A2. Scope of VAT

GENERAL

Economic activity

- Only activities of an economic nature covered

"[32] In that regard, the Court has held that, although the VAT Directive gives a very wide scope to VAT, only activities of an economic nature are covered by that tax. According to Article 2(1)(a) of that directive, relating to taxable transactions, the supply of goods for consideration within the territory of a Member State by a taxable person acting as such, inter alia, is subject to VAT (judgment of 17 December 2020, WEG Tevesstraße, C‑449/19, EU:C:2020:1038, paragraphs 24 and 25 and the case-law cited)." (BE C-182/20)

- Only activities of an economic nature covered

Illegal transactions

- No general exclusion for unlawful transactions

- Supplies of goods completely excluded from commercial channels not in scope

"[11]In those judgments, the Court added that illegal imports or supplies of such goods, whose release into the economic and commercial channels of the Community was by definition absolutely precluded and which could give rise only to penalties under the criminal law, were wholly alien to the provisions of the Sixth Directive (see the judgments in Case 294/82, cited above, at paragraphs 19 and 20, in Cases 269/86 and 289/86, cited above, at paragraphs 15 and 17 in each case, and in Case C-343/89, cited above, at paragraph 19). Those judgments therefore concern products which, because of their special characteristics, may not be marketed or incorporated into economic channels." (Lange C-111/92)

- Supplies of goods completely excluded from commercial channels not in scope

- Supplies of illegal drugs and counterfeit currency excluded

"[11] In Case 294/82 Senta Einberger ν Hauptzollamt Freiburg [1984] ECR 1177, in Case 269/86 Mol ν Inspecteur der Invoerrechten en Accijnzen [1988] ECR

3627 and in Case 289/86 Happy Family ν Inspecteur der Omzetbelasting [1988] ECR 3655, which related to the illegal importation into the Community of narcotic drugs and their unlawful supply for consideration within the territory of a Member State, the Court held that no liability to turnover tax arose upon the

unlawful import of drugs into the Community or on their unlawful supply for consideration within the territory of a Member State, in so far as the products in

question were not confined within economic channels strictly controlled by the competent authorities for use for medical and scientific purposes. On the subject of the importation of counterfeit currency, the Court held, similarly, that its considerations concerning the illegal importation of drugs applied, a fortiori, to imports of counterfeit currency (Case C-343/89 Witzemann ν Hauptzollamt München-Mitte [1990] ECR I-4477, paragraph 20)." (Lange C-111/92)

- Supplies of illegal drugs and counterfeit currency excluded

- Supplies of goods that are only prohibited in certain circumstances are within the scope of VAT

"[17] That is not the case where there is no absolute prohibition based on the nature of the goods or their special characteristics, but where only the export of those goods to certain destinations is prohibited, because of their possible use for strategic purposes. Such a prohibition cannot, therefore, be sufficient to remove those products from the scope of the Sixth Directive." (Lange C-111/92)

- Supplies of goods that are only prohibited in certain circumstances are within the scope of VAT

- Unlawful services (e.g. gambling) within the scope of VAT

"[22] The foregoing considerations relating to the import or supply of goods apply equally to the supply of services such as the organisation of games of chance. Those games, and roulette in particular, are lawfully played in a number of Member States. Since the unlawful transactions at issue in the main proceedings are in competition with lawful activities, the principle of fiscal neutrality precludes their being treated differently as regards VAT

[23] The unlawful operation of games of chance therefore falls within the scope of the Sixth Directive." (Fischer C-283/95)

- Unlawful services (e.g. gambling) within the scope of VAT

VAT CHARGED ON SUPPLIES

Supplies of goods or services in the UK

"(1) Value added tax shall be charged, in accordance with the provisions of this Act—

(a) on the supply of goods or services in the United Kingdom (including anything treated as such a supply),..." (VATA 1994, s.1)

Supplies of goods or services in the UK

- Charged on taxable supply made by a taxable person in the course of business

"(1) VAT shall be charged on any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him." (VATA 1994, s.4)

- Charged on taxable supply made by a taxable person in the course of business

(1) Taxable supply

- Any supply in the UK other than an exempt supply

"(2) A taxable supply is a supply of goods or services made in the United Kingdom other than an exempt supply." (VATA 1994, s.4)

- Any supply in the UK other than an exempt supply

(2) Taxable person

- Place of supply

See XX

- Place of supply

(2) Taxable person

- Any person registered or required to be registered

"(1) A person is a taxable person for the purposes of this Act while he is, or is required to be, registered under this Act." (VATA 1994, s.3)

- Any person registered or required to be registered

VAT CHARGED ON IMPORTS

(3) In the course of any business carried on by him

VAT CHARGED ON IMPORTS

- Registration

See XX

- Registration

Importation of goods into the UK

"(1) Value added tax shall be charged, in accordance with the provisions of this Act—

[...]

Importation of goods into the UK