3.5.1 Taxable person

According to the EU VAT Directive, ‘taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.1 Any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity. The CJEU has consistently ruled that for any activity to be considered an ‘economic activity’, the purpose of the activity should be obtaining income therefrom on a continuing basis (i.e. by not performing the activities only on an occasional basis), and that this does not only apply to the exploitation of tangible or intangible property.2

As a general rule, every person performing economic activities qualifies as a taxable person independently. However, each Member State may regard as a single taxable person any persons established in the territory of that Member State who, while legally independent, are closely bound to one another by financial, economic and organisational links.3 This type of ‘composite’ taxable person is usually referred to as VAT group. The allocation of resources and financial means within a VAT group are not subject to VAT. Because the concept of a VAT group is not relevant for this research, I will not further elaborate on this concept or its VAT consequences.