CJEU: Stadion Amsterdam CV v Staatssecretaris van Financiën (C-463/16)
The issue raised in this case was whether an individual element of a composite supply could be subjected to a VAT rate which differs from the VAT rate applicable to that composite supply if such a supply must be considered a single supply for VAT purposes.
Facts of Stadion Amsterdam
Stadion Amsterdam is a VAT entrepreneur, operating a multi-purpose building complex known as "The Arena". The building consists, amongst others, of a stadium and the museum of the football club AFC Ajax. Stadion Amsterdam offers tours through The Arena for one single admission fee. The tour consists of a guided tour through the stadium and of admittance to the museum. In the Netherlands, admittance to a museum is in principle subject to the reduced VAT rate, whereas the guided tour is subject to the standard rate.
The parties had established that, for VAT purposes, the tour constituted a single supply - with a principal element and an ancillary element. On that basis, Stadion Amsterdam considered the access to the museum the principal element and held the view that this single supply should be treated as the supply of a cultural service, subject to the reduced VAT rate of 6%. The Dutch tax authority on the other hand took the position that the tour through the stadium was the principal element, which is subject to the standard VAT rate of 21%. In the course of proceedings before the Dutch Supreme Court, the question was raised as to whether the fact that the guided tour of the stadium and the visit to the AFC Ajax museum are so closely connected to each other that they should be regarded as a single supply of services for VAT purposes means that the same VAT rate must necessarily be applicable to that supply, or whether the payment for the tour could be partially attributed to the admittance of the museum and therefore, for that part, be subject to the reduced rate.
In order to obtain an answer to this question, the Supreme Court referred the case to the CJEU. The CJEU had to assess whether the consideration for a single supply, consisting of two elements, could nevertheless be split in order to apply different VAT rates to its elements.
The decision of the CJEU
According to the Court's settled case-law, there is one single supply where one or more elements are to be regarded as constituting the principal supply, while other elements are to be regarded as ancillary supplies. From this, it follows that the starting point is that ancillary supplies share the same VAT treatment as the principal element which defines the character of the supply for VAT purposes. This is only different in cases where the VAT directive provides for the application of a different VAT rate, or an exemption, for the supply of the ancillary element as such.
With respect to the underlying case, the CJEU ruled that, in circumstances where a single supply is composed of two distinct elements, one principal and the other ancillary (such as the guided tour followed by a visit to the Ajax museum) and which, if supplied separately, would be subject to different rates of VAT, the VAT treatment of the ancillary element follows that of the principal element. Since the reduced VAT rate for cultural services does not refer to such services being supplied as an ancillary element, it can only be applied in cases where such a service is the principal element. In these circumstances therefore, according the CJEU, a split in the VAT rates is not allowed - even if the price paid for each of the elements can be distinguished from the full price paid by the customer.
The CJEU emphasizes once again that in cases of a composite supply consisting of one principal element and ancillary elements, the ancillary elements always follow the VAT treatment of the principal element. This does not change if the ancillary supply would be subject to a different (eg, reduced) VAT rate if it were provided separately, unless the VAT Directive provides for a particular VAT rate for ancillary elements which are supplied as such.