TaxTMI 
TaxTMI 
2005 (1) TMI 672
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.... a taxable person acting as such' is subject to value added tax ('VAT'). 4. Article 11A(1)(a) of the Sixth Directive states that, as a general rule, the taxable amount for supplies of goods and services is 'everything which constitutes the consideration which has been or is to be obtained by the supplier from the purchaser, the customer or a third party for such supplies including subsidies directly linked to the price of such supplies'. 5. Article 5(6) of the Sixth Directive provides: 'The application by a taxable person of goods forming part of his business assets for his private use or that of his staff, or the disposal thereof free of charge or more generally their application for purposes other than those of his business, where the value added tax on the goods in question or the component parts thereof was wholly or partly deductible, shall be treated as supplies made for consideration. However, applications for the giving of samples or the making of gifts of small value for the purposes of the taxable person's business shall not be so treated.' 6. With respect to the application of goods in the manner defined in Article 5(6), Articl....
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....the service is offered either free of charge or for a consideration which is less than the value calculated pursuant to Paragraph 3(2)(b) in Chapter 7 of the law and where that reduction is not dictated by market conditions. It follows from the latter provision that that value is the cost of the service at the time of the 'application'. 11. The first subparagraph of Paragraph 2 in Chapter 7 of the Swedish law provides that the taxable amount for the supply of goods or services applied in this way is the value calculated pursuant to Paragraph 3(2)(a) or (b) in Chapter 7 of that law. The main proceedings and the questions referred for a preliminary ruling 12. Scandic carries on its business in the hotel and restaurant sectors in Sweden. It offers its staff of approximately 25 persons lunch at a fixed price in a canteen specially set up by the company. 13. For that meal, the members of staff pay a price which exceeds the cost incurred by Scandic. However, it is possible that, in future, the price will be lower than the cost. Wishing to ascertain the tax implications of providing meals to its staff, Scandic asked the Skatterättsnämnden (a special commissio....
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....ansfers goods to a third party for a consideration less than the purchase value of the goods or of similar goods or, if no such value is available, the cost price? 2. In the event that the Regeringsrätten finds, when the case is decided, that the company's supplies are food dispensing services, are Article 2 and Article 6(2)(b) of the Sixth Directive to be interpreted as precluding provisions in the legislation of a Member State under which the application of services for private use means that a taxable person performs, arranges performance or in some other way provides a service for himself or his staff for private purposes or for other non-commercial purposes, where the service is provided for a consideration less than the cost of performing the service?' The questions referred for a preliminary ruling 18. The questions referred to the Court concern the determination of the taxable amount in the case of a supply of goods or a provision of services by a taxable person to the members of his staff for a price which is lower than the cost price. They have been referred, in particular, to enable the national court to assess the compatibility w....
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....ustadt 38 STT 664 (ECJ) paragraph 13; and Case Commission of the European Communities v. French 36 STT 690 (ECJ) paragraph 38). Moreover, that consideration must be capable of being expressed in money (Co-Operatieve Aardappelenbewaarplaats GA (supra) paragraph 13; Naturally Yours Cosmetics Ltd. (supra) paragraph 16; and Julius Fillibeck Sohne GmbH & Co. KG (supra), paragraph 14). 22. As the Advocate General rightly stated in point 35 of his Opinion, 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'. 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 (see, to that effect, Case Apple & Pear Development Council v. Commissioners of Customs & Excise [2012] 36 STT 678, paragraph 12). 23. Articles 5(6) and 6(2) of the Sixth Directive treat certain transactions for which no consideration is actually received by the taxable person as supplies of goods and provisions of services effected for ....
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....he provision of a meal in the company's canteen will be symbolic. In any event, the risk referred to by the Swedish Government may be dealt with only by a request by the Member State concerned for authorisation under Article 27 of the Sixth Directive to introduce measures derogating from that directive in order to prevent certain types of tax evasion or avoidance. 27. The Swedish Government also points out that, under Article 11A(1)(a) of the Sixth Directive, subsidies directly linked to the price of taxable supplies form part of the taxable amount. Were an undertaking to subsidise the meals provided to its members of staff through an external catering company, it would pay to that company directly the subsidy amount which supplements the price paid by the staff to the catering company. The subsidy would then be regarded as an amount directly linked to the price and would form part of the taxable amount pursuant to that provision. An undertaking which subsidises meals offered by its own catering services must be taxed in the same way. 28. It should be observed that, under the general rule laid down in Article 11A(1)(a) of the Sixth Directive, the taxable amount for the su....