4.2.2 The ‘concrete and specific’-test: more rules from the CJEU?

There has been a lot of discussion and disputes around the question whether different elements to a single, composite supply, can have their own VAT treatment, even though only one (composite) supply is made. CJEU case law was interpreted in such a way that if an element to a composite supply constituted a ‘concrete and specific aspect’ of that composite supply, this aspect could have its own VAT treatment.1

The CJEU cases that were interpreted as allowing separate VAT treatment of ‘concrete and specific’ elements to a single, composite supply (Commission v France and Talacre Beach Caravan Sale) hinge specifically and explicitly upon the right of a Member State to apply multiple VAT consequences to a single supply in cases where these Member States had a right, and not an obligation, to apply the VAT consequence that differs from the standard VAT treatment. In both cases, the Member States required taxable persons to apply these multiple VAT treatments to a single, composite supply. Other elements of the supply were (explicitly) excluded from this specific VAT treatment. Taxable persons seemed not to have a choice in the matter. In both cases, the CJEU ruled that the Member States had the right to require exactly that of taxable persons performing those transactions within their jurisdictions.

This was confirmed by the CJEU in the Stadion Amsterdam-case, a case about a guided tour through a football stadium, that ended in the football club’s museum, where the taxpayer argued that at least part of the service (granting entry to a museum) qualified as VAT exempt. The CJEU disagreed. It held that “… a single supply, such as that at issue in the main proceedings, comprised of two distinct elements, one principal, the other ancillary, which, if they were supplied separately, would be subject to different rates of value added tax, must be taxed solely at the rate of value added tax applicable to that single supply, that rate being determined according to the principal element, even if the price of each element forming the full price paid by a consumer in order to be able to receive that supply can be identified”.2 This ruling ended the discussion about treating ‘concrete and specific elements’ to a composite supply separately. It is now clear that this can only be done in exceptional cases, determining whether the selective application of a reduced rate of VAT complies with the relevant EU VAT rules.3