Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Taxable amount - Supply of goods - Possibility for the purchaser to acquire goods by means of interest-free credit provided by a finance company distinct from the seller - Payment by that company to the seller of an amount less than the price of the goods - Taxable amount consisting of the total amount payable by the purchaser

(Council Directive 77/388, Art. 11.A(1)(a))

Summary

$$On a proper construction of Article 11.A(1)(a) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, where a supply of goods for consideration has the following features:

- a retail trader sells goods in return for payment of the advertised price which he invoices to the purchaser and which does not vary according to whether the customer pays in cash or by way of credit;

- should the purchaser so request, the acquisition of the goods is financed by the provision to him of interest-free credit by a finance company distinct from the seller;

- the finance company gives an undertaking to the purchaser that it will pay to the seller on the purchaser's behalf the sales price advertised and invoiced by the seller;

- the finance company in fact pays to the seller, pursuant to agreements concluded with the seller but of which the purchaser is unaware, a sum less than the price advertised and invoiced; and

- the purchaser repays to the finance company a sum equal to the price advertised and invoiced,

the taxable amount for purposes of calculating the value added tax payable on that sale consists of the full amount payable by the purchaser.

( see para. 49 and operative part )