4.3 Multiple-element supplies made by multiple suppliers

As a general rule, supplies made by separate taxable persons that are acting as such cannot be considered a single, composite supply (either through absorption or amalgamation).1 In my view this makes sense, because the different taxable persons should be liable for the VAT treatment and the VAT consequences of their own supplies. It is hard to imagine that a supply made by one supplier is not considered an aim in itself, but a means of better enjoying a supply made by another supplier. This is confirmed in CJEU case law, where one of the main tests for establishing whether a multiple-element transaction should be considered one single, composite supply or not is whether the relevant elements can be performed by a third party.2

Separate legal entities performing separate supplies can perform a composite supply from a VAT perspective if they are part of a VAT group under Article 11 of the EU VAT Directive, because then they are considered a single taxable person.3

The only instance that I have come across, where separate taxable persons that do not present themselves to (potential an existing) customers as a single entity can jointly perform a single, composite transaction is under an ‘agreement to jointly make supplies’ (in Dutch: ‘partage overeenkomst’). However, this Dutch interpretation of the VAT rules may not be fully in line with the EU VAT system.4

This means that in my view, where separate businesses make joint supplies, these supplies should always be considered separate taxable transactions and treated as such from a VAT perspective.