2.6 The CJEU’s use of economic and/or commercial reality

The CJEU applies the concept of ‘economic reality’, ‘commercial reality’ and ‘economic and commercial reality’ for deciding cases that contain three main categories. The first category concerns cases where the CJEU provides criteria for determining whether the facts of a case should be qualified as ‘abuse of law’. The second category concerns cases where the CJEU provides criteria for determining whether a supply that consists of multiple elements should be considered as the supply of those separate elements as such or as a single, composite supply. The third category concerns cases where the ‘economic and commercial reality’ of a transaction deviates from the ‘legal reality’ of that transaction (i.e. what parties to that transaction have legally agreed). In these cases, taxation is based on the economic and commercial reality of the transaction because using legal reality as a basis would not lead to ‘appropriate taxation’. This can be considered as a ‘substance over form’ interpretation of the relevant transaction. I will briefly discuss these categories before looking into the remaining cases where the CJEU has used economic and/or commercial reality.