Bezuplatne poskytnuti stroje subdodavateli dle SDEU nepodleha DPH

According to the CJEU, the gratuitous provision of a machine to a subcontractor is not subject to VAT

Businesses often pay various ancillary costs in direct connection with the supplies they purchase, which they do not pass on to their supplier (or any other third party). These situations are common, for example, in manufacturing industries where customers provide their suppliers with their own machinery or equipment for production without requiring financial compensation.

Such cost absorption was considered by the CJEU in the recent case C-475/23. The customer acquired a machine for which he claimed a deduction. He provided the machine free of charge to his subcontractor for the purpose of producing castings for him. The CJEU considered the expenditure thus incurred to be part of the economic activity of the owner of the machine without the obligation to pay output VAT. According to the CJEU, the prerequisite for this procedure is that the gratuitous provision does not go beyond what is necessary for the performance of the taxable supply or economic activity and that there is a direct and immediate link between the cost and the output supply (or economic activity in general) giving rise to the right to deduct.

Finding the boundary between incurring one's own costs in the context of the necessary cooperation, a gratuitous supply or acting on behalf of a counterparty (and hence the supply of a benefit) may not always be entirely intuitive (see, for example, C-707/18).

In factually similar cases, the key will be the ability to demonstrate that the uncharged costs do not exceed the boundaries of necessary cooperation and, at the same time, that these costs ideally co-determine the price of the outputs realised by the owner.

If you have any questions, please contact the author of this article or the EY advisory team you are working with.

Author:

Ivana Krylová