Keywords
Summary

Keywords

Tax provisions – Harmonisation of legislation – Turnover taxes – Common system of value added tax – Taxable transactions – Supplies of goods and services effected for consideration – Meaning – Transactions where the consideration is lower than the cost price of the goods or services – Included – National rule whereby such transactions are regarded as an application of goods or services for private use – Not permitted

(Council Directive 77/388, Arts 2, 5(6) and 6(2))

Summary

Articles 2, 5(6) and 6(2)(b) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, Articles 5(6) and 6(2)(b) of which treat, for the purposes of the imposition of value added tax, certain transactions for which no consideration is actually received by the taxable person as supplies of goods and provisions of services effected for consideration, must be interpreted as precluding a national rule whereby transactions in respect of which an actual consideration is paid are regarded as an application of goods or services for private use within the meaning of the latter provisions, even where that consideration is less than the cost price of the goods or services supplied.

The fact that the price paid for an economic transaction is higher or lower than the cost price is irrelevant to the question whether a transaction is to be regarded as a ‘transaction effected for consideration’ within the meaning of Article 2. The latter concept requires only that there be a direct link between the supply of goods or the provision of services and the consideration actually received by the taxable person. Accordingly, where the transaction in question is effected for consideration, there is no reason to apply Articles 5(6) and 6(2)(b), since those provisions relate only to transactions effected free of charge.

(see paras 22-24, 30, operative part)