ECJ - Recent Developments in Value Added Tax

S. 70I. Introduction

Title III of the VAT Directive is ‘Taxable persons’. It comprises: Article 9, which defines the entities which constitute taxable persons as those engaged in ‘economic activities’; Article 10, defining who acts independently; Article 11 on single taxable persons (VAT Groups); Article 12 on occasional supplies; and Article 13 dealing with bodies governed by public law (public bodies). As VAT is a tax on consumption expenditure, it is not really correct to state that these provisions define the tax subjects. The tax subjects are those burdened with the VAT, and not (necessarily) those collecting the tax on behalf of government. Yet, Title III defines those entities that are subject to the rules in the VAT Directive in the sense that they have to account for VAT on their sales and in that regard the scope of the common system of VAT.

Despite their central role in the EU VAT system, a number of key issues regarding the abovementioned provisions have been, and still are, unclear. When are individuals who are engaged in a hobby, or selling property they own, considered to be taxable persons for VAT purposes? If an occasional sale is deemed to be subject to VAT in a Member S...