© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
C2: Supplies of goods
MEANING OF SUPPLY OF GOODS
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Transfer of right to dispose of tangible property as owner
"(1) ‘Supply of goods’ shall mean the transfer of the right to dispose of tangible property as owner." (PVD Article 14)
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- Any transfer which empowers the recipient actually to dispose as if owner, irrespective of national law
"[20] In this connection, according to settled case-law of the Court, the concept of ‘supply of goods’ in Article 5(1) of the Sixth Directive and Article 14(1) of Directive 2006/112 does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner (see Case C-435/03 British American Tobacco and Newman Shipping [2005] ECR I-7077, paragraph 35; Optigen and Others, paragraph 39; Halifax and Others, paragraph 51; Case C-237/09 De Fruytier [2010] ECR I-4985, paragraph 24; and Case C‑78/12 Evita-K [2013] ECR, paragraph 33)." (Dixon Retail Plc C-494/12)
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"[76] We should add that the above analysis is not changed simply because the goods supplied pursuant to the Disputed Supplies - namely, the fuel and the parts provided during the provision of repairs and maintenance - were installed in vehicles owned by ROBO. As the CJEU noted in Vega at paragraph [27], "the concept of a 'supply of goods' ... does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law, but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner". In this case, the economic and commercial reality was that the suppliers in question empowered the Appellant to dispose of the relevant goods as if the Appellant were the owner and the supplies of goods were accordingly made to the Appellant. In this respect too, the Appellant was in the same position as the card holders in Auto Lease Holland and Vega - see Auto Lease Holland at paragraphs [31] to [37] and Vega at paragraphs [27] to [39]." (D Nuttall UK Limited v. HMRC [2025] UKFTT 1600 (TC), Judge Beare)
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- Transfer procured by credit card fraud is still a transfer
"[26] The fraudulent use of a bank card as a means of payment when those transactions were carried out does not affect the ability to classify them as supplies of goods within the meaning of the Sixth Directive and Directive 2006/112. Such use is a matter not of the objective criteria on which that concept is based but of the intention of the person who has taken part, as the person acquiring the goods, in the transactions at issue and of the processes carried out in order to give effect to that intention.
[27] Accordingly, it must be found that a ‘transfer’, within the meaning of Article 5(1) of the Sixth Directive and Article 14(1) of Directive 2006/112, exists between Dixons and its customers, even though the latter, when the transactions at issue in the main proceedings were carried out, fraudulently used a bank card as a means of payment for the goods supplied by Dixons." (Dixon Retail Plc C-494/12)
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- Theft does not empower the thief to dispose of the goods under same conditions as their owner
"[28] It should be added that, contrary to Dixons’ contentions, a situation such as that at issue in the main proceedings must be distinguished from that of theft of goods, which is not covered by the concept of ‘supply of goods’ under the Sixth Directive and Directive 2006/112 (see British American Tobacco and Newman Shipping, paragraph 33).
[29] The theft of goods does not have the effect of empowering the thief to dispose of the goods under the same conditions as their owner. A theft cannot therefore be regarded as effecting a transfer, within the meaning of Article 5(1) of the Sixth Directive and Article 14(1) of Directive 2006/112, from the victim to the thief (see British American Tobacco and Newman Shipping, paragraph 32).
[30] Moreover, the theft of goods, by definition, does not give rise to any payment in return to the victim of the theft. It therefore cannot as such be regarded as a supply of goods ‘for consideration’ within the meaning of Article 2(1) of the Sixth Directive and Article 2(1)(a) of Directive 2006/112 (see British American Tobacco and Newman Shipping, paragraph 32)." (Dixon Retail Plc C-494/12)
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Compulsory purchase
"(2) In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:
(a)the transfer, by order made by or in the name of a public authority or in pursuance of the law, of the ownership of property against payment of compensation;" (PVD Article 14)
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Hire contract providing for ownership to pass
"(2) In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:
[...]
(b) the actual handing over of goods pursuant to a contract for the hire of goods for a certain period, or for the sale of goods on deferred terms, which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment;" (PVD Article 14)
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Transfer of goods under commission contract
"(2) In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:
[...]
(c) the transfer of goods pursuant to a contract under which commission is payable on purchase or sale." (PVD Article 14)
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Handing over works of construction (optional)
"(3) Member States may regard the handing over of certain works of construction as a supply of goods." (PVD Article 14)
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GOODS​
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- Goods used to produce other goods treated as incorporated
"(7) For the purposes of this section, where goods are manufactured or produced from any other goods, those other goods shall be treated as incorporated in the first-mentioned goods." (VATA 1994, s.5)
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- Heat treated as goods
"[26] With regard to the activity at issue in the main proceedings, that is to say the supply of heat, it should be pointed out that, under Article 15(1) of the VAT Directive, heat is to be treated as tangible property. It follows that that activity constitutes a supply of goods, for the purposes of Article 14(1) of that directive." (WEG C-449/19)
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- Bitcoin/currency not goods
"[24] It must be held, first, that the ‘bitcoin’ virtual currency with bidirectional flow, which will be exchanged for traditional currencies in the context of exchange transactions, cannot be characterised as ‘tangible property’ within the meaning of Article 14 of the VAT Directive, given that, as the Advocate General has observed in point 17 of her Opinion, that virtual currency has no purpose other than to be a means of payment.
[25] The same is true for traditional currencies, since it involves money which is legal tender (see, to that effect, judgment in First National Bank of Chicago, C‑172/96, EU:C:1998:354, paragraph 25).
[26] Consequently, the transactions at issue in the main proceedings, which consist of the exchange of different means of payment, do not fall within the concept of the ‘supply of goods’, laid down in Article 14 of the directive. In those circumstances, those transactions constitute the supply of services, within the meaning of Article 24 of the VAT Directive." (Hedqvist C-264/14 - exchange is a supply of services, however)
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- Vouchers not goods: right to future goods or services
"[26] Consequently, in so far as those vouchers do not immediately transfer the right to dispose of property, their provision constitutes, for VAT purposes, not a ‘supply of goods’ within the meaning of Article 5(1) of the Sixth Directive, but a ‘supply of services’ within the meaning of Article 6(1) of that directive, since, under Article 6(1), any transaction which does not constitute a supply of goods within the meaning of Article 5 is regarded as a supply of services." (Astra Zeneca UK Ltd C-40/09)
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Goods v. Services​
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- Supply of services may include ancillary and minor supplies of goods
"[62] As the German Government has emphasised the difficulty in distinguishing between supplies of goods and supplies of services, particularly where work is carried out on a motor vehicle, it should be observed that there is a consistent body of case-law to the effect that in order to determine whether a given transaction is a supply of goods or a supply of services, it is necessary to identify its characteristic features (Case C-231/94 Faaborg-Gelting Linien [1996] ECR I-2395, paragraph 12). Where a supply of goods is only one component of a transaction in which supplies of services predominate, the transaction must be regarded as a supply of services (Faaborg-Gelting Linien, paragraph 14).
[63] It follows that supplies of services, including those which necessitate ancillary and minor supplies of goods, cannot constitute component parts within the meaning of Article 5(6) of the Sixth Directive." ​(Fischer C-322/99)
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- Identify characteristic features and whether service components predominate
"[62] As the German Government has emphasised the difficulty in distinguishing between supplies of goods and supplies of services, particularly where work is carried out on a motor vehicle, it should be observed that there is a consistent body of case-law to the effect that in order to determine whether a given transaction is a supply of goods or a supply of services, it is necessary to identify its characteristic features (Case C-231/94 Faaborg-Gelting Linien [1996] ECR I-2395, paragraph 12). Where a supply of goods is only one component of a transaction in which supplies of services predominate, the transaction must be regarded as a supply of services (Faaborg-Gelting Linien, paragraph 14)." ​(Fischer C-322/99)
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Classifying complex supplies as goods or services​
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See C6: Classifying complex supplies
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Online marketplace deemed supply
See XX
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