interpret national law consistently or disapply it. Creditors in Member States that condition bad debt relief on procedural steps in the debtor's insolvency now have an escape route. Relevant to insolvency practitioners, credit control and finance teams, and advisers handling write-offs.

C-756/19 Ramada Storax

Order · 29 April 2020 · Portugal

Bad debt relief cannot be refused because the insolvency was declared abroad

The Court holds that those provisions preclude such legislation. Article 90(1) reflects the principle that the taxable amount is the consideration actually received, and a Member State cannot confine bad debt relief to insolvencies declared before its own courts under its own law. A finding of irrecoverability made by a court of another Member State must be given effect. An important order for cross border trade, where the customer insolvency will normally be handled abroad.

C-292/19 Porr Építési Kft.

Order · 29 January 2020 · Hungary

Definitively irrecoverable debts must give a reduction of the taxable amount

The Court holds that a Member State must allow the reduction where the taxable person can show that the claim is definitively irrecoverable, which is for the referring court to verify. Such a situation is not a case of non payment capable of falling within the derogation in Article 90(2), because that derogation rests on the uncertainty of whether payment will eventually be made, and here that uncertainty is gone. The order draws the line that makes Article 90(2) workable.

C-573/18 C and C (VAT and agricultural subsidies)

Judgment · 9 October 2019 · Germany

Subsidies from a producer organisation's operational fund as consideration

Payments made by the operational fund to the producer organisation for the supply of the capital goods to its members form part of the consideration and are subsidies directly linked to the price paid by a third party. The price to producers was reduced by exactly the amount coming from the fund, so a direct link existed. The fund has its own legal capacity and its assets may be used only for approved operational programmes. The remaining questions did not require an answer. A producer organisation in fruit and vegetables accounts for output VAT on the full acquisition cost of capital goods passed on to members, not merely on the part invoiced.

C-242/18 UniCredit Leasing

Judgment · 3 July 2019 · Bulgaria

Reduction of the taxable amount on termination of a finance lease

A final notice of adjustment does not bar reduction under Article 90(1). It is not a formality justified by Article 273. Both the arrears up to termination and the termination compensation (itself taxable consideration for the leasing supply) are cases of non-payment, so a Member State which has not legislated for reduction on non-payment may refuse it. But the derogation cannot apply where the taxable person shows a reasonable probability that the debt will not be honoured, subject to upward re-evaluation if payment occurs. Lessors and other suppliers in Member States which exclude bad debt relief cannot be refused relief indefinitely.

C-127/18 A-PACK CZ

Judgment · 8 May 2019 · Czechia

Bad debt relief where the insolvent debtor has lost taxable person status

Article 90 precludes national legislation denying correction of the taxable amount for total or partial non-payment on the ground that the debtor is no longer a taxable person. The derogation in Article 90(2) exists only to address uncertainty as to whether non-payment is definitive. Loss of taxable person status in insolvency points the other way. Article 273 cannot justify a rule that forces a supplier to pay VAT it never received, absent any particular evasion risk.

C-422/17 Skarpa Travel

Judgment · 19 December 2018 · Poland

VAT on payments on account under the travel agents' margin scheme

The special scheme is not a self-contained regime. Only the rules on place of supply, taxable amount and deduction are displaced, so Article 65 applies and VAT is chargeable on receipt of the payment on account, provided the tourist services are precisely designated at that time. Where actual costs are not yet incurred or cannot be determined, the margin may be estimated from the projected total cost, taking account of costs already incurred, with adjustment once the definitive individual cost is known. For tour operators and travel agents using the margin scheme, VAT on a deposit is due as received rather than on completion of the trip, provided the trip is identifiable by destination and dates.

C-51/18 Commission v Austria

Judgment · 19 December 2018 · Austria

VAT treatment of the artist's resale royalty

The Court held that Austria infringed Article 2(1) by taxing the royalty. The legal relationship on a resale exists only between seller and buyer. The artist cannot intervene or prevent it and so supplies nothing, the royalty being a statutory entitlement to share in the economic success of the work. Fiscal neutrality does not require alignment with royalties for successive exploitation of other works, whose situation differs. Nor does the royalty alter the taxable amount of the first sale. Resale royalties collected for artists must be treated as outside the scope of VAT.

C-672/17 Tratave

Judgment · 6 December 2018 · Portugal

Prior notice to the debtor as a condition for reducing the taxable amount

The Court held that neutrality and Articles 90 and 273 do not preclude such a prior notification requirement. It falls within the Member States' discretion over formalities, contributes to correct collection, prevention of evasion and elimination of the risk of revenue loss, and allows the State to act in time in the insolvency proceedings. The requirement is subject to not being excessively onerous, which the referring court must verify. No particular form is prescribed. The second question was not answered. On a claim for bad debt relief the domestic notification formalities operate as substantive preconditions rather than administrative afterthoughts, and they have to be evidenced contemporaneously.

C-548/17 baumgarten sports & more

Judgment · 29 November 2018 · Germany

Chargeability of commission paid in conditional instalments

Article 63, read with Article 64(1), precludes treating the chargeable event and chargeability as arising when the player is placed. Where a supply gives rise to successive payments, it is regarded as completed on expiry of the periods to which those payments relate, so VAT is chargeable then. The Court indicated that an agency service remunerated by conditional instalments over several years following the placement appears to be of that kind, but left it to the referring court to verify that Article 64(1) applies.

C-648/16 Fontana

Judgment · 21 November 2018 · Italy

Assessing VAT on turnover estimated by sector studies

No objection in principle. Article 273 leaves Member States discretion, and extrapolation from sector studies to assess additional VAT where declared and estimated revenue differ seriously is permissible. The qualification is that the studies must be correct, reliable and up to date, the discrepancy can create only a rebuttable presumption, the taxable person must be able to contest the study's accuracy and its relevance to his situation with any contrary evidence and without an excessive standard of proof, and must still exercise deduction under Title X. Verification is for the national court. Relevant wherever indirect assessment methods, standard margins, sectoral benchmarks or turnover reconstruction are used, notably in Italy but also in other Member States operating similar presumptive tools.

C-544/16 Marcandi

Judgment · 5 July 2018 · United Kingdom

Sale of bid credits for online auctions as a separate supply of services

Issuing the credits is a supply of services for consideration, the consideration being the amount paid for them. The credits give an autonomous chance to buy below market value and are exhausted on bidding, so this is not a preliminary transaction to the supply of goods. The payment is not a payment on account for goods. Credit value is excluded from the taxable amount of the goods. For winners the taxable amount is the winning bid plus shipping, and for "buy now" and "earned discount" purchases the credits are a price discount under Article 79(b). Relevant to gamified e-commerce, entry-fee and pay-to-play platforms selling non-refundable tokens, credits or bid packs.

C-380/16 Commission v Germany

Judgment · 8 February 2018 · Germany

Travel agents' margin scheme excluded for business customers and applied on a global base

The Court upheld both complaints. Articles 306 to 310 do not restrict the special scheme to services supplied to final consumers, so excluding supplies to taxable persons acting for their business narrows the scheme beyond what the directive allows. And the margin must be determined by reference to each supply of travel. A global computation for groups of services or for a whole tax period is incompatible with Article 73 and with the structure of the scheme. Germany was ordered to pay the costs. The judgment that settled the customer-based reading of the travel agents' scheme against Germany and several other Member States, and it matters well beyond tour operators.

C-462/16 Boehringer Ingelheim Pharma

Judgment · 20 December 2017 · Germany

Statutory discounts to private health insurers and the taxable amount

The Court held that Article 90(1) requires the reduction. The manufacturer cannot freely dispose of the full price because the discount is fixed and mandatory by law, so part of the consideration is not received. The absence of any contractual link, or of a modification of contractual relations, does not preclude Article 90(1). On these facts the private insurer is to be treated as the final consumer of the manufacturer's supply, so VAT collected may not exceed what that final consumer paid. Manufacturers subject to statutory or regulated rebate schemes paid to parties outside the invoicing chain, in pharmaceuticals and comparable regulated sectors, can reduce the taxable amount rather than absorbing VAT on rebated amounts.

C-305/16 Avon Cosmetics

Judgment · 14 December 2017 · United Kingdom

Direct selling through unregistered resellers and the scope of an Article 27 derogation

The derogation is valid and is not precluded by Articles 17 and 27, even though it makes no allowance for input VAT on demonstration items borne by the unregistered resellers. The derogation touches only the taxable amount. The deduction rules remain intact, and non-taxable resellers simply have no right to deduct. Giving credit would itself be an unauthorised derogation from Article 17(2). No obligation existed to notify the Commission of that point. Direct selling groups operating under open market value directions cannot claw back the sticking VAT suffered by their unregistered representatives on demonstration items or third party purchases.

C-246/16 Di Maura

Judgment · 23 November 2017 · Italy

Bad debt relief and the length of insolvency proceedings

The derogation does not allow a Member State to impose such a condition. The derogation lets Member States address the uncertainty as to whether non-payment is definitive, but does not allow them to exclude reduction altogether, and it must be construed strictly. That objective can be met by granting relief once the taxable person shows a reasonable probability that the debt will not be paid, with upward re-evaluation if payment later occurs. Requiring certainty obtainable only after some ten years is disproportionate and creates a cash-flow disadvantage. Confirms an outer limit on national bad debt relief regimes.

C-404/16 Lombard Ingatlan Lízing

Judgment · 12 October 2017 · Hungary

Reduction of the taxable amount on termination of a finance lease

The Court held that definitive termination of such a lease, where the lessor recovers the asset and can no longer claim the instalments, is a cancellation or refusal under Article 90(1), not non-payment. The distinction is definitiveness because non-payment leaves the debt in principle still owed and possibly only temporarily unpaid. Article 90(1) has direct effect and can be invoked despite the national derogation. Member States may still impose formalities proving the consideration will definitely not be received. Lessors and asset finance providers who accounted for VAT on the full amount at the outset can claim a reduction when an agreement is definitively terminated for default, including in Member States which have excluded reduction for bad debts.

C-273/16 Federal Express Europe

Judgment · 4 October 2017 · Italy

Exemption of transport services ancillary to exempt imports

Such national legislation is precluded. Where transport costs are included in the taxable amount under Article 86(1)(b), the ancillary supply follows the tax treatment of the import and is exempt under Article 144, even if no VAT was in fact levied at the customs stage. The exemption serves technical simplification, not the avoidance of double taxation. The extra Italian condition would deprive it of effect for consignments of negligible value or of a non-commercial character. Confirms that a carrier or express operator handling a low-value or non-commercial consignment charges no VAT on transport already included in the import taxable amount, whatever the import VAT position.

C-208/15 Stock ‘94

Judgment · 8 December 2016 · Hungary

Tied vendor finance as part of a single supply of goods

A single transaction, in which the supply of the goods is the principal supply and the tied loan merely a means of acquiring them. The taxable amount comprises both the price of the goods and the interest. The Court's reasoning turns on the loan being usable only to buy the integrator's inputs, so it has no independent interest for the farmer, a matter for the national court to verify. The options to supply additional services or buy the production are irrelevant. Relevant to suppliers offering tied or restricted purchase financing, notably agricultural input suppliers, equipment dealers and other vendor credit arrangements, where interest has been invoiced as exempt under Article 135(1)(b).

C-432/15 Baštová

Judgment · 10 November 2016 · Czechia

Race prize money, deduction and the reduced rate for sporting facilities

No supply for consideration where only placed horses receive a prize, even a prize fixed in advance, because the payment is uncertain. There is a supply for consideration where the organiser pays remuneration for participation regardless of placing. Input VAT on racing one's own horses is deductible as general costs only where the horses are actually intended for sale or racing objectively promotes the business. Prize money then stays outside the taxable amount. The reduced rate cannot apply where training is a main or equal-status component. Relevant to racing stables, breeders and equestrian centres, and by analogy to other prize-based sporting participation.

C-576/15 Maya Marinova

Judgment · 5 October 2016 · Bulgaria

Estimated assessment where supplies and revenue are concealed

They do not preclude such legislation. Failure to keep accounts and to record invoices may be treated as tax evasion, and Article 273 leaves Member States discretion to re-establish the position that would have existed absent evasion, estimating the taxable amount as closely as possible to the consideration actually received. Fiscal neutrality cannot be invoked by a taxable person who intentionally concealed transactions. The national court must still verify that the rules go no further than necessary. Article 80 was irrelevant, concerning tied parties. Confirms that estimated or "analogous" assessments based on suppliers' invoices, stock absences and typical margins are compatible with the Directive, even though they depart from Article 73 and identify no customer.

C-128/14 Het Oudeland Beheer

Judgment · 28 April 2016 · Netherlands

Valuing a self-supply of an office building held under a long lease

The Court holds that both elements may be included, notwithstanding the earlier payment and full deduction. As to measurement, where the land and the building under construction were acquired through the grant of a right in rem, the value of that right corresponds to the amount payable each year for the remainder of the long lease, corrected or capitalised by the same method used to value the grant of the leasehold. One of the technical anchors of the self supply rules now in Articles 18(a) and 74.

C-209/14 NLB Leasing

Judgment · 2 July 2015 · Slovenia

Repossession under a finance lease and reduction of the taxable amount

Where the lease provides for transfer of ownership on expiry, or the lessee enjoys all essential powers of ownership with substantially all risks and rewards and the present value of the payments is practically identical to market value, the transaction is an acquisition of capital goods. Article 90(1) does not permit reduction where the taxable person has in fact received all the consideration, or where, absent refusal or cancellation, the recipient is no longer liable for the price. Neutrality does not bar separate taxation of the lease and the onward sale unless they form a single supply, for the national court to decide. Relevant to lessors and to sale and lease back structures over immovable property.

C-256/14 Lisboagás GDL

Judgment · 11 June 2015 · Portugal

Municipal land use taxes passed on by a gas concessionaire belong in the taxable amount

The Court holds that they must be included in the taxable amount under Article 73. The sums are not amounts received as repayment of expenses paid in the name and for the account of the customer, because the concessionaire pays the municipal taxes in its own name and on its own account for the right to use public property that it needs in order to make its own supplies. A useful counterpoint to De Danske Bilimportorer.

C-16/14 Property Development Company

Judgment · 23 April 2015 · Belgium

Taxable amount on self-supply of a self-constructed building

Where the taxable person constructed rather than purchased the building and similar goods exist on the market, the taxable amount is the purchase price at the time of the application of buildings of similar location, size and other essential characteristics. Cost price applies only if no purchase price for the goods or similar goods exists. It is therefore irrelevant whether interim interest forms part of that purchase price. The taxable amount may never include value on which VAT was already paid without a right of deduction. Relevant to property developers and any business applying self-built assets to exempt use, notably lettings, and to Member States operating the Article 18 self-supply option.

C-42/14 Wojskowa Agencja Mieszkaniowa w Warszawie

Judgment · 16 April 2015 · Poland

Utilities and service charges recharged by a landlord to tenants

Where the landlord contracts with the suppliers and simply passes on the costs, he is treated as making those supplies to the tenant. Auto Lease Holland does not apply. Such supplies are in principle distinct and independent from the letting, assessed separately, unless the elements are so closely linked as to form a single indivisible economic supply which it would be artificial to split. Individual meters, consumption-based and separately itemised billing, and tenant choice of supplier point to separate supplies. National courts must assess the contract. Relevant to landlords, property managers and their advisers who recharge utilities and waste services.

C-589/12 GMAC UK

Judgment · 3 September 2014 · United Kingdom

Direct effect of bad debt relief where national law exempts the resale

Article 11C(1), first subparagraph, is sufficiently precise and unconditional to have direct effect, despite the discretion left to Member States over conditions. A Member State cannot refuse it on the ground that the combined result with national law is one neither system intended. The shortfall stems solely from the national exemption of the auction sale, and a State may not plead its own defective implementation. Whether that national treatment conforms is irrelevant. Abuse remains for the national court, but structuring to limit tax liability is legitimate. Confirms that taxable persons may rely on directly effective Directive provisions transaction by transaction, without the tax authority netting off advantages arising from national rules applied to a linked transaction.

C-337/13 Almos Agrárkülkereskedelmi

Judgment · 15 May 2014 · Hungary

Reduction of the taxable amount where the price is not paid

Article 90 does not preclude national law that omits non-payment of the price, that omission being treated as use of the Article 90(2) derogation, but the legislation must then cover all the other Article 90(1) situations where consideration is not received, which the national court must verify. Article 90(1) is sufficiently precise and unconditional to be relied on directly. Formalities may be imposed to prove that the consideration definitively will not be received, but no more than necessary. Confirms that a Member State may silently derogate for bad debts.

C-151/13 Le Rayon d’Or

Judgment · 27 March 2014 · France

Lump-sum public funding as consideration for care services

Such a lump sum is consideration for the care supplied by the home to its residents and falls within the scope of VAT. Payment by a third party rather than the recipient does not break the direct link. Where the supply consists in the provider's permanent availability to give care as required, it is unnecessary that the care be defined in advance, personalised, or requested at a specific time, provided the amount is fixed in advance on well-established criteria. Relevant to care homes, hospitals, clinics and other operators funded by block or capitation payments from public insurance or social funds, and to advisers computing partial exemption fractions.

C-300/12 Ibero Tours

Judgment · 16 January 2014 · Germany

An intermediary agent discount does not reduce its own taxable amount

The Court holds that those principles do not apply. The agent is not a link in the chain of supply of the principal service. It supplies a distinct intermediary service to the tour operator, and the discount it funds out of its own commission does not alter the consideration it receives for that service. The taxable amount of the intermediary service is therefore unaffected. The judgment marks the boundary of Elida Gibbs.

C-618/11 TVI

Judgment · 5 December 2013 · Portugal

Inclusion of a national screening tax in the taxable amount

The screening tax must be included in the taxable amount. Although it is not consideration and adds no value, it has a direct link with the supply because its chargeable event coincides with that for the VAT. It becomes chargeable as soon as, and only if, the screening services are supplied. The fiscal substitution mechanism and the use of suspense accounts do not make the tax a repayment of expenditure incurred in the name and on behalf of the customer. Confirms that the coincidence of chargeable events is the decisive test for whether a national levy sits inside the VAT base, so sector specific levies on broadcasting, advertising and similar services will normally be taxed even where the statutory debtor is the customer.

C-249/12 Tulică and Plavoşin

Judgment · 7 November 2013 · Romania

Whether a price agreed without reference to VAT is treated as VAT inclusive

Where the supplier cannot recover the VAT subsequently claimed from the purchaser, the agreed price must be treated as already including VAT. Otherwise the supplier bears a tax intended for the final consumer and the authorities collect more than the taxable person received. The position is different if national law allows the supplier to add a supplement equal to the tax and recover it from the purchaser. Whether such recovery is possible is for the national court to determine. The answer turns entirely on national contract and tax law. Relevant to property developers and individuals reclassified as taxable persons, and more widely to any silent-contract or undeclared-supply assessment.

C-440/12 Metropol Spielstätten

Judgment · 24 October 2013 · Germany

Cumulative VAT and gaming tax on slot machines, and the taxable amount

Cumulative levying is permitted provided the special national tax cannot be characterised as a turnover tax. Cash receipts over a set interval are a permissible taxable amount. With statutory limits on stakes, winnings and losses, the consideration is only the proportion of stakes the operator may keep, following Glawe. The hopper performs the same function as the earlier reserve compartment. Full offset of VAT against an unharmonised tax is not precluded. The pass-on questions were hypothetical, since the legislation does allow full pass-on. Confirms the German cash box method and closes the Glawe-based challenge to it, including the argument that new hopper technology distinguishes modern machines. Relevant to gaming advisers in any Member State with sector-specific levies.

C-283/12 Serebryannay vek

Judgment · 26 September 2013 · Bulgaria

Rent-free use of property in exchange for fitting-out works

The fitting-out and furnishing services are supplied for consideration. There is a direct link between them and the right, obtained under the contract, to have the apartment at the supplier's disposal for its business during the contractual term. That the owner benefits only when the contract expires is irrelevant, since the parties assumed reciprocal obligations on conclusion of the bilateral contract. The remaining questions on Articles 26, 62 and 63 therefore did not need to be answered. Confirms that rent-free occupation granted in return for tenant works is a barter of two taxable supplies, not a gratuitous supply. Relevant to property developers, hoteliers and operators taking shells on fit-out-for-rent-free terms, and to related-party arrangements between owner-managers and their companies.

C-142/12 Marinov

Judgment · 8 May 2013 · Bulgaria

Taxable amount on retention of goods after deregistration

Article 18(c) covers cessation whatever its cause, including removal from the register by the authorities, subject only to the Article 19 cases. The taxable amount is governed by Article 74, not Article 80 (whose conditions are exhaustive and not met here). It is the residual value of the goods at cessation. An open market value rule is precluded unless in practice it produces that residual value, reflecting the change in value since acquisition. Article 74 has direct effect. Relevant wherever a business is struck off the VAT register while holding assets on which input tax was recovered, in particular vehicle fleets and other depreciating equipment.

C-153/12 Sani treyd

Order · 21 March 2013 · Bulgaria

Building rights granted in exchange for construction make the tax chargeable at once

The Court holds that tax may become chargeable when the right is granted, provided all the relevant elements of the future supply are already known, so the services are precisely identified and the value of the right can be expressed in money. It is irrelevant that granting the right is an exempt transaction made by non taxable persons. Articles 73 and 80 do preclude a national rule imposing open market value in every barter, outside transactions between connected parties. A reasoned order under Article 99 of the Rules of Procedure that follows Orfey Balgaria closely.

C-310/11 Grattan

Judgment · 19 December 2012 · United Kingdom

No retrospective reduction of the taxable amount under the Second Directive

Article 8(a) confers no such right. Under Article 5(5) the chargeable event occurred on delivery and the tax debt arose on the basis of assessment fixed at that moment. The Second Directive contained nothing allowing regularisation afterwards. Fiscal neutrality cannot supply what Article 11C(1) of the Sixth Directive later added. Since the sub-customers, as final consumers, paid the unreduced catalogue price and the commission went to the agents, the taxable amount was that full price. Closes off pre-1978 repayment claims resting on post-supply rebates, credits or agents' commission, a Fleming-style claim pattern familiar to UK retailers and their advisers.

C-549/11 Orfey

Judgment · 19 December 2012 · Bulgaria

Payments on account in kind and the taxable amount in barter construction deals

Article 65 covers payments on account in kind, including where they represent the entire consideration, so VAT on the construction services became chargeable when the building right was granted, provided all relevant information about the future supply was already known, the services were precisely identified, and the right's value could be expressed in money. A possible future extinction of the right is only a cancellation condition. Absent Article 80 ties between the parties, open market value cannot replace the subjective consideration. Articles 63, 65 and 73 have direct effect. Relevant to property developers and their advisers using land-for-build or building-right barter structures.

C-299/11 Gemeente Vlaardingen

Judgment · 8 November 2012 · Netherlands

Self-supply charge on goods improved by a third party on the taxable person's own land

The self-supply option covers not only goods produced entirely in-house but also goods constructed or improved by a third party using materials, including land, supplied by the business, and VAT may be charged on the aggregate of the transformation costs and the land value, measured by market value at the time of application. But no VAT may be charged on an element of value on which the taxable person has already paid VAT, and the charge cannot apply if the land falls within the exemption for land not built on that is not building land. Relevant to any exempt operator (local authorities, sports and leisure providers, healthcare, education, social housing) that refurbishes or develops its own land using contractors in a Member State applying the self-supply option.

C-377/11 International Bingo Technology

Judgment · 19 July 2012 · Spain

Statutory prize element of bingo card price and the deduction fraction

The taxable amount does not include the portion of the card price fixed in advance by legislation and destined for winnings. The organiser cannot freely dispose of it and it is not consideration for its service. Consequently Member States may not include that amount in the denominator of the Article 19(1) fraction. The Glawe reasoning applies because the payout percentage is mandatory and predetermined. Where the organiser has free use of all sums received (Town and County Factors) it does not. For a gaming operator with mixed taxed and exempt activities, statutory minimum payouts come out of both the taxable amount and the denominator of the partial exemption fraction.

C-621/10 Balkan and Sea Properties and Provadinvest

Judgment · 26 April 2012 · Bulgaria

Open market value as the taxable amount for supplies between connected persons

The conditions in Article 80(1) are exhaustive. National legislation may not rely on that provision to make open market value the taxable amount outside the listed cases, in particular where the taxable person has a full right of deduction, since no evasion or avoidance risk arises there. Member States remain free to impose other anti-evasion obligations under Article 273. Article 80(1) may be relied on directly, and incompatible national provisions must be disapplied, leaving Article 73 to apply. Member States operating blanket connected-party valuation rules cannot apply them where both parties have full deduction rights.

C-588/10 Kraft Foods Polska

Judgment · 26 January 2012 · Poland

Acknowledgment of receipt of a credit note as a condition for reducing the taxable amount

The requirement is a condition within Article 90(1) and, in principle, neutrality and proportionality do not preclude it. It helps ensure correct collection, prevent evasion and avoid loss of revenue. But where obtaining the acknowledgment within a reasonable period is impossible or excessively difficult, the supplier must be allowed to prove by other means that he took all necessary steps to satisfy himself that the customer has and knows of the correcting invoice, and that the transaction was actually carried out on the corrected terms. Member States may condition credit note relief on customer acknowledgment, but cannot apply it rigidly where customers are under no legal duty to acknowledge.

C-69/11 Connoisseur Belgium

Order · 9 December 2011 · Belgium

No VAT on amounts that could have been charged but were not

Ruling by order, the Court held that in circumstances such as those of the main proceedings VAT is not due on such amounts. The taxable amount is the consideration actually obtained by the supplier, not the consideration it might have obtained had it exercised a contractual entitlement. A charge that was never made forms no part of what was received in return for the supply. Short but pointed, and it settles an argument administrations occasionally run from the terms of a contract rather than from what was invoiced and paid.

C-93/10 GFKL Financial Services

Judgment · 27 October 2011 · Germany

Purchase of defaulted debts below face value, no supply for consideration

No supply of services for consideration and no economic activity, where the difference between face value and purchase price reflects the actual economic value of the debts at the time of assignment. The purchaser receives no consideration from the assignor. The discount reflects the doubtful nature of the debts and increased default risk, not remuneration. That distinguishes the case from true factoring, where the factor retains a factoring commission and a del credere fee. The exemption and taxable amount questions did not need answering. Confirms that outright purchases of distressed loan portfolios priced at market value fall outside VAT altogether, so no output tax on a notional recovery service and no debate about exemption. Relevant to banks disposing of non-performing loans, debt purchasers and securitisation vehicles, and to their advisers structuring pricing documentation.

C-106/10 Lidl & Companhia

Judgment · 28 July 2011 · Portugal

Vehicle tax in the taxable amount for VAT

A tax such as ISV, whose chargeable event is directly linked to the supply of a vehicle within its scope and which is paid by the vehicle's supplier, falls within "taxes, duties, levies and charges" in point (a) of the first paragraph of Article 78 and must be included in the taxable amount. The qualification is that the decisive point is that the supplier, not the purchaser, is the person liable, so Article 79(1)(c) cannot apply. The Court distinguished De Danske Bilimportorer, there being no direct legal link between ISV and registration. Confirms that national vehicle taxes borne by the supplier form part of the VAT base on the onward supply and on intra-Community acquisitions, so no repayment claims lie for the VAT on the tax element. Relevant to motor dealers, importers, fleet buyers and advisers reviewing invoicing of registration-type charges across Member States.

C-285/10 Campsa Estaciones de Servicio

Judgment · 9 June 2011 · Spain

Open market value as taxable amount for supplies between connected parties

The Sixth Directive did not allow that substitution. Where consideration is agreed and actually paid, the transaction is one effected for consideration and the taxable amount is that subjective consideration, however low and whatever the connection between the parties. The private use valuation rules apply only to transactions free of charge, and equal treatment does not require otherwise because the two are not comparable. A derogating national rule not notified and authorised under Article 27 cannot be enforced against a taxable person. Later authorisation does not cure past periods. Confirms that below market pricing between connected parties is not itself a valuation issue.

C-489/09 Vandoorne

Judgment · 27 January 2011 · Belgium

Bad debt relief under a single-stage tobacco tax label scheme

The Court held that those provisions do not preclude such legislation. Intermediate suppliers under the scheme neither deduct input tax nor owe output tax, so they have no VAT debt capable of refund. That the tax is economically included in the price they paid is irrelevant. Because the taxable amount is fixed by reference to the final retail price, non-payment does not reduce it, and a refund would affect tax revenue at the final consumption stage to a non-negligible extent. Confirms that bad debt relief is structurally unavailable to wholesalers and distributors within Member States operating tax label style single-stage collection for manufactured tobacco.

C-433/09 Commission v Austria

Judgment · 22 December 2010 · Austria

The Austrian standard consumption levy did not belong in the taxable amount

The Court finds the infringement established on that point. By including the standard consumption levy in the taxable amount of the VAT levied on the supply of a motor vehicle, Austria failed to fulfil its obligations under Article 78. The action was dismissed as to the remainder, and each party was ordered to bear its own costs. Part of the small group of judgments on registration and consumption levies in the taxable amount, with De Danske Bilimportorer and Commission v Poland.

C-53/09 Loyalty Management UKand Baxi Group

Judgment · 7 October 2010 · United Kingdom

Third party consideration in loyalty rewards schemes

Economic reality governs. Payments by the scheme operator to redeemers are third party consideration for the supply of goods or services to the customers. It is for the national court to check whether they also cover a separate service to the operator. Payments by the sponsor to an operator which itself supplies the rewards split. The purchase price of the rewards is third party consideration for the supply to customers, and the operator's margin is consideration for scheme management services to the sponsor. In a multi-party points scheme the reward element of the payments made by the operator and by sponsoring retailers and manufacturers is third party consideration, with no input tax deduction for the payer.

C-228/09 Commission v Poland

Judgment · 20 May 2010 · Poland

Poland could include its registration duty in the taxable amount for cars

The Court dismisses the action. Poland did not infringe those provisions by including the duty in the taxable amount. The duty is a charge borne in connection with the transaction rather than a sum paid in the name and for the account of the customer, so it falls within the taxes, duties, levies and charges that Article 78 requires to be included. The Commission was ordered to pay the costs. A useful contrast with De Danske Bilimportorer, where the Danish registration duty stayed outside the taxable amount.

C-311/09 Commission v Poland

Judgment · 6 May 2010 · Poland

Flat-rate VAT on foreign coach operators without deduction

The Court upheld the action. By applying that flat-rate charge Poland failed to fulfil its obligations under Articles 73, 168 and 273 of the VAT Directive. The taxable amount must be the consideration actually received, and the right to deduct input tax incurred for the purposes of taxed transactions cannot be denied. The additional obligations a Member State may impose under Article 273 do not extend to displacing those two rules. A straightforward but firm statement that simplification cannot be bought at the price of the two structural elements of the system. Relevant to any national scheme that substitutes a lump sum or notional base for the real consideration, particularly where it applies only to non-established operators.

C-156/08 Vollkommer

Order · 27 November 2008 · Germany

German land transfer tax on future building work alongside VAT

Ruling by order, the Court held that Article 33 does not preclude that treatment, provided that the tax concerned cannot be characterised as a turnover tax. Article 33 does not forbid the coexistence of VAT with other national taxes on the same transaction. It forbids only taxes that display the essential characteristics of VAT and would therefore compromise the functioning of the common system. The reasoning tracks Renta and the wider Article 401 case law.

C-425/06 Part Service

Judgment · 21 February 2008 · Italy

Abuse where the tax advantage is the principal aim, not the only one

The Court held that there can be a finding of an abusive practice where the accrual of a tax advantage constitutes the principal aim of the transaction or transactions at issue. It is not necessary that the tax advantage be the only purpose pursued. Whether the arrangements before it amounted to abuse was left to the national court to determine in the light of that interpretation, taking account of the artificial nature of the operations and the links of a legal, economic or personal nature between the operators involved. The decisive refinement of Halifax.

C-72/05 Wollny

Judgment · 14 September 2006 · Germany

Taxable amount for private use of a building held wholly in business assets

Article 11A(1)(c) does not preclude fixing the taxable amount at a portion of the acquisition or construction costs determined by reference to the length of the Article 20 adjustment period. Member States have a margin of discretion, provided the aims of Article 6(2), equal treatment with final consumers and correspondence between input deduction and output tax, are respected. Enkler's reference to depreciation does not confine them to national depreciation rules. Land acquisition costs must be included where that acquisition bore VAT which was deducted. Confirms Member States may accelerate the output charge on private use of mixed use immovable property by aligning it with the adjustment period rather than slower depreciation rates, reducing the cash-flow benefit of full allocation to business assets and limiting untaxed final consumption on a later VAT free disposal. Relevant to owner occupiers, professionals and family businesses constructing mixed use buildings, and to advisers modelling the cost of full allocation.

C-98/05 De Danske Bilimportører

Judgment · 1 June 2006 · Denmark

Danish vehicle registration duty is a disbursement, not part of the taxable amount

The Court holds that the duty is not covered by Article 11(A)(2)(a), because the event triggering liability is not the supply of the vehicle but its first registration in national territory. It corresponds instead to an amount received by the taxable person from the purchaser as repayment for expenses paid out in the name and for the account of the latter, within the meaning of Article 11(A)(3)(c), and so falls outside the taxable amount. The judgment sets the practical test for keeping a national charge out of the taxable amount.

C-412/03 Hotel Scandic Gåsabäck

Judgment · 20 January 2005 · Sweden

Taxable amount for staff meals supplied below cost

The Court held that those provisions preclude such a national rule. The deemed-supply rules cover only transactions effected free of charge. Where an actual consideration is paid there is a supply for consideration and the taxable amount is the subjective value actually received, even if below cost. Whether the price exceeds or falls short of cost is irrelevant. A Member State fearing symbolic prices must seek an Article 27 derogation. The employer's own cost is not a subsidy under Article 11A(1)(a), which presupposes three parties. Confirms that below-cost supplies to employees, canteen meals, staff shops, subsidised facilities, are taxed on the price actually charged, not on cost, absent an authorised derogation.

C-144/02 Commission v Germany

Judgment · 15 July 2004 · Germany

Subsidies directly linked to the price, dried fodder aid

The Court dismissed the action. For neither transaction type is the aid directly linked to the price. On sales of dried fodder, the scheme is not one for promoting consumption. It exists to secure Community supply at world market prices, so the price paid already reflects the product's full value. On special-order contracts, the processor must pass the aid to the producer and cannot use it freely, acting as a mere intermediary. The Commission's "legal beneficiary" test was rejected. Confirms that receipt of a subsidy by the party making a taxable supply does not by itself bring it into the taxable amount.

C-381/01 Commission v Italy

Judgment · 15 July 2004 · Italy

Subsidies directly linked to the price, dried fodder aid

The action was dismissed. On sales of purchased fodder, the aid was not paid to enable a particular supply at a reduced price. It allows Community supply at world market prices, so the price charged already reflects full value. On special-order contracts, the processor must pass the aid to the producer and cannot use it freely, acting only as an intermediary. The aid is therefore not consideration for its drying service, and any price reduction for the producer occurs after the taxable supply. Confirms that being the legal recipient of a subsidy is not decisive. Relevant to agri-food processors, cooperatives and any business receiving CAP or similar production aid, particularly where the aid must be passed on to an upstream supplier.

C-495/01 Commission v Finland

Judgment · 15 July 2004 · Finland

Subsidies directly linked to the price, dried fodder aid

The action was dismissed. On sales of purchased fodder, the aid is not paid to enable supply at a reduced price but to allow Community supply at a price comparable to the world market price, so VAT on that price already reflects full value. On special-order contracts, the processor must pass the aid to the producer and cannot use it freely, acting only as an intermediary, so the aid is not consideration for its drying service. Confirms that a subsidy is only in the taxable amount where it is paid specifically so that the supplier can supply particular goods or services, the purchaser benefits through a correspondingly lower price, and the supplier can use the sum freely. Relevant to agri-food processors, intervention agencies and any business receiving grants under a common market organisation or similar pass-through conditions.

C-463/02 Commission v Sweden

Judgment · 15 July 2004 · Sweden

Whether dried fodder aid is a subsidy directly linked to the price

The Court dismissed the action. The aid is not directly linked to the price in either situation. On outright sales, the aid is not paid to enable a particular supply. The scheme secures internal supply and quality, not lower consumer prices, so the price charged already reflects full market value. On special-order contracts, the processor must pass the aid to the producer and cannot use it freely. It acts as intermediary only. The Commission's "legal beneficiary" test was rejected. Economic benefit matters. Confirms that agricultural market-support aid is not automatically taxable simply because the recipient is the taxable person making supplies. Relevant to processors, cooperatives and agri-food businesses receiving CAP or similar aid, and to any grant where the recipient has to remit the funds onward.

C-149/01 First Choice Holidays

Judgment · 19 June 2003 · United Kingdom

Third party payments in the tour operators' margin scheme

The Court held that the margin scheme requires no derogation from the general taxable amount rule. "Total amount to be paid by the traveller" is the same economic element as consideration obtained from the customer or a third party, and cannot be read literally to exclude third party payments. Because the agent's additional payment was a condition of the operator's supply, and commission was computed on the brochure price, there was a direct link with the supply to the traveller. It was not consideration for a separate service to the agent. Tour operators using agency distribution models cannot reduce their margin by routing agent-funded discounts through a top-up payment.

C-398/99 Yorkshire Co-operatives

Judgment · 16 January 2003 · United Kingdom

Manufacturers' money-off coupons and the retailer's taxable amount

The nominal value of the manufacturer's coupon forms part of the retailer's taxable amount. Consideration comprises the cash from the consumer plus the reimbursement from the manufacturer, who is a third party to that sale. The coupon is, to the extent of its value, a means of payment, and the retailer's taxable amount cannot be less than what it actually receives. Following Commission v Germany (C-427/98). The second question therefore fell away. The hypothetical wholesaler scenario was not answered. Confirms for retailers accepting third party discount coupons that reimbursement received from the issuing manufacturer is taxable consideration, not a retrospective reduction of their purchase price, so no input tax adjustment arises and Elida Gibbs relief operates at manufacturer level only. Relevant to FMCG retailers, supermarkets and manufacturers running coupon promotions, and closes off repayment claims built on the cash-only argument.

C-427/98 Commission v Germany

Judgment · 15 October 2002 · Germany

Manufacturers' money-off coupons and reduction of the taxable amount

Germany failed to fulfil its obligations under Article 11 by not permitting adjustment of the taxable amount of the person making the reimbursement. Elida Gibbs is confirmed. The manufacturer's taxable amount is its selling price less the coupon value, with no readjustment for intermediate transactions. The retailer's taxable amount remains the full retail price, including the manufacturer's reimbursement. Where the retail supply is exempt (export or intra-Community) or the customer is a deducting trader, Member States may use Article 11(C)(1) and Article 20(1)(b) to prevent over-deduction. Confirms that coupon-issuing manufacturers may reduce output tax on redemption regardless of the length of the distribution chain, and that no corrective invoicing or input tax adjustment down the chain may be imposed as a precondition. Relevant to FMCG manufacturers, retailers and their advisers designing promotional schemes, and to retailers accounting for the full price including third party reimbursement.

C-498/99 Town & County Factors

Judgment · 17 September 2002 · United Kingdom

Binding in honour only, and the taxable amount for competition entry fees

A supply effected for consideration is taxable even where the provider is bound in honour only. The unenforceability itself flows from an agreement, which is the very expression of a legal relationship, and any other view would fracture the Directive between legal systems and invite avoidance. The taxable amount is the full entry fees where the organiser has them freely at his disposal. Glawe is confined to stakes segregated and reserved for winnings under mandatory statutory payout rules. Relevant to gaming, betting, prize competition and promotional operators, and to any business using honour clauses or comfort arrangements.

C-62/00 Marks & Spencer

Judgment · 11 July 2002 · United Kingdom

Retroactive curtailment of the period for reclaiming overpaid VAT

Such retroactive curtailment is incompatible with both effectiveness and legitimate expectations. A three year limitation period running from payment is itself reasonable, and a Member State may shorten the period, but only if the new legislation includes transitional arrangements giving an adequate period after enactment to bring claims that were available under the old rules. Budgetary planning does not justify otherwise. Correct implementation does not exhaust a directive's effects. Taxable persons may still rely on Article 11A(1) where full application is not in fact secured. The reference point for any legislated shortening of a domestic VAT repayment window. Relevant to advisers running historic overpayment claims following a Court ruling, and to assessing national capping and limitation provisions generally.

C-353/00 Keeping Newcastle Warm

Judgment · 13 June 2002 · United Kingdom

Third party grants as consideration in the taxable amount

The Court held that such a sum forms part of the consideration for the supply of services and therefore part of the taxable amount. While a payment by a public authority to a subsidised operator may amount to a subsidy under Article 11A(1)(a), the decisive point is that the sum was received in return for the service supplied to the householders. Whether the payment also qualifies as a subsidy directly linked to the price then need not be settled. Confirms that the subsidy wording in Article 73 does not create an escape route. Relevant to grant funded installers, energy efficiency and home improvement schemes, and any operator delivering services free at the point of use under public funding.

C-184/00 Office des produits wallons

Judgment · 22 November 2001 · Belgium

Subsidies directly linked to the price in the taxable amount

Only subsidies which constitute the whole or part of the consideration for a supply of goods or services, paid by a third party to the seller or supplier, are directly linked to the price. It is immaterial whether a distinct service is rendered to the grantor. Merely affecting the cost price is insufficient. The subsidy must be paid specifically to enable particular supplies, with the purchaser's price falling in proportion. The national court must decide on the facts. The note matters for subsidised bodies in culture, agriculture, promotion and the wider non-profit sector, and for their advisers dealing with grant funding.

C-380/99 Bertelsmann

Judgment · 3 July 2001 · Germany

Taxable amount of bonuses in kind given for introducing new customers

The Court held that the taxable amount includes the delivery costs as well as the purchase price, where those costs are paid by the supplier of the bonus. Article 11A(2)(b) was inapplicable because the transport costs were not charged to the recipients, so the answer turned on Article 11A(1)(a). Delivery was incidental to the supply of the bonus, forming a single transaction, and the subjective value is everything the recipient of the introduction service spent to obtain it. Relevant to any business running member-get-member, referral or loyalty schemes rewarded in goods.

C-86/99 Freemans

Judgment · 29 May 2001 · United Kingdom

Timing of a discount credited to a customer's account

The taxable amount is the full catalogue price, reduced under Article 11C(1) only when the customer actually withdraws the credited discount or uses it in another way. A legal entitlement at the time of supply is not enough for Article 11A(3)(b). Nothing had actually been paid or deducted then. Article 11C(1) does not require a subsequent variation of the contract, but crediting an internal account is not payment, since unclaimed sums are retained by the supplier. Glawe, where stakes were genuinely paid out, is not transposable. Relevant to mail order, catalogue and agency-based retailers, and to any supplier operating loyalty or cashback credits within a credit or instalment scheme.

C-322/99 Fischer and Brandenstein

Judgment · 17 May 2001 · Germany

Private allocation of business goods bought without deduction, taxing subsequent component parts

No tax arises on the goods themselves where input VAT was not deductible on acquisition. Tax under Article 5(6) applies only to component parts. Goods (not services, nor services with ancillary goods) which definitively lose their physical and economic distinctiveness on incorporation and produce a lasting increase in value not entirely consumed at the time of allocation. The taxable amount is the price of those component parts at allocation. Where work falls outside that concept, the deduction must be adjusted under Article 20(1)(b) unless its value was fully consumed in the business. Confirms the practical framework for withdrawals of second-hand assets bought from private persons, relevant to motor dealers, professionals with business cars, and any business allocating margin-scheme or non-deductible assets to private use.

C-34/99 Primback

Judgment · 15 May 2001 · United Kingdom

Taxable amount where a retailer offers interest-free credit funded by a third party

The taxable amount is the full amount payable by the purchaser. The relationship between seller and purchaser must be distinguished from that between seller and finance house. The commission is consideration for an exempt service supplied to the retailer and does not reduce the basis of assessment, as in Bally. Since the price did not vary with the method of payment, it contained no separable credit element. Any credit element would in any event be ancillary to the sale of goods. Retailers offering "interest-free" or "0%" finance through third-party lenders must account for VAT on the full advertised and invoiced price, treating the lender's commission as a business cost, exactly as with credit card merchant charges.

C-404/99 Commission v France

Judgment · 29 March 2001 · France

Compulsory service charges in the taxable amount

France infringed Articles 2(1) and 11A(1)(a). A compulsory service charge included in the price demanded from the customer forms part of the consideration actually received and must be in the taxable amount. Article 11A(3) is the only permitted exclusion and does not cover it. The conditions attached to the concession are irrelevant, as are its history and social aim, and its limited take-up. Voluntary tips paid spontaneously to staff were outside the action. Confirms that in hospitality, hairdressing, transport, care homes and similar sectors, any compulsory service supplement shown on the bill is taxable in full, whatever domestic administrative tolerance exists and however the sums are passed to staff.

C-85/97 SFI v Belgian State

Judgment · 19 November 1998 · Belgium

Limitation period start date and foreign VAT in the taxable amount of a benefit in kind

The Sixth Directive contains no rule on when the limitation period for recovery starts, so the point is for national law. Fixing it at the first return date after registration is compatible with Articles 4 and 10, and the different treatment of the authorities and the taxable person does not breach equality because the authorities lack the information until the return. However, the First and Sixth Directives preclude including foreign VAT in the taxable amount where domestic VAT would have been excluded. No ruling on Article 95 was needed. Limitation and time bar arguments built on the chargeable event will not succeed. Relevant to groups leasing vehicles cross border and to advisers reviewing Belgian style normal value rules for employee benefits.

C-308/96 Madgett andBaldwin

Judgment · 22 October 1998 · United Kingdom

Application of the travel agents' margin scheme to hoteliers and the split of mixed packages

The scheme applies by reference to the nature of the transactions, not the trader's formal classification, so it caught the hotelier offering return transport from distant pick-up points and an excursion in a package. Bought-in services that are traditional hotelier tasks, take up a small proportion of the price and are merely a means of better enjoying the accommodation remain ancillary and stay outside it. In mixed packages the scheme applies only to the bought-in services, and a trader cannot be required to use actual costs where market value of comparable services is identifiable. Anyone bundling third-party travel elements into their own supply, hoteliers, resorts, language schools, conference and event organisers, must test whether the bought-in element is genuinely ancillary or substantial enough to trigger the margin scheme.

C-172/96 First National Bank of Chicago

Judgment · 14 July 1998 · United Kingdom

Foreign exchange dealing as a supply of services and its taxable amount

Currencies used as legal tender are not tangible property, so such dealings are supplies of services, and they are effected for consideration even without commission, because the bank's remuneration is built into the rates it quotes. The taxable amount is not the currencies transferred, nor the notional bid/offer spread on a single deal, but the overall result of the supplier's transactions over a given period. It does not matter that neither party knows the amount at the time or afterwards. Confirms that spread-based currency dealing falls within the VAT system and generates a taxable amount, so it counts in partial exemption calculations and, where counterparties are outside the Community, can support deduction under Article 17(3)(c). Relevant to advisers designing or negotiating special partial exemption methods for financial institutions with mixed exempt and non-Community business.

C-283/95 Fischer

Judgment · 11 June 1998 · Germany

Unlawful gambling and the gaming exemption

The unlawful operation of roulette falls within the scope of the Directive. Only goods incapable of lawful marketing are excluded, and unlawful gaming competes with lawful gaming. But fiscal neutrality also governs the exercise of the Member State's power to set conditions and limitations under Article 13(B)(f). A Member State may not tax unlawful gaming where the corresponding activity carried on by a licensed public casino is exempt. The valuation questions therefore fell away. Confirms that illegality does not remove gambling from VAT, while barring tax authorities from using the exemption's national conditions to tax unlicensed operators when licensed casinos are exempt for the same game. Relevant to gaming operators and their advisers, and to any sector where an exemption is drafted by reference to licensing or authorisation status.

C-116/96 Reisebüro Binder

Judgment · 6 November 1997 · Germany

Apportioning the consideration for cross-frontier passenger transport

Article 9(2)(b) requires that, where cross-frontier passenger transport is supplied for an all-inclusive price, the total consideration be allocated between the Member States concerned pro rata to the distances covered in each. The place of supply rule does not itself govern the taxable amount, which remains subject to Article 11A(1)(a), but it dictates the allocation where a single all-inclusive amount must be split. Stopping and waiting times are not a permissible allocation factor. Coach and cross-border passenger transport operators selling all-inclusive tours cannot allocate turnover by reference to time spent, vehicle operating hours or cost incidence in each State.

C-63/96 Skripalle

Judgment · 29 May 1997 · Germany

Minimum taxable amount for supplies between associated persons

Such an authorisation does not cover cases where the agreed consideration represents the market rate but falls short of the minimum basis of assessment. Anti avoidance derogations must be strictly construed and may depart from Article 11 only so far as strictly necessary. Where objective facts show the taxable person acted properly, no risk of evasion or avoidance arises. The need for abstract drafting does not save the rule, and an authorisation granted to prevent avoidance cannot be re-justified as a simplification measure. Confirms that cost based minimum valuation rules for connected party supplies cannot be applied where the price charged is demonstrably at market rate.

C-288/94 Argos Distributors

Judgment · 24 October 1996 · United Kingdom

Taxable amount where goods are paid for with discounted vouchers

The consideration is the sum actually received by the supplier on selling the voucher, not its face value. The relevant transaction for valuing the voucher is the earlier sale of the voucher itself. The voucher merely evidences the supplier's obligation to accept it at face value. That the redeeming customer does not know the real money equivalent is irrelevant. The burden of proving the discount attributable to each voucher falls on the supplier. Retailers and others issuing their own vouchers at a discount to bulk purchasers can compute output tax on redemption by reference to what they actually received, provided they can evidence it. Relevant to retail, incentive and loyalty scheme operators and to anyone distributing single purpose style vouchers through intermediaries at below face value.

C-317/94 Elida Gibbs

Judgment · 24 October 1996 · United Kingdom

Manufacturers' money-off and cash-back coupons, reduction of the taxable amount

In both schemes the taxable amount is the manufacturer's selling price less the amount stated on the coupon and actually refunded, and it makes no difference whether the goods went first to a wholesaler or straight to a retailer. The tax authorities may not collect more than the VAT ultimately borne by the final consumer. The intermediate transactions are not adjusted. Wholesalers' and retailers' taxable amounts remain unchanged, neutrality being preserved through the ordinary deduction rules. The foundational authority for manufacturer-level discounts granted outside the contractual chain.

C-230/94 Enkler

Judgment · 26 September 1996 · Germany

Hiring out a motor caravan, economic activity and private use

Hiring out tangible property is exploitation of that property and is an economic activity only where done to obtain income on a continuing basis. Occasional activity is excluded. Where goods are by nature capable of both business and private use, the national court must weigh all the circumstances, including comparison with how the activity is normally carried on commercially, and duration, customer numbers and earnings. The taxable amount for deemed private use includes expenses relating to the goods themselves or on which VAT was deductible, for availability periods, apportioned by reference to actual non-business use over total actual use. Confirms that registration and a declared intention are not enough.

C-62/93 BP Supergas

Judgment · 6 July 1995 · Greece

Special petroleum VAT regime and the right to deduct

The regime is precluded because Article 11 requires taxation at each marketing stage on the value at that stage, and the right of deduction may be limited only by derogations expressly provided for. Greece's transmission of the whole draft law, without a notification expressly referring to Article 27(2), did not secure Council authorisation. The general exemption for transport and storage exceeded Article 14. The taxable amount and deduction provisions have direct effect, and refunds run retroactively, subject to national procedural rules meeting equivalence and effectiveness. Confirms that sector specific regimes replacing staged taxation with a single upstream charge, and stripping the sector of deduction, are unlawful absent a properly notified Article 27 derogation.

C-33/93 Empire Stores

Judgment · 2 June 1994 · United Kingdom

Taxable amount of goods given for introducing a new customer

The taxable amount for the article supplied without extra charge is distinct from that for the goods bought by the new customer. The article is given in return for the introduction service, not for the purchase, and the additional conditions attached do not break that direct link. The consideration is subjective, being what the recipient of the service was prepared to spend, which here is the price the supplier paid for the article. Cost price, not a notional retail value, fixes the taxable amount where goods reward a service rendered to the supplier. Relevant to mail order and direct selling businesses, and to any introducer, referral or member-get-member reward scheme where goods rather than cash are given.

C-38/93 Glawe

Judgment · 5 May 1994 · Germany

Taxable amount for gaming machines, stakes less statutory winnings

The Court held that the taxable amount excludes the statutorily prescribed proportion of total stakes corresponding to winnings paid out to players. The consideration actually received by the operator is only the proportion of the stakes he can take for himself, namely the coins falling into the cash box. The reserve merely replenishes money he originally provided. The qualification is that the payout proportion was mandatorily fixed in advance by law. The remaining questions did not require an answer. Operators of gaming and slot machines account for VAT on their net retention, not on gross stakes, where the payout percentage is fixed by statute.

C-193/91 Mohsche

Judgment · 25 May 1993 · Germany

Taxable amount for private use of a business car

The expression "use of goods" must be construed strictly, covering only use of the goods themselves, because private use is taxed only exceptionally to prevent non-taxation of assets on which input tax was deducted. Ancillary services for maintenance or use, acquired without deduction of input tax, therefore fall outside Article 6(2)(a) and cannot be brought into the taxable amount. The prohibition is unconditional and sufficiently precise, so it may be invoked directly before national courts. Confirms that the deemed self-supply charge on private use of business assets is limited to the asset itself, so costs bearing no deductible input tax, insurance, road tax, garage and parking charges, must be stripped out of the taxable amount.

C-18/92 Bally

Judgment · 25 May 1993 · Belgium

Credit card commission and the taxable amount on retail sales

The Court held that the commission retained by the card issuer forms part of the taxable amount on which the supplier must account for VAT. There are two separate transactions: the sale of the goods, and the exempt service supplied by the card issuer to the supplier, in respect of which the purchaser is a third party. The taxable amount cannot vary according to the means of payment, nor differ from the amount on which VAT was charged to the customer. The second question did not arise on the referring court's findings. Confirms the basic retail position. Relevant to any retailer, and to modern payment service and marketplace arrangements where the intermediary settles net of its commission.

C-131/91 'K' Line Air Service Europe

Judgment · 9 July 1992 · Belgium

Minimum taxable amount on second-hand car sales between taxable persons

The Directive precludes such a minimum taxable amount. Article 32 covers only goods on which VAT has been definitively borne and which risk being taxed twice. It does not extend to used capital goods where the seller deducted input VAT on acquisition, so no double taxation arises. Nor is the measure a permissible Article 27 derogation. Replacing the agreed price altogether is a general and systematic departure exceeding what is strictly necessary. Articles 9 to 11 EEC were irrelevant, the transaction being purely internal. Confirms that the taxable amount for business-to-business sales of used business assets is the actual consideration, not an administratively fixed percentage of list price.

C-20/91 De Jong

Judgment · 6 May 1992 · Netherlands

Private land and self-supply of a dwelling built in the course of business

Only the house, not the land, is regarded as applied for private use. Land acquired solely for private requirements is acquired in a private capacity and never becomes a business asset, whatever national law says about land and buildings being inseparable. The equal treatment purpose of Article 5(6) confirms this. An ordinary consumer engaging a third party builder would bear VAT only on the house. The taxable amount is therefore the value of the building alone. Remaining questions not answered. Fixes the boundary between private and business assets for self-build and own-use construction by builders, developers and tradespeople.

C-119/89 Commission v Spain

Judgment · 26 February 1991 · Spain

Residual VAT on imports by non-taxable persons

Spain failed to fulfil its obligations under Article 95. Reliance on the direct effect of Article 95 is only a minimum guarantee and does not discharge a Member State from legislating clearly. Leaving importers uncertain and officials free not to apply the deduction is itself discriminatory. Arguments based on the nature of VAT, apportionment of revenue between Member States, pending harmonisation under Article 99 and other Member States' indirect taxes were all rejected. A pre-single-market ruling of continuing structural interest.

C-126/88 Boots Company

Judgment · 27 March 1990 · United Kingdom

Money-off coupons issued free and the taxable amount

Where the retailer accepts a coupon which it had itself given to the customer free of charge on an earlier purchase made at the normal retail price, the difference between the normal retail price and the cash actually received is a price discount or rebate within Article 11A(3)(b) and is outside the taxable amount. The coupon is not acquired for consideration. Its stated nominal value merely expresses the reduction promised. The Court did not need to answer the remaining questions. Confirms that self-funded money-off coupons issued free reduce the taxable amount to the cash actually taken, so retailers need not account for VAT on open market value. Relevant to retail, FMCG and loyalty promotion schemes, and to advisers structuring manufacturer-funded versus retailer-funded coupon arrangements.

C-230/87 Naturally Yours Cosmetics

Judgment · 23 November 1988 · United Kingdom

Non-monetary consideration in discounted promotional supplies

The taxable amount is the money paid plus the value of the service supplied by the retailer, being the procuring or rewarding of the party organiser. That value equals the difference between the price actually paid and the normal wholesale price. The qualification is that this applies only where there is a direct link, evidenced here by the obligation to return the goods or pay the full wholesale price if no party is held, a matter for the national court to verify. Consideration need not be monetary but must be expressible in money and is subjective. The judgment underpins the standard treatment of barter and part-exchange arrangements.

C-138/86 Direct Cosmetics Ltd v Commissioners of Customs and Excise

Judgment · 12 July 1988 · United Kingdom

Derogating measures against tax avoidance in direct selling structures

Avoidance under Article 27(1) is an objective Community law concept requiring no intention, unlike evasion, so a derogation may apply to a trader acting purely for commercial reasons. The measure may be confined to some traders selling to non-taxable resellers, provided the difference in treatment rests on objective circumstances, such as whether such sales are substantial and continuing rather than occasional. The Council decision is valid. Open-market value means the value closest to the actual price paid by the final consumer. Relevant to direct selling, party-plan and agency models, and to any structure interposing unregistered resellers between supplier and consumer.

C-391/85 Commission v Belgium

Judgment · 4 February 1988 · Belgium

List price as taxable amount recast as a registration tax

The Court declared Belgium in breach. It had not taken the measures necessary to comply with the 1984 judgment. The offsetting mechanism created a direct link making the registration tax supplementary to, not independent of, VAT. It covered the same goods, at the same rate, on the list price. That different persons are formally liable and that registration is a distinct legal event are matters of pure fiscal technique. Anti-evasion justification was again rejected as disproportionate. Confirms that the taxable amount rules cannot be circumvented by relabelling a charge as a non-VAT tax where its base, rate and scope shadow VAT and it is offset against VAT. Relevant to motor vehicle registration and similar national charges, and to advisers assessing whether a domestic levy is an independent tax or a supplement to VAT.

C-16/84 Commission v Netherlands

Judgment · 10 July 1985 · Netherlands

Trade-in allowances and the taxable amount for second-hand goods

The application was dismissed. The scheme neither aimed at nor had the effect of exempting part of the consideration for the new goods. Its object and effect were to offset residual VAT already borne by the traded-in goods so that they could be taxed normally on resale. It was therefore covered in principle by Article 32 and did not infringe Article 11. Further Commission complaints about the scheme's scope were not examined, having been raised only after rejecting the Netherlands' offer of adjustments. Confirms that a margin-equivalent relief may be given at the trade-in stage rather than at resale, provided it merely neutralises residual VAT embedded in the used goods.

C-17/84 Commission v Ireland

Judgment · 10 July 1985 · Ireland

Trade-in allowances and the taxable amount for second-hand goods

The Court dismissed the action. The Irish rule only appears to reduce the taxable amount of the goods supplied. Its object and effect are to offset the residual VAT already borne by the traded-in second-hand goods, so that those goods can be taxed normally on resale without distorting competition with direct consumer-to-consumer sales. It was therefore covered by Article 32 and did not infringe Article 11. That it applied only to trade-ins, and could cost the Exchequer where resale price falls below trade-in price, was immaterial. Of historical interest now that the margin scheme is harmonised, but it remains the leading authority for reading the consideration rule (Article 73) in the light of the purpose of the second-hand goods regime. Relevant to advisers on motor trade part-exchanges and on any national relief whose form departs from the Directive's while its effect matches it.

C-47/84 Staatssecretaris van Financiën v Schul

Judgment · 21 May 1985 · Netherlands

Residual VAT on goods imported by a private individual from another Member State

The residual export-State VAT still incorporated in the value of the goods must be excluded from the taxable amount on importation and, in addition, deducted from the import VAT payable. That residual amount equals the VAT actually paid in the exporting Member State, reduced in proportion to any depreciation in the value of the goods since it was charged, or, where the value has increased, the full amount actually paid. The importer bears the burden of proof. The ruling fixes the mechanics of the Schul correction pending legislation.

C-5/84 Direct Cosmetics

Judgment · 13 February 1985 · United Kingdom

Notification of derogating measures under Article 27

Deleting the revenue protection condition was a substantial change, since it severed the visible link with the derogations permitted by Article 27(1) and widened the authorities' powers indefinitely. It therefore required fresh notification to the Commission. A Member State which failed to notify such a derogation from Article 11A(1)(a), and so obtained no Council authorisation, cannot rely on it against a taxable person invoking the national provisions implementing Article 11A(1)(a). Establishes that derogations must be notified in the precise terms adopted.

C-324/82 Commission v Belgium

Judgment · 10 April 1984 · Belgium

Catalogue price as a minimum taxable amount for cars

The Court held Belgium in breach. Measures notified under Article 27(5) to combat evasion or avoidance may derogate from Article 11 only within the limits strictly necessary, and may include flat rate elements. Belgium could legitimately identify a fraud risk in the car sector, but taking the catalogue price as the starting point for all new cars, and excluding any rebate or discount, was an absolute and systematic derogation and disproportionate. The claim failed as regards taxation of private use of demonstrator cars, the Commission not having disproved genuine simplification. An early confirmation that grandfathered national derogations are not immune from review, and that anti-evasion measures, like simplification measures, must be proportionate and confined to what is strictly necessary. Relevant to advisers dealing with motor trade valuation rules, demonstrator and own use vehicles, and any legacy Member State derogation.

C-222/81 Bausystem v Finanzamt München für Körperschaften

Judgment · 1 July 1982 · Germany

Interest for late payment awarded by a court is outside the taxable amount

The Court held that such interest is not part of the taxable amount. It has no connection with the services provided and is not consideration for a commercial transaction. It is compensation for delay in payment. The supplier was forced to accept a delay not provided for in the contract, and the interest was fixed by a court under the Civil and Commercial Codes. The resulting grant of credit is only remotely connected to the main supply, so the interest is not a supplementary payment. The point remains the standard reference for treating judicially awarded late payment interest as outside the taxable amount, of relevance to construction and other sectors with contested final accounts and litigated retentions.

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