The ECJ has reconfirmed the general principle that the whole of a single supply of goods or services which is comprised of a principal element and an ancillary element must be subject to VAT at the applicable rate of the principal element of the supply, even if the ancillary element, if supplied separately, would be subject to a different rate of VAT.
This particular case related to tours of AFC Ajax's football ground, the Amsterdam Arena, with the stadium tour being the principal element of the supply and a visit to the club museum being the ancillary element. Supplied separately they would have been subject to different rates of VAT (21% and 6% respectively), but the higher rate of VAT attaching to the principal supply was held to apply to the entire composite supply.
Stadion Amsterdam's argument that two separate VAT rates should apply was based on Talacre v HMRC, where it was held that the two supplies making up a composite supply should be taxed at different rates (as an exception to the general principle set out above). The ECJ confirmed that the exception to the general principle did not apply where, as Stadion Amsterdam had argued, each supply could be separately identified and priced. Rather the exception applied only where the relevant VAT legislation specifically provided for particular separate VAT treatments. As was the case in Talacre, in the UK the supply of a caravan is zero-rated but the relevant VAT legislation notes specifically exclude from zero-rating removable contents of that caravan, and that specific legislative provision overrode the general principle.