The companies also provided for the guarding of the car parks 24 hours a day. The price was charged by the companies on a standard basis calculated based on the time the vehicles parked in the car park, i.e. the number of passengers and luggage transported by buses from the car par was irrelevant for pricing. The standard rate also covered the price of the transport to the airport but the ratio of the total price to the price of the transport varied from one service provider to the other. The companies believed that the transport to the airport should be treated as a separate supply of service subject to zero VAT rate and that no VAT is payable by them for this reason.
The UK authorities however found that the services constituted a single supply of service and were therefore taxable.
Main question asked from the European Court of Justice
Does the activity of the companies qualify as a single supply of service or two separate supplies of services?
ECJ found that the parking service and the relating transport services constitute a single supply of services in which the parking service element is predominant.
In this respect we may take into consideration the pricing of the services: the companies charged their customers a single price, which may be an indication, without being decisive, that there is a single supply. A further important circumstance relating to pricing is that the amount to be paid was calculated exclusively on the basis of the period for which the vehicle was parked, whereas the number of passengers and luggage transported from the car park was irrelevant for pricing. The pricing concept reflected the interests of the both parties concerned: the customer sought parking at an advantageous price while the sellers only offered the transport service in order to be capable of competing with the parking within the airport.
The importance of the parking element is further strengthened by the measures adopted by the sellers in order to guarantee the safety of the car park.
From the perspective of the service being a single service, the ratio of the transport services within the service price is insignificant. The proportion of the price of the transport service as against the price of the parking service varies considerably from one service provider to another without that difference affecting the provision of the service from the point of view of the customer.
In the decision, ECJ further refined the principles laid down in relevant earlier decisions. Based on this case, the characteristics of complex transactions can be summarized in the following, non-exhaustive and non-conclusive list:
- The parking service and the relating transport service as the main purpose of the transactions and the relating auxiliary payment handling service have to be regarded as a single supply of service.
- If the service provider quotes a standard price this fact may, without being decisive, suggest that the service supplied is in fact a single service.
- The fact itself that the elements of the single supply of service may, under different circumstances, be provided separately does not have relevance in this specific case.
- From the perspective of the service being a single supply of service, the ratio of the price of the parking service and that of the transport service within the single service has no decisive relevance, especially if this ratio has no effect on the nature of the service from the customer’s perspective.