The EU VAT Treatment of Vouchers (FM nr. 157) 2019/6.3.3.1:6.3.3.1 Taxation of the application and the use of capital assets

The EU VAT Treatment of Vouchers (FM nr. 157) 2019/6.3.3.1

6.3.3.1 Taxation of the application and the use of capital assets

Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.Deze functie is alleen te gebruiken als je bent ingelogd.

For the purposes of VAT, ‘application’ shall mean removing the good or goods from the business. They will no longer qualify as business assets, as they are taken from the business as such. This is different from ‘use’, which applies to goods that remain business assets but where these business assets are (also) used for consumptive purposes. Also, I will only focus on the application and use of business assets for no consideration. The rules described in this subsection do not apply to immovable property forming part of the business assets of a taxable person and used both for purposes of the taxable person’s business and for his private use or that of his staff, or, more generally, for purposes other than those of his business.1

The taxation of the application of goods, as laid down in Article 16 of the EU VAT Directive, reads as follows (underlining by me, JB):2

“The application by a taxable person of goods forming part of his business assets for his private use or for that of his staff, or their disposal free of charge or, more generally, their application for purposes other than those of his business, shall be treated as a supply of goods for consideration, where the VAT on those goods or the component parts thereof was wholly or partly deductible.

However, the application of goods for business use as samples or as gifts of small value shall not be treated as a supply of goods for consideration.”

The taxation of the private use (not application) of goods, as laid down in Article 26 of the EU VAT Directive, reads as follows (underlining by me, JB):3

“Each of the following transactions shall be treated as a supply of services for consideration:

(a) the use of goods forming part of the assets of a business for the private use of a taxable person or of his staff or, more generally, for purposes other than those of his business, where the VAT on such goods was wholly or partly deductible;

(b) (…)

Member States may derogate from paragraph 1, provided that such derogation does not lead to distortion of competition.”

I will now discuss the EU VAT provisions regarding the private use and application of goods and services more generally, after which I continue to examine the EU VAT treatment of the application and use of capital assets in Section 6.3.3.4.

Deze functie is alleen te gebruiken als je bent ingelogd.