Recently, the Dutch Supreme Court asked the Court of Justice of the European Union ("CJEU") to provide clarity on the question whether one or two VAT rates should apply to a single composite supply that consists of different elements with different VAT rates.

It is the general rule that where a taxpayer supplies a composite supply consisting of two or more different elements, the VAT rate of the prevailing (main) element applies to the service. Nevertheless, the Dutch Supreme Court raises the question whether two different VAT rates (i.e. the standard and reduced VAT rate) can apply to such a composite supply.

In the case at hand, an operator exploits a football stadium. The stadium is used by the local football club and concerts and dance festivals are held in the stadium on a regular basis. The stadium also hosts the museum of the local football club. Besides renting out the football stadium to the local football club, event hosts, etc., the operator also organizes guided tours through the stadium. The guided tour also includes a visit to the museum.

In the Netherlands, museum tours are subject to the reduced VAT rate, whereas organizing guided tours through the stadium is subject to the standard VAT rate. In prior proceedings, it was established that the guided tour through the stadium and the visit to the museum are to be treated as one single composite supply. Taking into account CJEU case law, the Dutch Supreme Court has doubts whether one or two VAT rates should be applied to that supply. Therefore the Dutch Supreme Court referred the case to the CJEU.

The outcome of this case should be interesting for companies who supply composite supplies with different elements that are subject to different VAT rates (i.e. reduced VAT rate and general VAT rate), such as pharma companies.