6.4.5 VAT treatment of free services that are samples or of small value

The relevant provision in the EU VAT Directive regarding the taxation of services that are supplied free of charge by a taxable person for his private use or for that of his staff or, more generally, for purposes other than those of his business does not include a specific exception to this rule for the supply of services that qualify as samples or services that are of small value.1

As explained above, contrary to the provision regarding the application of goods, which contains an exception for samples and gifts of low value, the provisions regarding services only apply where the free services are used for purposes other than those of the business of the taxable person. It should be clear from the above that free samples should always qualify as being provided for the purpose of the business of the taxable person.

With regard to the supply of free services that can be qualified as gifts of small value (and that are provided free of charge for other purposes than those of the business), I do not see why these should be treated differently from goods. There is no rational explanation for this difference. I would therefore strongly argue for an adjustment to the relevant provision, ensuring that services that qualify as gifts of small value should not be taxed. Examples of these services could be the supply of free warm meals at a place of work or the use of a company bicycle for a private journey, e.g. to a shop to get lunch.