Commentary

V3.152 Value—supplies made for a consideration

Part V3 Supplies, acquisitions and imports

V3.152 Value—supplies made for a consideration

V3.152 Value—supplies made for a consideration

Supplies made for a consideration—EU legislation

Directive 2006/112/EC provides that the 'taxable amount' (ie value) of a supply of goods or services is everything which constitutes the consideration obtained, or to be obtained by the supplier in return for the supply from the customer or a third party1. This includes2:

  1.  

    •     subsidies directly linked to the price of the supply (V3.153)

  2.  

    •     taxes, duties, levies and charges (excluding the VAT itself) (V3.154), and

  3.  

    •     incidental expenses (V3.155).

It does not include3:

  1.  

    •     discounts for early payment (V3.157)

  2.  

    •     price discounts and rebates (V3.158), and

  3.  

    •     repayment of expenses paid out in the name of the purchaser or customer (V3.159).

The provisions of the Directive4 relating to the definition of the taxable amount and the right of deduction of input tax leave member states no discretion as regards their implementation and are sufficiently clear, precise and unconditional to confer on individuals rights on which they can rely before a national court5.

In determining whether an item forms part of the taxable amount, it is first necessary to consider whether it falls within the included or excluded categories and reference must be made to the general definition only if it does not6. The manner in which the included or excluded categories are reflected under UK legislation is described below and in V3.153–V3.159.

Supplies made for a consideration—UK legislation

The foregoing basis of valuation is subject to a number of derogations.

Special bases of valuation—open market value directions

HMRC may direct that a

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