CJEU – Recent Developments in Value Added Tax 2014

S. 87Taxable Supplies

Marie Lamensch

I. S. 88Introduction

All supplies of goods and services made for consideration by a taxable person acting as such in the European Union (“EU”) are, in principle, subject to EU value-added-tax (“VAT”). A taxable transaction typically consists of a commercial transaction between two distinct persons, but there may also be a taxable supply when a taxable person uses or applies business assets for non-business purposes, or when a taxable person retains business assets when ceasing his economic activity. In contrast, there are also a number of exceptions to the broad application of EU VAT. For example, strictly illegal transactions simply fall outside of its scope. In addition, the VAT Directive explicitly excludes a series of transactions for reasons of simplification. One example is the transfer of business assets by a taxable person to another Member State, not for consumption in that Member State but for the purpose of carrying out “work on them” before returning them to the Member State of origin, which will not be treated as a taxable supply under the VAT Directive. Finally, some taxable transactions are exempt (discussed elsewhere).

Among taxable transactio...