The High Court has today given judgment in a VAT appeal concerning single/multiple supplies and issues concerning place of supply of services. The Court dismissed an appeal by a UK based American Express company in relation to supplies of real estate services provided to its American parent. American Express had contended the place of supply was America and that no VAT had been due.
HMRC’s argument and the VAT Tribunal’s decision that there was a single supply was upheld. The Court rejected a submission that it was only in exceptional cases that it was possible to find a single supply on the Levob test where the transaction comprised a combination of services (rather than a combination of goods and services). It held that the transaction was not too complex to be a single supply. That the supplier had discretion in the way in which the service was provided did not mean that the elements of the transaction were independent. On the facts the Levob test for a single supply was satisfied.
On place of supply, the Judge rejected an argument that Art 9(2)(a) of the Sixth Directive (services connected to land) applied, as the necessary connection with specific properties was absent.
The next question for the Court was whether the Tribunal was correct to hold, on the facts found, that the single supply did not fall within the third indent of Art 9(2)(e) of the Sixth Directive covering the services of consultants, engineers, lawyers, accountants and other similar services, as well as data processing and of the supplying of information.
The judge upheld HMRC’s submissions that the indent should not be interpreted more widely to include management functions and that the single service supplied had gone well beyond the habitual activity of a consultant.
Mrs Justice Proudman dismissed the appeal
Peter Mantle represented HMRC
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