Case C‑494/12

Dixons Retail plc

v

Commissioners for Her Majesty’s Revenue and Customs

(Request for a preliminary ruling from the First-tier Tribunal (Tax Chamber))

‛Directive 2006/112/EC — Value added tax — Supply of goods — Concept — Fraudulent use of a bank card’

Summary — Judgment of the Court (Second Chamber), 21 November 2013

1. Harmonisation of fiscal legislation — Common system of value added tax — Supply of goods — Concept — Transfer of tangible property to a purchaser fraudulently using a bank card as a means of payment — Included

   (Council Directives 77/388, Arts 2(1) and 5(1), and 2006/112, Arts 2(1)(a) and 14(1))

2. Harmonisation of fiscal legislation — Common system of value added tax — Taxable amount — Supply of goods or services — Concept — Sale transactions between a supplier and a purchaser paying by bank card — Payment made on behalf of the purchaser by the third-party card issuer, pursuant to an agreement concluded with the supplier — Payment constituting consideration — Included

   (Council Directives 77/388, Art. 11A(1)(a), and 2006/112, Art. 73)

1.  Articles 2(1) and 5(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes and Articles 2(1)(a) and 14(1) of Directive 2006/112 on the common system of value added tax must be interpreted as meaning that, in the context of an agreement concluded between a third party and the supplier of goods by which the third party has undertaken to pay the supplier, after deduction of a charge, for the goods sold by the latter to purchasers using a bank card as a means of payment, the physical transfer of goods to a purchaser who fraudulently uses such a card to pay for those goods constitutes a supply of goods.

   The concept of a supply of goods does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner.

   That concept is objective in nature and it applies without regard to the purpose or results of the transactions concerned and without its being necessary for the tax authorities to carry out inquiries to determine the intention of the taxable person in question or for them to take account of the intention of a trader other than that taxable person involved in the same chain of supply.

   Thus, the fraudulent use of a bank card as a means of payment when those transactions have been carried out does not affect the ability to classify them as supplies of goods because such use is a matter not of the objective criteria on which that concept is based but of the intention of the person who has taken part, as the person acquiring the goods, in the transactions at issue and of the processes carried out in order to give effect to that intention.

   Moreover, such a situation must be distinguished from that of theft of goods, which is not covered by the concept of a supply of goods, because the theft of goods does not have the effect of empowering the thief to dispose of the goods under the same conditions as their owner.

   (see paras 17, 20, 21, 26, 28, 29, 38, operative part)

2.  Article 11A(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes and Article 73 of Directive 2006/112 on the common system of value added tax must be interpreted as meaning that in the context of the physical transfer of goods to a purchaser who fraudulently uses a bank card as a means of payment — a transfer which constitutes a supply of goods — the payment made by a third party, under an agreement concluded between it and the supplier of those goods by which the third party has undertaken to pay the supplier for the goods sold by the latter to purchasers using such a card as a means of payment, constitutes consideration.

   When a purchaser pays for goods by means of a credit card, one is faced with two transactions, namely, on the one hand, the sale of the goods by a supplier, who calculates in the total price demanded the value added tax which will be paid by the purchaser as the final consumer and which is charged by the supplier on behalf of the revenue authorities, and, on the other hand, the provision of services to the supplier by the card issuer.

   It is not a requirement of the Sixth Directive and Directive 2006/112 that, for a supply of goods or services to be effected for consideration, the consideration for the supply must be obtained directly from the person to whom the goods or services are supplied. Under Article 11A(1)(a) of the Sixth Directive and Article 73 of Directive 2006/112, the payment of the consideration for a supply of goods may be made not only by the purchaser but also by a third party, in this instance the card issuer.

   (see paras 34, 35, 38, operative part)

Case C‑494/12

Dixons Retail plc

v

Commissioners for Her Majesty’s Revenue and Customs

(Request for a preliminary ruling from the First-tier Tribunal (Tax Chamber))

‛Directive 2006/112/EC — Value added tax — Supply of goods — Concept — Fraudulent use of a bank card’

Summary — Judgment of the Court (Second Chamber), 21 November 2013

1. Harmonisation of fiscal legislation — Common system of value added tax — Supply of goods — Concept — Transfer of tangible property to a purchaser fraudulently using a bank card as a means of payment — Included

   (Council Directives 77/388, Arts 2(1) and 5(1), and 2006/112, Arts 2(1)(a) and 14(1))

2. Harmonisation of fiscal legislation — Common system of value added tax — Taxable amount — Supply of goods or services — Concept — Sale transactions between a supplier and a purchaser paying by bank card — Payment made on behalf of the purchaser by the third-party card issuer, pursuant to an agreement concluded with the supplier — Payment constituting consideration — Included

   (Council Directives 77/388, Art. 11A(1)(a), and 2006/112, Art. 73)

1.  Articles 2(1) and 5(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes and Articles 2(1)(a) and 14(1) of Directive 2006/112 on the common system of value added tax must be interpreted as meaning that, in the context of an agreement concluded between a third party and the supplier of goods by which the third party has undertaken to pay the supplier, after deduction of a charge, for the goods sold by the latter to purchasers using a bank card as a means of payment, the physical transfer of goods to a purchaser who fraudulently uses such a card to pay for those goods constitutes a supply of goods.

   The concept of a supply of goods does not refer to the transfer of ownership in accordance with the procedures prescribed by the applicable national law but covers any transfer of tangible property by one party which empowers the other party actually to dispose of it as if he were its owner.

   That concept is objective in nature and it applies without regard to the purpose or results of the transactions concerned and without its being necessary for the tax authorities to carry out inquiries to determine the intention of the taxable person in question or for them to take account of the intention of a trader other than that taxable person involved in the same chain of supply.

   Thus, the fraudulent use of a bank card as a means of payment when those transactions have been carried out does not affect the ability to classify them as supplies of goods because such use is a matter not of the objective criteria on which that concept is based but of the intention of the person who has taken part, as the person acquiring the goods, in the transactions at issue and of the processes carried out in order to give effect to that intention.

   Moreover, such a situation must be distinguished from that of theft of goods, which is not covered by the concept of a supply of goods, because the theft of goods does not have the effect of empowering the thief to dispose of the goods under the same conditions as their owner.

   (see paras 17, 20, 21, 26, 28, 29, 38, operative part)

2.  Article 11A(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes and Article 73 of Directive 2006/112 on the common system of value added tax must be interpreted as meaning that in the context of the physical transfer of goods to a purchaser who fraudulently uses a bank card as a means of payment — a transfer which constitutes a supply of goods — the payment made by a third party, under an agreement concluded between it and the supplier of those goods by which the third party has undertaken to pay the supplier for the goods sold by the latter to purchasers using such a card as a means of payment, constitutes consideration.

   When a purchaser pays for goods by means of a credit card, one is faced with two transactions, namely, on the one hand, the sale of the goods by a supplier, who calculates in the total price demanded the value added tax which will be paid by the purchaser as the final consumer and which is charged by the supplier on behalf of the revenue authorities, and, on the other hand, the provision of services to the supplier by the card issuer.

   It is not a requirement of the Sixth Directive and Directive 2006/112 that, for a supply of goods or services to be effected for consideration, the consideration for the supply must be obtained directly from the person to whom the goods or services are supplied. Under Article 11A(1)(a) of the Sixth Directive and Article 73 of Directive 2006/112, the payment of the consideration for a supply of goods may be made not only by the purchaser but also by a third party, in this instance the card issuer.

   (see paras 34, 35, 38, operative part)