© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
C3. Services
Meaning of supply of services​
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- Any transaction which does not constitute a supply of goods
"(1) ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods." (PVD Article 24)
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- Currency/bitcoin exchange
"[31] Consequently, the answer to the first question is that Article 2(1)(c) of the VAT Directive must be interpreted as meaning that transactions such as those at issue in the main proceedings, which consist of the exchange of traditional currency for units of the ‘bitcoin’ virtual currency and vice versa, in return for payment of a sum equal to the difference between, on the one hand, the price paid by the operator to purchase the currency and, on the other hand, the price at which he sells that currency to his clients, constitute the supply of services for consideration within the meaning of that article." (Hedqvist C-264/14)
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- Vouchers are a service (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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NATURE OF THE SERVICE​
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Right to benefit​
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- Provision of right of access to golf club is supply for consideration irrespective of whether the member attends
"[40] As the Commission argues, the fact that in the case before the national court the annual subscription fee is a fixed sum which cannot be related to each personal use of the golf course does not alter the fact that there is reciprocal performance between the members of a sports association such as that concerned in the main proceedings and the association itself. The services provided by the association are constituted by the making available to its members, on a permanent basis, of sports facilities and the associated advantages and not by particular services provided at the members' request. There is therefore a direct link between the annual subscription fees paid by members of a sports association such as that concerned in the main proceedings and the services which it provides." (Kennemer Golf C-174/00)
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- Payment due upon termination is consideration for the supply of the right to benefit under the contract
“[18] In that regard, it should be added that, as is apparent from the case-law of the Court, a predetermined amount received by an economic operator where a contract for the supply of services for a certain period is terminated early by its customer, or for a reason attributable to the customer, which corresponds to the sum that that operator would have received for the remainder of that period in the absence of such termination, must be regarded as the remuneration for a supply of services for consideration and subject, as such, to VAT, even though that termination entailed, inter alia, the deactivation of the services referred to in that contract before the expiry of the agreed period (see, to that effect, judgment of 11 June 2020, Vodafone Portugal, C 43/19, EU:C:2020:465, paragraph 33 and the case-law cited).
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“[20] First, the consideration for the amount to be paid by the recipient of the supply of services is constituted by the recipient’s right to benefit from the fulfilment, by the supplier, of the obligations under the services contract, even if the recipient no longer wishes to avail itself of that right for a reason attributable to it (see, to that effect, judgment of 11 June 2020, Vodafone Portugal, C 43/19, EU:C:2020:465, paragraph 35).
[21] In a situation such as that at issue in the main proceedings, the supplier of services not only placed the customer in a position to benefit from the supply of services, within the meaning of the case-law cited in paragraph 17 above, but, since it had already begun the agreed works, actually provided part of that supply, it being noted that the supplier was prepared to perform that contract to completion.” (rhtb: projekt gmbh C-622/23)​
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- Paying person to accept assignment of lease is service by recipient of assignment
"[20] As the referring court explained, the supply at issue in the main proceedings consists of a prospective tenant, as the supplier of services, agreeing to accept an assignment of a lease of property from a lessee, as the recipient. Thus, in the case before the national court, there is, contrary to the Commission's appraisal, an identifiable supply of services, which falls within the scope of the Sixth Directive by reason of Article 2(1) thereof and which is therefore taxable, unless one of the exemptions prescribed by a particular provision of that directive applies. Therefore, it is appropriate to consider whether that supply of services falls within Article 13B(b) of the Sixth Directive." (Cantor Fitzgerald C-108/99)
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Assignments​
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- No supply of services by assignor where assignor pays assignee to accept assignment
"[23] On the contrary, it was the new tenant, CFI, which, by agreeing to take on the rights and obligations arising under the existing lease, supplied a service to the former tenant, Wako. Wako did not make a supply of services to CFI but paid consideration in cash for the service supplied by CFI, consideration which, as such, is not liable to VAT. The landlord was the only person to effect a supply of services to CFI within the meaning of Article 2(1) of the Sixth Directive, which was exempt under Article 13B(b) thereof, namely the right to occupy its property in consideration for the payment of rent." (Cantor Fitzgerald C-108/99)
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