Judgment;Summary — ECLI:EU:C:2023:739
Date: 2023-10-05
Language of the case: Polish
Court formation: Eighth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary C-146/22 – 1 
Case C-146/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
1 March 2022 
Referring court: 
Wojewódzki Sąd Administracyjny we Wrocławiu (Regional 
Administrative Court in Wrocław, Poland) 
Date of the decision to refer: 
28 January 2022 
Applicant: 
YD 
Respondent: 
Dyrektor Krajowej informacji Skarbowej 
  
Subject matter of the case in the main proceedings 
Value added tax (VAT); application of reduced rates 
Subject matter and legal basis of the reference 
The VAT Directive; Article 267 TFEU 
Questions referred 
1. Do Articles 2(1)(a) and (c), 14(1), 24(1), 98(1), (2) and (3) of Council Directive 
2006/112/EC of 28 November 2006 on the common system of value added tax 
(OJ L 347, 11 December 2006, p. 1; ‘the VAT Directive’), read in conjunction 
with Article 6(1) and (2) of Council Implementing Regulation (EU) No 282/2011 
of 15 March 2011 laying down implementing measures for Directive 
2006/112/EC on the common system of value added tax (recast; OJ L7, 23 March 
2011, p. 1) and with points 1 and 12a of Annex III to that directive, the fourth and 
EN 
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seventh recitals in the preamble to the VAT Directive, the principle of sincere 
cooperation, the principle of fiscal neutrality, the principle of fiscal legality and 
the principle of legal certainty preclude national legislation, such as that 
applicable in the present case, which provides for a reduced rate of VAT of 5% for 
food products including beverages containing milk, with reference to CN 2202, 
from excluding from that rate food products, including beverages containing milk, 
which are classified as food and beverage service activities on the basis of the 
Polish statistical classification (PKWiU 56), and applying to such goods (their 
supply or services) the reduced VAT rate of 8% if the average consumer, when 
purchasing such goods or services, treats them as meeting the same need? 
2. Is an administrative practice which results in the application of two different 
reduced rates of VAT to goods with the same objective characteristics and 
properties depending on whether services consisting in the preparation and serving 
of such goods are involved, thus excluding such goods on subjective rather than 
objective grounds, consistent with the principles of fiscal neutrality and legal 
certainty? 
Provisions of EU law relied on 
1. Council Directive 2006/112/EC of 28 November 2006 on the common 
system of value added tax (‘the VAT Directive’): Recitals 4 and 7, Article 2(1)(a) 
and (c), Article 14(1), Article 24(1), Article 98; Annex III, points 1 and 12a  
2. Council Implementing Regulation (EU) No 282/2011 of 15 March 2011 
implementing Directive 2006/112/EC on the common system of value added tax 
(recast) (‘Regulation No 282/2011’): Article 6 
3. Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and 
statistical nomenclature and on the Common Customs Tariff, as amended. 
(‘Regulation No 2658/87’): 
CN 2202 covers waters, including mineral waters and aerated waters, containing 
added sugar or other sweetening matter or flavoured, and other non-alcoholic 
beverages, not including fruit or vegetable juices of heading No 2009. 
Provisions of national law referred to 
1. The Polish Constitution: 
Article 217 provides that the imposition of taxes and other public dues, the 
determination of those subject to taxation and the rates of taxation, as well as the 
principles for granting tax reliefs and remissions, and also the categories of 
taxpayers exempt from taxation, shall be implemented by means of statute. 
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2. Ustawa o podatku od towarów i usług (Law on the tax on goods and 
services) of 11 March 2004 (Dz. U. of 2018, item 2174, as amended) (‘the Law on 
VAT’): 
Point 1 of Article 5(1) thereof provides that the supply of goods or services 
effected for consideration within the territory of the country is to be subject to 
VAT. 
Article 5a provides that goods and services which are the subject of the 
transactions referred to in Article 5 and which are mentioned in the classifications 
in a manner that corresponds to the combined nomenclature (CN) and is consistent 
with Regulation No 2658/87 or in classifications drawn up on the basis of the 
provisions relating to official statistics are to be classified according to the CN or 
the classifications drawn up on the basis of the provisions relating to official 
statistics to the extent that, with regard to such goods and services, the legal 
provisions and implementing regulations drawn up on such basis provide sections, 
headings, subheadings, CN codes or statistical classification symbols. 
Article 41 
[…] 
2. A rate of 7% applies to the goods and services listed in Annex 3 to the law with 
the exception of those classified according to the Polska Klasyfikacji Wyrobów i 
Usług (Polish Classification of Goods and Services) as falling under the food and 
beverage service activities division (PKWiU 56) 1 […]. 
2a. A rate of 5% applies to the goods and services listed in Annex 10 to the law 
with the exception of those classified according to the Polska Klasyfikacji 
Wyrobów i Usług as falling under the food and beverage service activities 
division (PKWiU 56). 
[…] 
12f. The rate referred to in paragraph 2 applies to the supplying of goods and 
services classified as falling under the food and beverage service activities 
division (PKWiU 56) with the exception of sales of:  
1) beverages other than those listed in Annex 3 or in Annex 10 to the law 
or by regulations made thereunder, including their preparation and 
service; 
[…] 
Annex 10 (List of goods and services taxed at the rate of 5%) to the Law on VAT 
refers exclusively, under heading 17, to ‘waters […] and other non-alcoholic 
 
1 Currently, 8% pursuant to point 1 of Article 146aa(1) of the Law on VAT. 
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beverages, excluding fruit and vegetable juices covered by CN heading 2009, to 
the following products: 1) yoghurt, butter milk, kephir, milk not covered by 
Chapter 04 of the CN, excluding products containing coffee and its extracts, 
essences or concentrates, […]’. 
3. Rozporządzenie Rady Ministrów z dnia 4 września 2015 r. w sprawie 
Polskiej Klasyfikacji Wyrobów i Usług (PKWiU) (Regulation of the Council of 
Ministers of 4 September 2015 on the Polish Classification of Goods and Services 
(PKWiU)) (Dz. U. of 2015, item 1676, as amended; ‘the PKWiU Regulation’): 
Paragraph 1. The Polska Klasyfikacja Wyrobów i Usług (PKWiU) (Polish 
Classification of Goods and Services (PKWiU)), hereinafter ‘the PKWiU 2015’, 
which is annexed to the regulation, is being introduced for use in statistics, records 
and documentation, including accountings records, as well as in official registers 
and public administration information systems. 
[…] 
Paragraph 3. For the purposes of:  
1) taxation [VAT] 
[…] [the PKWiU 2008] shall apply until 30 June 2020. 
Paragraph 3a For the purposes of taxation [VAT] with regard to the cases referred 
to in points (f) and (g) of Article 113(13)(1) of the law [on VAT], Annex 15 to 
that law and the implementing regulations issued on the basis of Article 111(8) 
thereof, [the PKWiU 2008] shall apply until 31 December 2020. 
[…] 
Paragraph 5 This Regulation shall enter into force on 1 January 2016. 
Division 56 of the annex to the PKWiU Regulation, ‘Food and beverage serving 
activities’, includes ‘Restaurants and mobile food serving services’; ‘Event 
catering services and other food serving services’; ‘Beverage serving services’. 
Succinct presentation of the facts of the case 
1 The dispute concerns the amount of the reduced rate of VAT applicable to the 
supply of the beverage ‘Classic Hot Chocolate’ – Hot chocolate prepared from 
milk and chocolate. 
2 In the opinion of the Dyrektor Krajowej informacji Skarbowej (Director of 
National Tax Information; ‘the tax authorities’) as set out in the binding 
information on rates of 17 June 2020 for the purposes of levying VAT, both the 
sale of that beverage to take away and for consumption on the premises must be 
regarded as the supply of goods. The activities consisting in the preparation and 
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serving of such goods to clients for immediate consumption constitute support 
services relating to that supply. However, referring to the wording of Articles 5a, 
41(1), 41(2), 41(12f) and points 1 and 2 of Article 146a(1) of the Law on VAT 
and the principles relating to the classification of services under the PKWiU 
applicable from 1 July 2020 by virtue of the PKWiU Regulation, such supply of 
goods was deemed to be subject to VAT at the rate of 8% since it must be 
regarded as a service classified as falling under PKWiU 56 – ‘Food and beverage 
serving activities’. 
3 The applicant lodged an objection against that decision, stating that the reduced 
rate of 5% was appropriate by analogy with the other supplies of goods referred to 
in Annex 10 to the Law on VAT. It claimed that there had been a breach of the 
principle of VAT neutrality, of the conditions of competition, the incorrect 
implementation of the Law on VAT and a similarity of common characteristics 
with respect to products similar to the beverage in question. 
4 By a decision of the tax authorities of 11 December 2020, the tax authorities 
upheld their own decision at first instance. 
5 The applicant appealed that decision before the Wojewódzki Sąd Administracyjny 
we Wrocławiu (Regional Administrative Court, Wrocław) (the referring court). 
Grounds for the reference 
First question referred for a preliminary ruling 
6 The referring court has doubts about whether the national legislature correctly 
transposed the provisions contained in paragraphs 1 to 3 of Article 98 of the VAT 
Directive. 
7 In order to establish an internal market, it is necessary to achieve such 
harmonisation of legislation on turnover taxes by means of a system of value 
added tax (VAT), such as will eliminate, as far as possible, factors which may 
distort conditions of competition, whether at national or Community level 
(recital 4 in the preamble to the VAT Directive). The common system of VAT 
should, even if rates and exemptions are not fully harmonised, result in neutrality 
in competition, such that within the territory of each Member State similar goods 
and services bear the same tax burden, whatever the length of the production and 
distribution chain (recital 7 in the preamble to the VAT Directive). The system 
should be clear and neutral (recital 5 in the preamble to the VAT Directive). 
8 Article 96 of the VAT Directive provides that the same rate of VAT, namely the 
standard rate, is applicable to supplies of goods and of services. By way of 
derogation from that rule, Article 98(1) of the VAT Directive confers on the 
Member States the option of applying either one or two reduced rates of VAT. 
The first subparagraph of paragraph two of that article provides that the reduced 
rates of VAT may be applied only to supplies of goods and services in the 
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categories set out in Annex III to the VAT Directive (judgment of 11 September 
2014, K Oy, C-219/13, EU:C:2014:2207, paragraphs 21 and 22). Moreover, the 
concepts used in that annex have a different meaning (see judgments of 1 October 
2020, X, C-331/19, EU:C:2020:786, paragraph 32, and of 22 April 2021, J.K., 
C-703/19, EU:C:2021:314, paragraph 38). The Court has stated that, in the 
context of that broad discretion enjoyed by the EU legislature when adopting a tax 
measure, the legislature intended, by way of the introduction of Annex III to the 
VAT Directive, to allow a reduced rate of VAT to be applied to essential 
commodities as well as to goods and services that serve to meet social or cultural 
needs, provided that doing so does not threaten to distort competition or only 
threatens to do so to a limited extent (judgment of 19 March 2019, Segler-
Vereinigung Cuxhaven, C-715/18, EU:C:2019:118, paragraphs 31 and 32, and the 
case-law cited). 
9 However, that option of applying different rates of VAT to goods or services 
cannot have the effect of exempting Member States from the obligation to comply 
with common rules (Opinion of Advocate General J. R. de la Toura delivered on 
12 November 2020, J.K., C-703/19, EU:C:2020:921, paragraph 52). 
10 Firstly, taxable transactions must be distinguished according to their specific 
purpose (see Articles 14(1) and 24(1) of the VAT Directive). That distinction is of 
a dichotomous nature: the supply of goods or of services. 
11 Secondly, according to the Court’s settled case-law, where a Member State 
decides to apply a reduced rate of VAT to one of the 24 categories of goods or 
services listed in Annex III to the VAT Directive, it must comply with the 
principle of fiscal neutrality (judgment of 9 March 2017, Oxycure Belgium, 
C-573/15, EU:C:2017:189, paragraph 28 and the case-law cited) and, where 
appropriate, limit its selective application to some of the goods or services in each 
of those categories (judgments of 9 March 2017, Oxhaven Belgium, C-573/15, 
EU:C:2017:189, paragraph 30 and the case-law cited, and of 19 December 2019, 
Segler-Vereinigung Cuxhaven, C-715/18, EU:C:2019:1138, paragraph 36 and the 
case-law cited). The principle of VAT neutrality precludes treating similar goods 
or services, which are in competition with each other, differently for VAT 
purposes. However, the principle of neutrality cannot have the effect of widening 
the scope of an exception in the absence of an express provision. That principle is 
not a rule of primary law, but an indication of interpretation which must be 
applied in conjunction with the principle that exceptions must be interpreted 
strictly (see judgment of 19 July 2012, Deutsche Bank AG, C-44/11, 
EU:C:2012:484, paragraph 45). 
12 It follows from the foregoing considerations that, provided that the transactions to 
which a reduced rate applies fall within one of the categories of Annex III to the 
VAT Directive and that the principle of fiscal neutrality is observed, the national 
legislature, by laying down, in its national law, the categories to which it intends 
to apply that reduced rate, is free to classify supplies of goods and services falling 
within the categories listed in Annex III to the VAT Directive according to the 
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method it considers most appropriate (judgment of 22 April 2021, J. K., C-703/19, 
EU:C:2021:314, paragraph 40). 
13 Thirdly, the fundamental principle underlying the common system of VAT 
consists in such system of taxation being a tax on consumption that is borne solely 
by the final consumer. VAT is precisely proportional to the price of the goods and 
services and it is collected by taxable persons at each stage of the production or 
distribution process on behalf of the tax authorities to which they are required to 
remit it. In accordance with the basic principle of such system and the conditions 
under which it operates, the VAT to be collected by the tax authorities must be 
equal to the tax actually levied on the final consumer (see, by analogy, judgments 
of 24 October 1996, Elida Gibbs, C-317/94, EU:C:2005:591, paragraphs 18-24, 
and of 6 October 2005, MyTravel, C-291/03, EU:C:2005:591). Furthermore, it is 
settled case-law that the common system of VAT established by the VAT 
Directive is based on the principle of fiscal neutrality, which precludes, amongst 
other things, economic operators carrying out the same transactions from being 
treated differently in relation to the levying of VAT (see judgment of 13 March 
2014, ATP PensionService, C-464/12, EU:C:2014:139, paragraph 44 and the case-
law cited). That is clear from the wording of Article 1(2) of the VAT Directive 
and recitals 4 and 7 of that directive. A provision of tax law must therefore be 
designed so as not to hinder operators (both Polish and foreign) from engaging in 
business within Polish territory. 
14 Among the categories to which the reduced rates of VAT may be applied, 
Annex III expressly mentions, in point 1, ‘foodstuffs (including beverages but 
excluding alcoholic beverages) intended for human consumption […]; Products 
normally used to supplement foodstuffs or as a substitute for foodstuffs.’ The 
VAT Directive and Regulation No 282/2011 do not contain any definition of the 
terms ‘foodstuffs intended for human consumption’ or ‘products normally used to 
supplement foodstuffs or as a substitute for foodstuffs’, nor do they contain any 
reference to the law of the Member States in that regard. Under those 
circumstances, those words must be interpreted in accordance with the usual 
meaning, in everyday language, of the words of which they are composed, while 
taking into account the context in which they occur and the purposes of the rules 
of which they form part (see, to that effect, judgment of 29 July 2019, Spiegel 
Online, C-516/17, EU:C:2019:625, paragraph 65). As regards, in the first place, 
the usual meaning in everyday language, it should be observed that all products 
containing nutrients which serve as building blocks, generate energy and regulate 
its functions, which are necessary to keep the human body alive and enable it to 
function and develop, and which are consumed for the purposes of providing it 
with those nutrients, are in principle ‘foodstuffs for human consumption’ 
(judgment of 1 October 2020, X, C-331/19, EU:C:2020:786, paragraphs 23 to 25). 
As regards, in the second place, the context, it should be noted that those two 
concepts designate products the supply of which is subject to a reduced rate of 
VAT, which constitutes an exception to the principle of the application of the 
standard rate of VAT. Those concepts must therefore be interpreted strictly (see, 
by analogy, judgments of 19 December 2019, Segler-Vereinigung Cuxhaven, 
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C-715/18, EU:C:2019:1138, paragraph 25, and of 1 October 2020, X, C-331/19, 
EU:C:2020:786, paragraph 30). 
15 Among the categories to which the reduced rates of VAT may be applied, 
Annex III also expressly mentions, in point 12a, ‘restaurant and catering services, 
it being possible to exclude the supply of (alcoholic and/or non-alcoholic) 
beverages’. However, those legal definitions are already included in Article 6 of 
Regulation No 282/2011, according to which restaurant and catering services 
mean services consisting of the supply of prepared or unprepared food or 
beverages or both, for human consumption, accompanied by sufficient support 
services allowing for the immediate consumption thereof. The provision of food 
or drink or food and drink is only one element in a larger whole in which services 
must predominate. Restaurant services are the supply of such services on the 
premises of the supplier, and catering services are the supply of such services off 
the premises of the supplier. The supply of prepared or unprepared food or 
beverages or both, whether or not including transport but without any other 
support services, shall not be considered restaurant or catering services within the 
meaning of paragraph 1 (Article 6(2) of Regulation No 282/2011). In addition, 
Article 98(2) of the VAT Directive, read in conjunction with point 12a of 
Annex III to the VAT Directive and Article 6 of Regulation No 282/2011 must be 
interpreted as meaning that the concept of ‘restaurant and catering services’ 
includes the supply of food accompanied by sufficient support services intended 
to enable the immediate consumption of that food by the end customer, which is a 
matter for the national court to determine. Where the end customer chooses not to 
benefit from the material and human resources made available by the taxable 
person to accompany the consumption of the food supplied, it must be concluded 
that no support services accompany the supply of that food (judgment of 22 April 
2021, J. K., C-703/19, EU:C:2021:314). That said, in the judgment cited above, 
the Court confirmed, in paragraph 54, the guidance given in its judgment of 
10 March 2011 in Bog and Others (C-497/09, C-499/09, C-501/09 and C-502/09, 
EU:C:2011:135, paragraphs 67 and 68 and in which it is stated that the supply of 
prepared food presupposes cooking or reheating, which constitutes the supply of 
services, must be taken into account in the overall assessment of the transaction 
concerned for the purposes of its classification as a supply of goods or services. 
However, if the preparation of a hot finished product is limited, in essence, to 
converging and standardised acts and is normally carried out not at the request of 
a specific customer but always and systematically, depending on demand 
generally foreseeable, that does not constitute the predominant element of the 
transaction in question and cannot, of itself, lead to that transaction being 
classified as a supply of services. 
16 Supplies of non-alcoholic beverages may be excluded from that category in line 
with point 12a of Annex III to the VAT Directive. 
17 According to the Court’s settled case-law, the principle of legal certainty requires 
that rules of law be clear, precise and predictable in their effects, in particular 
where they are likely to have negative consequences for persons and undertakings 
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(judgment of 10 September 2009, Plantanol, C-201/08, EU:C:2009:539, 
paragraph 46). Furthermore, the principle of legal certainty applies with particular 
rigour in the case of rules liable to entail financial consequences, in order that 
those concerned may know precisely the extent of the obligations which they 
impose on them (judgment of 16 September 2008, Isle of Wight Council and 
Others, C-288/07, EU:C:2008:505, paragraph 47). In addition, an obligation to opt 
specifically for a category of goods subject to a reduced rate of VAT is apparent 
from Article 98(3) of Directive 2004/38. That precision, indicated in Article 98(3) 
of the VAT Directive, can be achieved by using the CN. If a Member State does 
not use the CN, it must apply other criteria which have the quality of 
‘preciseness’. All that leads to the conclusion that the trader should know which 
rate of VAT should be applied without having to perform complex intellectual 
exercises or being obliged to refer a matter to the tax authorities in order to 
confirm the relevant VAT rate, which gives rise to a potential tax dispute. 
18 The principle of fiscal legality can be deemed a specific expression of the freedom 
to conduct business, the fundamental right to property and the general principle of 
legal certainty. That principle requires that any obligation to pay a tax, such as 
VAT, and all the essential elements defining the substantive features thereof must 
be provided for by law (see judgment of 8 May 2019, Związek Gmin Zagłębia 
Miedziowego, C-566/17, EU:C:2019:390, paragraph 39). Thus, the standard of 
protection afforded by EU law, in the light of constitutional traditions, requires 
that all the essential elements defining the substantive features of a tax be clearly 
defined in the relevant provisions. The VAT rate must be regarded as such a key 
element. The tax should be defined by legally binding rules available to taxpayers 
in a form that is sufficiently clear, precise and exhaustive to enable the taxable 
person concerned to foresee and determine the amount of tax due at a given time 
on the basis of the texts and data to which it has or could have access (Opinion of 
Advocate General Sharpston delivered on 6 December 2018, C-566/17, 
point 110). 
19 The Polish legislature applied reduced rates of VAT to ‘foodstuffs’ as indicated in 
point 1 of Annex III to the VAT Directive and to ‘restaurant and catering services’ 
as indicated in point 12a thereof. 
20 However, it provided for a reduced VAT rate of 5% for food products, in 
particular drinks containing milk, referring to CN 2202, and excluded from that 
rate food products, in particular drinks containing milk classified as food services 
on the basis of the Polish statistical classification (PKWiU 56) and applied a 
reduced VAT rate of 8% to such goods (deliveries or services). 
21 The legislative approach adopted means that the Polish legislature benefited from 
the reduced rate of VAT provided in point 1 of Annex III to the VAT Directive by 
referring to CN heading 2202 while simultaneously limiting the application of that 
rate by referring to the Polish statistical classification. 
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22 Thus, the first question which arises is whether the national legislature may have 
recourse to two completely different classification references for the same 
category of transactions subject to VAT. 
23 This raises concerns on the part of the referring court with regard to the precision 
of the legislation and legal certainty for traders required to keep separate accounts 
for the different rates of VAT as the provisions mean that it is not possible to 
determine which reduced rate is to be applied by simply reading the tax law. If 
determining the appropriate rate of VAT is problematic for Polish traders, it is all 
the more likely that traders from other Member States of the European Union will 
experience such problems, which manifestly creates an obstacle that distorts the 
common market. The application of two different rates of VAT disrupts 
competition in the common market because of the difficulties that taxable persons 
encounter in understanding them. 
24 The national legislature has created a tax procedure in which a taxable person 
requests binding information on rates pursuant to Article 42a et seq. of the Law on 
VAT. The resulting decision is then binding on the tax authorities for a period of 
five years. However, the trader must file an appropriate application three months 
before any possible transaction. That said, it cannot be ruled out that a taxable 
person may enter into a dispute with the tax authorities before an administrative 
court, which in reality means that such dispute may last several years. 
25 What is more, in so far as that binding information on rates is subject to change if 
there is a change in the CN (Article 42h(3) of the Law on VAT), that is not the 
case if an opinion is obtained which is different from the original one, e.g., a 
statistical opinion. 
26 The provisions of the Law on VAT refer to the PKWiU determined by the 
PKWiU Regulation. However, there can be legitimate concerns about whether the 
regulation can be applied for VAT purposes in its entirety after 30 June 2020 
(Paragraph 3(1) of the PKWiU Regulation), namely, whether the PKWiU 
methodological principles can be applied. That is not expressly stated in the 
wording of the PKWiU Regulation, nor does the Law on VAT expressly refer to 
the methodological principles of the PKWiU, which, in essence, pursue a different 
objective. 
27 A key aspect in terms of the principle of legality is that the semantic scope of a 
product, of a service subject to the reduced rate of VAT laid down by law is 
fundamentally modified by the provisions of the PKWiU Regulation which pursue 
a different objective, contrary to what is expressly stated in Article 217 of the 
Constitution. Thus, what is sufficient is willingness on the part of the executive, 
not the legislature, and the Law on VAT can be subject to semantic modification 
with regard to the selectivity of goods and services. 
28 Determining the extent of a category requires a taxable person to be familiar with 
the PKWiU methodological principles. In addition, the reference to the PKWiU 
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contained in the Law on VAT has, in essence, a tiered quality by referring to the 
PKWiU first of all and then to the Rozporządzenia Rady Ministrów w sprawie 
Polskiej Klasyfikacji Działalności (PKD) (Regulation of the Council of Ministers 
on the Polish Classification of Economic Activities) of 24 December 2007 (Dz. U. 
of 2007 No 251, item 1885) (‘the PKD Regulation’). 
29 The main assumption underlying the structure of the PKWiU 2015 (point 5.1.5) 
lies in the connection between the PKWiU and the PKD, so that each product is 
classified above all according to the activities which give rise to it. That 
classification is interpreted by reference to division 56, entitled ‘food and 
beverage service activities’ and the subclasses contained therein in the PKD 
Regulation.  
30 The term ‘food and beverage service activities’ used by the national legislature is 
broader than that of ‘restaurant services’ within the meaning of the VAT 
Directive. The Polish legislature constructs the semantic scope of the definition of 
‘restaurant services’ on the basis of the activities undertaken by specific operators 
rather than, as in the case of the VAT system, on the basis of the subject of the 
tax. What is more, the wording of Article 41(12f) of the Law on VAT states that 
supplies of goods are classified as ‘food and beverage service activities’ is 
misleading in that it is not consistent with the PKWiU methodology. That 
statistical classification classifies specific products (and not their supply) by 
PKWiU headings. 
31 Under previous legislation, Annex 10 to the Law on VAT only referred to the 
PKWiU. It was precisely that legal situation which gave rise to the judgment of 
22 April 2021, J. K., C-703/19, EU:C:2021:314. 
32 On the other hand, the current model for classifying a product by what it denotes 
ignores two aspects of the classification of goods by reason of the rate of VAT 
attributed to them: (i) functional similarity (satisfaction of the same need, 
irrespective of the manufacturing or service activity that results in a specific 
product); (II) the decision of the average consumer who, irrespective of the 
manufacturing activity resulting in the product, may regard them as competing 
with each other. 
33 It follows from the foregoing that the criterion of selectivity used by the national 
legislature is not sufficiently precise and unambiguous, which gives rise to too 
great a feeling discretion on the part the tax authorities with regard to the VAT 
rates applicable to products that meet the same need for the average consumer and 
which are taxed according to various reduced rates of VAT. The foregoing may 
give rise to legitimate concerns about conformity with the principle of VAT 
neutrality. 
34 Moreover, according to the methodological principles applied in the PKWiU 
Regulation (paragraph 7.3), it is the manufacturer (or supplier) who has a duty to 
assign a product to an appropriate grouping. In the event of difficulties in 
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determining the appropriate group to which a product belongs, the manufacturer 
or the supplier may request assistance from a statistical office unit. However, the 
statistical office does not take account of the specific features of the VAT system 
when it issues a statistical opinion. That applies particularly in the context of 
complex services, in that the system does not acknowledge them at all. That 
agency was established for statistical purposes and it cannot be required to take 
account of the case-law of the Court. Besides, such opinions are not formally 
binding. They merely serve as evidence in a tax procedure and the tax authorities 
have discretion in how they assess them. 
35 In addition, the legislature has introduced the institution of binding rate 
information, which is also based on the Polish statistical classification and which 
cannot be authoritative, if only for the aforementioned fact of not taking into 
account the concept of complex services. 
36 That is confirmed by Article 41(12f) of the Law on VAT, from which it is 
apparent that the national legislature refers to the Polish statistical classification 
which, unlike the VAT common system, refers to the concept of a taxable 
transaction. Its content implies classification of a supply of goods as a restaurant 
service, which is, in principle, inconsistent with the dichotomy of transactions 
subject to VAT (the supply of goods or services). It emerges directly from the 
settled case-law of the Court that transaction is a single supply where, in 
particular, two or more components or acts supplied by the taxable person are so 
closely linked that they form, objectively, a single, indivisible economic supply, 
which it would be artificial to split (judgments of 27 October 2005, Levob 
Verzekeringen and OV Bank, C-41/04, EU:C:2005:649, paragraph 22, and of 
29 March 2007, Aktiebolaget NN, C-111/05, EU:C:2007:195, paragraph 23). Such 
is also the case where one or more components are to be regarded as constituting 
the principal service, while one or more components are to be regarded, by 
contrast, as one or more ancillary services which share the tax treatment of the 
principal service. In particular, a service is regarded as ancillary to a principal 
service if it does not constitute for customers an aim in itself, but a means of better 
enjoying the principal service supplied (judgments of 25 February 1999, CPP, 
C-349/96, EU:C:1999:93, paragraph 30, and of 21 February 2008, Part Service, 
C-425/06, EU:C:2008:108, paragraph 52). 
37 That subdivision also applies to reduced rates, where the EU legislature makes a 
clear distinction, in Annex III, between the category of the supply of goods and 
that of the supply of services, specifying their scope. It is true that the Court, in its 
judgment of 22 April 2021, J. K., C-703/19, EU:C:2021:314, stated that it is open 
to the national legislature to classify in the same category different taxable 
transactions included in separate categories of Annex III, without formally 
distinguishing between supplies of goods and services. However, the assessment 
of a specific complex supply then determines its classification on the basis of the 
application of the reduced rates chosen by the Member State. That is apparent 
from the judgment of 10 November 2016, Pavlína Bastova, C-432/15, 
paragraphs 74-76.  
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38 Legal certainty could be affected if how national legislation is interpreted were to 
change depending on individual tax authorities (judgment of 7 March 2017, RPO, 
C-390/15, EU:C:2017:174, paragraph 59). Those principles must also be observed 
and have the same consequences where, for its implementation, EU legislation 
obliges Member States to adopt measures imposing obligations on individuals. 
The measures taken by the Member States pursuant to EU law must comply with 
the general principles of EU law (see, by analogy, judgments of 20 June 2002, 
Mulligan and Others, C-313/99, EU:C:2002:386, paragraphs 35 and 36, and of 
11 January 2007, Piek, C-384/05, EU:C:2007:21, paragraph 34). 
39 The Polish legislature establishes reduced rates of VAT without ensuring a 
constitutional standard of protection and, therefore, the implementation of the 
principle of fiscal legality. The rules amending the semantic scope of the reduced 
rate of VAT, as defined by law, are set out in the implementing regulation and 
there are doubts as to the application for VAT purposes of the PKWiU 
methodological principles. The Polish statistical classification methods are 
unrelated to the common system of VAT and the solutions used in the Law on 
VAT are also unrelated to the abovementioned classification system. Such hybrid 
solution may create difficulties for a taxable person who, without the assistance of 
the tax authorities, is expected to determine a reduced rate of VAT on his own.  
Second question referred 
40 The regulatory framework employed by the national legislature which comprises 
provisions that refers to two statistical classification systems (that of the EU and 
the domestic one) affects the settled practice of the tax authorities, which 
determine the scope of application of a reduced rate for goods such as those at 
issue. 
41 It appears that the tax authorities, in determining such scope, are not only relying 
upon the methodological principles underlying the PKWiU, but also the judgment 
of 22 April 2021, J. K., C-703/19, EU:C:2021:314. However, that judgment 
expressly refers to services supporting the supply of food or drink for restaurant 
and catering services (see paragraph 15 above). 
42 The problem is that the assessment of a particular supply as complex makes it, for 
VAT purposes, regarded as a single supply to which a single rate of VAT is to 
apply. There is no disagreement between the parties about this being a supply of 
goods in so far as, as is clear from the binding information on rates, ‘the sale of a 
product to be taken away or on the premises is to be regarded as a supply of 
goods. On the other hand, the activities of preparing and releasing those goods for 
direct consumption to the customer constitute supply supporting services.’ That is, 
moreover, what the applicant confirmed in its application. 
43 Thus, the applicant may legitimately question the validity of the application of a 
reduced rate of VAT of 8% where the tax authorities classify a transaction as a 
supply of goods for the purposes of VAT and the supply of supporting services 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-146/22 
 
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(preparation and serving) are regarded as having no decisive effect on the 
classification of such a transaction as a transaction subject to VAT. In such a 
situation, according to the applicant, the supply of the goods referred to in item17 
of the Annex 10 to the Law on VAT, that is to say (on milk drinks), must be 
subject to the reduced rate of 5% if it falls within the scope of that heading and 
satisfies the criterion of similarity. 
44 On the other hand, according to the tax authorities, services which, previously, 
were not decisive for the classification of a supply as a taxable transaction 
‘resurface’ as decisive for the application of a different reduced rate, namely 8% 
as in the case of services.  
45 The reasoning of the tax authorities, which is based on the reference to PKWiU 56 
and, above all, to its methodological principles, implies, as the applicant rightly 
points out, that, in the case of catering establishments, the law is interpreted in 
spite of the logic of the common system of VAT, that is to say, by taking into 
account the reduced rate (the PKWiU symbol and the methodological principles) 
conclusions are de facto drawn with regard to the item subject to VAT. 
46 The preparation of a beverage is of key importance for the tax authorities. 
However, the method of preparation or an additional choice on the part of the 
consumer cannot be of decisive importance in determining that there is no 
similarity between the goods. 
47 It is apparent from the case-law of the Court that the identity of the manufacturer 
or the supplier is irrelevant for the purpose of assessing the similarity of goods or 
services (judgment of 17 February 2005, Linneweber and Others, C-453/02 and 
C-462/02, EU:C:2005:92, paragraph 28). There is a presumption of similarity, in 
particular, where different goods and services fall within one single category of 
goods or services listed in Annex III to the VAT Directive (judgment of 
23 October 2003, Commission of the European Communities v Federal Republic 
of Germany, C-109/02, EU:C:2003:586, paragraph 12). The concept of similarity 
must be assessed by examining whether the goods at issue have similar 
characteristics and meet the same needs of consumers by analogy and by 
comparison of use and not on the basis of strict identity (see judgment of 
11 August 1995, F.G. Roders BV and Others, C-367/93 to C-377/93, 
EU:C:1995:261, paragraph 27). Consequently, in order to determine whether 
products are similar, it is necessary first to consider certain objective 
characteristics of both categories of beverages, such as their origin, the method of 
manufacture and their organoleptic properties, in particular taste and alcohol 
content, and secondly to consider whether or not both categories of beverages are 
capable of meeting the same needs from the point of view of consumers. 
(judgment of 4 March1986, John Walker & PMI, C-243/86, EU:C:1986:100, 
paragraph 11). An assessment of the similarity of goods within the meaning of the 
principle of neutrality is an expression of the principle of the elimination of 
distortion of competition (see judgment of 3 May 2001, Commission of the 
European Communities v French Republic, C-481/98, paragraph 22). It is 
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therefore necessary to examine whether the goods concerned are in competition 
and whether the different tax treatment entails a risk of distortion of competition 
(see judgment of 3 May 2001, Commission of the European Communities v 
French Republic, C-481/98, paragraphs 27 and 28). 
48 The applicant states that the taxation of a product (milk beverage) at the rate of 
8% infringes the principle of VAT neutrality, since there are substitutable 
products in the economic network which are subject to a reduced rate of 5%. It 
points out that the level of VAT influences consumer choice and results from a 
breach of the principle of VAT neutrality. 
49 There is no doubt that the taxable person should enjoy certainty with regard to the 
applicable rate of VAT and, as is apparent from the foregoing, the reasoning of the 
tax authorities is not sufficiently transparent and raises doubts, in the light of the 
common system of VAT, as to compatibility with the principle of VAT neutrality 
and with the principle of legal certainty.