V3.102 Meaning of 'supply'
Transactions amounting to a supply
UK legislation is particularly unhelpful in defining 'supply', stating merely that it 'includes all forms of supply, but not anything done otherwise than for a consideration'1. Directive 2006/112/EC2 is of more assistance:
• 'Supply of goods' means 'the transfer of the right to dispose of tangible property as owner'3.
• 'Supply of services' means 'any transaction which does not constitute a supply of goods'4. A distinction can be made between the UK and EU 'definitions'; Directive 2006/112/EC, art 2(1)(a) and (c) refer to a'supply…for consideration' being subject to VAT, which gives rise to the possibility, apparently non-existent in UK law except in specified cases5, of a supply being made for no consideration. This distinction was highlighted in W Resources6, where the Tribunal first asked, apparently on the basis of EU law 'Was the Appellant making supplies of services to the subsidiaries?' (yes, because it entered into agreements to that effect), and secondly asked 'Were the relevant supplies being made for a consideration?' (no, because any consideration was contingent on the subsidiaries' ability to pay).
A restriction of the apparently limitless scope of the supply of a service was suggested in Kretztechnik7, where the Advocate-General said:
'Although Article 6(1) of the Sixth Directive defines a supply of services as any transaction which does not constitute a supply of goods, that definition clearly cannot be taken to its literal extreme. It might be more reasonable to interpret it as intended to define
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