The weather outside the window leads to the use of various types of shops and points offering cold drinks, ice cream or other products that allow you to relax from the heat wave for a while. However, let us remember that VAT functions independently of the air temperature outside, so it is worth looking at what the tax consequences may have, for example, our decision on the place of consumption of ice cream purchased in the ice cream shop.
In view of the existing problem with the attribution of the ‘to-go’ and ‘on-the-spot’ ice cream sales to the relevant VAT rate, the taxable person at the point of sale of such ice cream requested the Director of the National Tax Information to clarify which VAT rate should be applied to a particular ‘type’ of ice cream.
If we consume a product prepared with craftsmanship in a cozy place arranged by an entrepreneur for the purpose of running an ice cream shop, we acquire a service taxed at a rate 8%. And if we're going to eat ice cream outside of their place of sale, we're going to buy goods at a rate. 5%.
According to the taxpayer, the sale of ‘to-go’ ice cream will be subject to VAT 5%. On-the-spot ice cream sales 8%. The tax authority agreed with this position. Why the difference? The answer is very simple. The sale of ‘to-go’ ice cream is the delivery of goods, ‘on-the-spot’ is the provision of services.
The Court of Justice of the European Union’s judgment clearly explained this subtle difference C-231/94, where he pointed out that ‘transactions concerning restaurant activities (service provision) are characterised by a string of elements and activities, from the preparation of a meal to its physical application, (with infrastructure at the customer's disposal, including a dining room with adjacent premises), among which the supply of food products only constitutes one from components, and the provision of services prevails decisively." The supply of goods is characterised by the fact that "except for the supply of food products, transactions are not accompanied by services intended to organise consumption on the spot in the appropriate environment".
In short, if we consume a product prepared with craftsmanship in a cozy place arranged by an entrepreneur for the purpose of running an ice cream shop, we acquire a service. And if we're going to eat ice cream outside of their place of sale, we're buying goods.
Anything that does not fall within the category of supply of goods should be regarded as the provision of services.
Article 7 The VAT Act provides that by delivery of the goods referred to in Article 5(1)(1), the transfer of the right to dispose of goods as the owner is understood.
However, the provision of services is understood to mean any provision for a natural person, a legal person or an entity not having a legal personality which does not constitute a supply of goods within the meaning of (Article 8 VAT Act).
According to Article 2(6) Acts by goods are understood as things and parts thereof, as well as all forms of energy.
Therefore, anything which does not fall within the category of supply of goods should be regarded as the provision of services.
It should also be mentioned that, in order to correctly determine the VAT rate, it is necessary to assign the service or supply of goods to the relevant statistical classification. ‘It should be clarified that the classification referred to in the Act is the Polish Classification of Products and Services (PKWiU), which was implemented by the Council of Ministers Regulation of 29 October 2008 on the Polish Classification of Products and Services (PKWiU) (Journal of Laws, item 1293 as amended), which for the purposes of taxing goods and services under section 3 point 1 Regulation of the Council of Ministers of 4 September 2015 on the Polish Classification of Products and Services (PKWiU) (Journal of Laws of 2015, item 1676, as amended) valid until 31 December 2018”.
However, strong coffee is needed to explore the subject. Would you like to drink it on the spot or to go?
Source: Interpretation by day 17 May 2018 0111-KDIB3-1.4012.160.2018.2RSZ
Author:
Mikołaj Stanisławski
From 2017 Associated with Russell Bedford Poland. In 2007 graduated from the Faculty of Law and Administration of the University of Warsaw. In years 2008-2011 he made an attorney's application. From 2011 entered on the list of lawyers at the District Bar Council in Warsaw. In 2016 He graduated from the Postgraduate Tax Studies and Tax Law of the University of Warsaw. Specializes in tax and tax matters.