Weekly VAT Update – 21 February 2017
Films do not qualify as culture
The CJEU has released its judgment in the case of British Film Institute. It has followed the opinion of the Advocate-General, rather than the First and Upper Tribunals who had decided that films could be classified as cultural, and therefore exempt. The opinion of the Advocate-General was that the EU law which stated that “certain cultural services” were exempt was not precise enough to have direct effect, in this case in the UK.
Transfer of property to tax authorities to settle debt was not a taxable supply
In another CJEU case, a Polish taxpayer transferred property to the tax authorities to settle tax debt. The Polish tax authorities thought that the transfer was subject to VAT. The Advocate-General has issued her opinion and she accepts that there was a transfer for consideration, but considered that it was not by a taxable person acting as such and so would not be subject to VAT. Had the property been sold to a third party, and the proceeds used to settle the tax debt that would be viewed differently. It remains to be seen whether the CJEU follows the opinion of the Advocate-General.