Astra Zeneca UK Ltd v Commissioners for Her Majesty’s Revenue and Customs.

• Jurisdiction: European Union
• Celex Number: 62009CJ0040
• ECLI: ECLI:EU:C:2010:450
• Date: 29 July 2010
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Docket Number: C-40/09

Case C-40/09

Astra Zeneca UK Ltd

v

Commissioners for Her Majesty’s Revenue and Customs

(Reference for a preliminary ruling from the VAT and Duties Tribunal, Manchester)

(Sixth VAT Directive – Article 2(1) – Concept of the supply of services effected for consideration – Retail vouchers provided by an undertaking to its employees as part of their remuneration)

Summary of the Judgment

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable transactions – Supply of services for consideration

(Council Directive 77/388, Art. 2(1))

Article 2(1) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, as amended by Directive 95/7, must be interpreted as meaning that the provision of a retail voucher by a company, which acquired that voucher at a price including value added tax, to its employees in exchange for their giving up part of their cash remuneration constitutes a supply of services effected for consideration within the meaning of that provision.

In fact, there is a direct link between the provision of those vouchers to the employees and the part of the cash remuneration which the employees must give up as consideration for that provision since, instead of receiving all their remuneration in cash, those who have chosen to receive such vouchers must give up part of that remuneration in exchange for those vouchers, that transaction resulting in a specific deduction from the fund of an employee who made that choice. Moreover, the employer actually receives consideration, expressed in money, for the provision of the retail vouchers, since it corresponds to a fraction of the cash remuneration of its employees. In addition, the burden of the value added tax on the provision of those vouchers is borne by the employees who receive the vouchers, since the deduction from their remuneration to which that provision gives rise includes the price of the vouchers and all the value added tax on them.

(see paras 29-32, 35, operative part)

JUDGMENT OF THE COURT (Third Chamber)

29 July 2010 (*)

(Sixth VAT Directive – Article 2(1) – Concept of the supply of services effected for consideration – Retail vouchers provided by an undertaking to its employees as part of their remuneration)

In Case C‑40/09,

REFERENCE for a preliminary ruling under Article 234 EC from the VAT and Duties Tribunal, Manchester (United Kingdom), made by decision of 16 January 2009, received at the Court on 29 January 2009, in the proceedings

Astra Zeneca UK Ltd

v

Commissioners for Her Majesty’s Revenue and Customs,

THE COURT (Third Chamber),

composed of K. Lenaerts, President of the Chamber, R. Silva de Lapuerta (Rapporteur), E. Juhász, T. von Danwitz and D. Šváby, Judges,

Advocate General: P. Mengozzi,

Registrar: N. Nanchev, Administrator,

having regard to the written procedure and further to the hearing on 11 March 2010,

after considering the observations submitted on behalf of:

– Astra Zeneca UK Ltd, by M. Conlon QC, and D. Southern, barrister, instructed by G. Salmond, solicitor,

– the United Kingdom Government, by H. Walker, acting as Agent, and by N. Pleming QC,

– the Greek Government, by K. Georgiadis and I. Bakopoulos and by V. Karra, acting as Agents,

– the European Commission, by R. Lyal and M. Afonso, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 22 April 2010,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 2(1), Article 6(2), first subparagraph, heading (b), and Article 17(2) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 95/7/EC of 10 April 1995 (OJ 1995 L 102, p. 18) (‘the Sixth Directive’).

2 The reference was submitted in the course of proceedings between Astra Zeneca UK Ltd (‘Astra Zeneca’) and the Commissioners for Her Majesty’s Revenue and Customs (‘the Commissioners’) regarding value added tax (‘VAT’) charged to that company on account of the provision of retail vouchers to its employees as part of their remuneration.

Legal context

3 Article 2(1) of the Sixth Directive provides:

‘The following shall be subject to [VAT]:

1. the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such’.

4 Article 4(1) and (2) of that directive is...