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23 March 2011
Issue: 4298 / Categories: Tax cases , VAT
Finanzampt Burgdorf v Bog and other cases (Cases C-497/09, C-499/09, C-501/09 and C-502/09), European Court of Justice

The German court made a reference for a preliminary ruling to the European Court of Justice (ECJ) in four cases involving whether supplies of food or meals prepared for immediate consumption constituted supplies of goods within the meaning of article 5 of the Sixth Directive or supplies of services within the meaning of article 6 Further, and, if they were supplies of goods, whether they were subject to the reduced rate of VAT as ‘foodstuffs’ within the meaning of category 1 of annex H to the directive.

The court ruled that the supply of food freshly prepared for immediate consumption from snack stalls, mobile snack bars or in cinema foyers was a supply of goods within the meaning of article 5, provided it could be shown that the food did not require a lot of preparation, and therefore it was subject to a lower rate of VAT.

With regard to the term ‘foodstuffs’ in category 1 of annex H, this covered food and meals that had been prepared for immediate consumption by boiling, grilling, roasting, baking or other means.

The court’s decision could have considerable ramifications in the UK. Independent VAT consultant Neil Warren said, ‘I do worry when an ECJ case comes up with an outcome that is totally contrary to what we have accepted and applied in the UK for 38 years since VAT was introduced in 1973.

‘The consequences of this case could be massive in terms of potential VAT rebates going back four years. HMRC will need their big players to look at this case very closely and assess the implications.’

HMRC say they ‘do not believe that the recent ECJ decision relating to the supplies of certain foodstuffs in Germany means any changes in the way UK taxpayers account for VAT on hot take-away food. Both supplies of food and supplies made in the course of catering in the UK are already treated as supplies of goods’.

They department added that it is carefully reviewing the decision to consider whether they have any impact on the UK's treatment of food.

Issue: 4298 / Categories: Tax cases , VAT
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