Same products, different VAT rates: CJEU addresses a consuming issue
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Local Insights

Same products, different VAT rates: CJEU addresses a consuming issue

Sponsored by


A CJEU ruling has recognised the right of EU member states to apply different VAT rates depending on the method of supply of foodstuffs and beverages, reports Fernando Matesanz of Spanish VAT Services

On October 5 2023, the Court of Justice of the EU (CJEU) issued a judgment (Case C-146/22, YD) on the power of member states to apply reduced VAT rates to certain supplies of goods and services.

Background to the case

The case in question concerned the application of different VAT rates to the supply of apparently the same type of goods; specifically, the delivery of a milk-based drink.

The drink was delivered hot and ready for immediate consumption at the request of customers. According to the applicant, the VAT rate to be applied to that supply was the reduced rate laid down by the VAT rules for supplies of milk-based beverages (5%).

However, the local tax authority found that the sale of the beverage prepared for customers for its consumption had to be regarded as a supply of goods accompanied by services (the preparation of the beverage and serving thereof to customers for immediate consumption), and, therefore, could not benefit from that reduced VAT rate. The correct VAT rate, according to the tax authorities, was 8%, which is the applicable VAT rate for “food and beverage serving services”.

The question referred to the CJEU therefore sought to resolve the described controversy.

Ruling of the CJEU

The court concluded that the distinction made for the application of different VAT rates based on whether the supply of foodstuffs is accompanied by ancillary services is not contrary to EU law. Therefore, it may be regarded as valid in so far as it complies with the principle of neutrality.

Indeed, the fact that these ancillary services exist may lead to the transaction being classified as a supply of services and not as a supply of goods. This, in principle, would justify the application of different VAT rates. EU law attaches decisive importance to the supply of services accompanying the supply of a foodstuff; such services must be sufficient for the immediate consumption of that food.

Going back to the principle of neutrality, it should be recalled that said principle precludes similar supplies of goods or services that are in competition with each other from being treated differently for VAT purposes. This includes the application of different VAT rates. In other words, similar goods or products cannot be treated differently for VAT purposes.

In this regard, goods or services are similar where they have similar characteristics and meet the same needs from the point of view of consumers. In the event of differences between them, these differences cannot have a significant influence on the decision of the average consumer to use one or other of those goods or services.

In light of the foregoing, the CJEU considered that the beverages marketed by the applicant are being prepared specifically at the request of customers and served hot, for immediate consumption, whereas that is not necessarily the case for dairy beverages marketed in a general manner (not adapted to the customer's request) in shops or supermarkets. The court concluded, therefore, that these are two different situations with different purposes. This difference seems to be decisive with regard to the consumer opting for one product or another.

All this led the CJEU to consider that it is not contrary to EU law to establish a difference of rates in the delivery of a product in a general way and the delivery of the same product but prepared in accordance with the customer's requested method of consumption. This is because, for VAT purposes, the first situation deals with a mere supply of goods, while the second deals with a supply of services. Both are different things in the field of VAT and therefore their different treatment would seem to be justified.


The situation described in Case C-146/22 is now very common, since we have many different options to consume products. In this sense, an average consumer who wants to consume a certain foodstuff may go to a supermarket to purchase it, they can go to an establishment at street level to have it prepared for immediate consumption, or they can even ask for it to be delivered to their home. In all three situations, the food product is the same; however, the way of acquiring it is different. In the CJEU´s view, this difference is significant enough for these situations to be treated differently in VAT terms.

In accordance with all the above, we can see how it is possible that the delivery of the same product may be subject to different VAT rates. This is so because although we may be dealing with the delivery of the same type of product, we may not be dealing with the same type of transaction in the field of VAT.

more across site & bottom lb ros

More from across our site

Rema Serafi, KPMG’s first-ever female vice chair for tax, talks about breaking the mould in an exclusive interview with ITR
The metal multinational’s victory, in a case worth $12 million, continues the trend of companies coming out on top against India’s revenue department
Guy Bud and Matthew Greene from litigation firm Stewarts review a dispute on tiered partnerships, which raises questions on corporation tax and partnership law
The stagnating pay and tax bonuses cap follow slashed payouts for the deals team and business consolidation in the last month
A greater UN role has been secured after disagreements between developed and developing countries over the OECD’s influence in global tax reform
The US-based firm picks up investment fund specialist Ceinwen Rees, while Ireland nearly doubles its corporation tax receipts in three years
The order comes amid controversy over another of David Collard’s companies’ tax and TP affairs
NASSCOM, which represents over 3,000 Indian companies, has argued for the removal of the segmentation rule
The chancellor claims it is the largest business tax cut in modern British history
ITR invites tax firms, in-house teams, and tax professionals to make nominations for the 2024 ITR Tax Awards in the Americas, EMEA, and Asia-Pacific