Justyna Zając-Wysocka
Theoretical and practical aspects of qualifications and taxation of composite supplies in VAT
Summary
The reality of business activity shows how economic events could be diverse and complex. Entrepreneurs, in relation to the principle of freedom of creating contracts, have unlimited possibilities to form relations under civil law. In this context, there are doubts how different economic events should be taxed in practice using goods and services tax. In particular, this issue relates to those events which consist several actions towards the realization of complex objective, i.e. delivery of goods or supply of services.
With regard to above issues, Authoress analysis the essence of single complex service, as a special kind of economic reality. The reason for this analysis as the fact that the doctrine of Polish tax law assumed that the tax on goods and services, in fact isn't a tax on contracts. The tax on goods and services is a tax on economic reality.
Authoress's purpose is also indication of the characteristic elements that allow determine whether transaction it is to be regarded as consisting of a single supply or of several distinct and independent supplies which must be assessed separately from the point of view of VAT. According to the Court’s case‑law for VAT purpose every supply must normally be regarded as distinct and independent. Nevertheless, it is clear from the case-law of the Court that, in certain circumstances, several formally distinct services, which could be supplied separately must be considered to be a single transaction. There is a single supply where two or more elements or acts supplied by the taxable person to the customer are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split. This premise is referred to as a criterion of the consumer's needs. Additionally, next to above premise could be indicated such criterions, among others: not deteriorated quality, insignificance of additional services. Practical usage of mentioned above premises, which should be considered to qualify transaction as a single composite supply, is discussed in present study. For example, were discussed such issues as taxation of the supply of goods with transport or qualification the leasing of immovable property and the supplies of services linked to that leasing, as a single supply from the point of view of value added tax.
The research material was primarily the analysis of the achievements of the tax law doctrine. Authoress also bases on interpretations of the Provisions of Tax Law and the jurisprudence of the Polish administrative courts and the Court of Justice of the European Union.