Opinion of the Advocate General — ECLI:EU:C:2020:921
Date: 2020-11-12
Language of the case: Polish
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Poland

Summary C-703/19 - 1 
Case C-703/19 
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: 
24 September 2019 
Referring court: 
Naczelny Sąd Administracyjny (Supreme Administrative Court, 
Poland) 
Date of the decision to refer: 
6 June 2019 
Appellant: 
J.K. 
Respondent: 
Dyrektor Izby Administracji Skarbowej w Katowicach (Director of 
the Tax Administration Chamber in Katowice, Poland) 
  
Subject matter of the main proceedings 
Classification of a taxable person’s activities as food and beverage services 
subject to value added tax (‘VAT’) at a rate of 8% or as a supply of prepared 
dishes to which a VAT rate of 5% applies. 
Subject matter and legal basis of the reference 
The scope of the concept of a ‘restaurant service’ to which a reduced rate of VAT 
applies; Article 267 TFEU 
Questions referred 
1. Does the concept of a ‘restaurant service’ to which a reduced rate of VAT 
applies (Article 98(2) of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax (OJ 2006 L 347, p. 1, as amended), read in 
EN 
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conjunction with point (12a) of Annex III thereto and with Article 6 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 (OJ 2011 L 77, p. 1), cover the sale of prepared dishes under 
conditions such as those in the main proceedings, that is to say, in a situation 
where: 
- the seller makes available to the buyer the infrastructure which enables him 
or her to consume the purchased meal on the premises (separate dining space, 
access to toilets); 
- there is no specialised waiter service; 
- there is no service in the strict sense; 
- the ordering process is simplified and partly automated; and 
- the customer’s ability to customise the order is limited? 
2. Is the way in which the dishes are prepared, consisting in, in particular, the 
heating of certain semi-finished products and the composing of prepared dishes 
from semi-finished products, relevant to answering the first question? 
3. In order to answer the first question, is it sufficient that the customer is 
potentially able to use the infrastructure offered or is it also necessary to establish 
that, for the average customer, this element constitutes an essential part of the 
service provided? 
Provisions of EU law cited 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax (‘the VAT Directive’): Article 98, Annex III 
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 (‘Regulation No 282/2011’): Article 6 
Provisions of national law cited 
Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług (Law of 11 March 
2004 on the Tax on Goods and Services) (consolidated text: Dziennik Ustaw 
(Journal of Laws) of 2011, No 177, item 1054, as amended) (‘the Law on VAT’): 
Article 5a states that goods or services involved in transactions subject to VAT are 
to be ‘identified’ by means of statistical classifications (in so far as the relevant 
provisions stipulate statistical symbols for those goods or services). 
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Article 41(2a) provides that a tax rate of 5% applies to the goods listed in 
Annex 10 to that law. 
Item 28 of Annex 10 covers prepared meals and dishes classified under the 
PKWiU (Polish Classification of Goods and Services) grouping 10.85.1, except 
for products with an alcohol content in excess of 1.2%. 
Rozporządzenie Ministra Finansów z dnia 23 grudnia 2013 r. w sprawie towarów 
i usług dla których obniża się stawkę podatku od towarów i usług oraz warunków 
stosowania stawek obniżonych (Regulation of the Minister for Finance of 
23 December 2013 on goods and services to which a reduced rate of VAT applies 
and on conditions for applying reduced rates) (Dziennik Ustaw (Journal of Laws) 
of 2013, item 1719) (‘the Regulation of the Minister for Finance of 23 December 
2013’): 
Paragraph 3(1)(1) states that a reduced rate of VAT of 8% applies to the goods 
and services listed in the annex to that regulation. 
Annex — point III, item 7: 
Food and beverage services (PKWiU ex 56), except for sales of: (1) alcoholic 
beverages with an alcohol content in excess of 1.2%; (2) alcoholic beverages 
which are mixtures of beer and non-alcoholic beverages with an alcohol content in 
excess of 0.5%; (3) beverages prepared using a coffee or tea infusion irrespective 
of the percentage share of that infusion in the prepared beverage; (4) carbonated 
non-alcoholic beverages; (5) mineral waters; (6) other unprocessed goods taxed at 
the rate referred to in Article 41(1) of [the Law on VAT]. 
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) 
(Dziennik Ustaw (Journal of Laws) of 2015, item 1676) (‘the PKWiU 
Regulation’): 
Paragraph 3(1) provides that for VAT purposes, until 31 December 2017, the 
Polish Classification of Goods and Services introduced by the Rozporządzenie 
Rady Ministrów z dnia 29 października 2008 r. w sprawie Polskiej Klasyfikacji 
Wyrobów i Usług (PKWiU) (Regulation of the Council of Ministers of 
29 October 2008 on the Polish Classification of Goods and Services) is applicable. 
Division 56.1 of the PKWiU covers ‘restaurant and other catering establishment 
services’ (including ‘preparing and serving meals in restaurants’, ‘preparing and 
serving meals in self-service establishments’, and ‘other meal-serving services’). 
The above classification is interpreted by reference to Division 56 and its 
subclasses contained in the Rozporządzenie Rady Ministrów z dnia 24 grudnia 
2007 r. w sprawie Polskiej Klasyfikacji Działalności (PKD) (Regulation of the 
Council of Ministers of 24 December 2007 on the Polish Classification of 
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Economic Activities) (Dziennik Ustaw (Journal of Laws) of 2007, No 251, 
item 1885) (‘the PKD Regulation’). As clarified in the PKD Regulation, that 
division covers: service activities related to the provision of full meals intended 
for immediate consumption in restaurants, including self-service restaurants and 
establishments which offer meals ‘to take away’, with or without seating. What is 
important here is not the type of facility serving the meals but rather the fact that 
those meals are intended for immediate consumption. Subclass 56.10.A 
‘Restaurants and other permanent catering establishments’. That subclass includes 
the preparation and serving of meals to visitors seated at tables or visitors who 
choose dishes from the displayed menu, regardless of whether they consume the 
prepared meals on the premises, take them away or have them delivered. That 
subclass includes the activities of restaurants, cafés, fast-food restaurants, milk 
bars, fast-food bars, ice cream parlours, pizzerias and take-away establishments, 
as well as separate establishments operating as restaurants or bars in means of 
transport. 
Brief summary of the facts and procedure in the main proceedings and the 
arguments of the parties 
1 In September 2016, the tax audit office carried out a VAT audit of the taxable 
person who is the appellant in the main proceedings, which covered the period 
from January to June 2016. During the audit, incorrect VAT settlements were 
identified. As a consequence, by decision of 21 April 2017, the tax authority 
issued a VAT assessment to the taxable person for the period covered by the audit 
as a result of its determination that the taxable person’s entire activity consisted in 
food and beverage services taxed at a rate of 8% rather than in the supply of 
prepared dishes to which a rate of 5% applies. 
2 The essence of the dispute was whether the tax classification of specific products 
(meals and dishes) sold by the appellant and the application of the reduced rate of 
5% thereto (originally, the reduced rate of 8% had been applied) was correct. 
Those products are intended for immediate consumption by customers within a 
chain of establishments. The end product is prepared on site from semi-finished 
products. Prepared meals and dishes are served hot or cold in a form which is 
ready for consumption on the premises or can be taken away. 
3 Within the framework of his economic activity, the taxable person uses a variety 
of sales methods: 
– sales of products to customers inside restaurants; 
– sales of products from the window or counter of a restaurant for consumption 
outside that restaurant (‘drive-in’ or ‘walk-through’); and 
– sales of products to customers in designated zones inside shopping centres 
(‘food courts’). 
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4 The tax authorities of both instances disagreed with the appellant’s position that 
his product sales satisfy the conditions for the supply of goods set out in 
Article 7(1) of the Law on VAT (Article 14(1) of the VAT Directive). The 
authorities referred to Article 98(2) of the VAT Directive, which provides that 
Member States may apply reduced rates to prepared meals and dishes where the 
transactions involving such meals and dishes are classified as supplies of goods or 
services. Article 98(3) of that directive authorises Member States to use the 
Combined Nomenclature to establish the coverage of the category concerned. 
Poland took advantage of that option in Article 5a of the Law on VAT, with the 
proviso that the provisions on reduced rates of VAT refer to PKWiU symbols. 
Thus, inclusion in PKWiU code 10.85 ‘Prepared meals and dishes’ means a rate 
of 5%, and inclusion in PKWiU code ex 56 ‘Food and beverage services’ 
(restaurant services and other catering services) means a reduced rate of 8%. The 
authority emphasised that the disputed transactions satisfy both conditions 
referred to in Article 7(1) of the Law on VAT and Article 14(1) of the VAT 
Directive, namely: (I) the subject matter of the transaction is goods; and (II) the 
right to dispose of the goods as owner is transferred. 
5 The tax authority found that ready-for-sale dishes are made from semi-finished 
products which are processed by the staff. The packaging system for the products 
enables them to be consumed anywhere. The establishments also have other 
characteristics typical of restaurant/catering services such as, inter alia, the 
availability of a dining space and toilets, the provision of a number of customer 
services, Internet access and newspapers available to customers, heating/air 
conditioning of the premises, the playing of music on the premises and cleaning of 
the premises. 
6 By judgment of 1 March 2018, the Wojewódzki Sąd Administracyjny w 
Gliwicach (Regional Administrative Court in Gliwice, Poland) dismissed the 
appellant’s action. That court pointed out that it is essential to determine whether a 
supply of goods or rather a supply of services has taken place in a given case. This 
requires consideration of all the circumstances in which the transaction occurred 
in order to determine its characteristics and dominant features. The provision of 
the service at issue cannot be regarded as a supply of goods, as the meals are 
prepared and served on the trader’s premises and the customer has the option of 
consuming the purchased meal, even if it is served ‘to take away’, on the 
premises, and to take advantage of all the associated facilities. 
7 The appellant brought an appeal on a point of law against the judgment of the 
court of first instance before the referring court, which decided to make a 
reference to the Court of Justice for a preliminary ruling. 
Reasons for the reference 
8 The requirements of the VAT Directive must be taken into account in order to 
determine the proper way to tax the transactions at issue. In the view of the 
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referring court, the correct determination of the requirements arising from EU law 
and from the case-law of the Court of Justice raises doubts that necessitate a 
reference for a preliminary ruling. 
9 In point (1) thereof, Annex III to the VAT Directive lists, inter alia, foodstuffs 
(including beverages except for alcoholic beverages) for human and animal 
consumption, and in point (12a) it refers to restaurant and catering services, it 
being possible to exclude the supply of (alcoholic and/or non-alcoholic) 
beverages. 
10 It is apparent from the case-law of the Court of Justice that the term ‘foodstuffs’ 
refers to foodstuffs in general and makes no distinction or restriction whatever 
according to the kind of business, method of selling, packaging, preparation or 
temperature of the meal. In cases of the supply of goods, the term ‘foodstuffs’ in 
category 1 of Annex H to the Sixth Directive (currently Annex III to the VAT 
Directive) must be interpreted as also covering dishes and meals which have been 
prepared for immediate consumption by boiling, grilling, roasting, baking or other 
means (judgment of 10 March 2011, Finanzamt Burgdorf and Others, C-497/09, 
C-499/09, C-501/09 and C-502/09, EU:C:2011:135). 
11 For its part, ‘restaurant services’ should be construed as in Article 6 of Regulation 
No 282/2011 and in the case-law of the Court of Justice. 
12 The Polish legislature implemented Article 98 of the VAT Directive together with 
Annex III thereto in such a way that, pursuant to Article 41(2a) of the Law on 
VAT, the tax rate applicable to the goods listed in Annex 10 to that law is 5%. 
Item 28 of Annex 10 covers ‘prepared meals and dishes, except for products with 
an alcohol content in excess of 1.2%’ (ex 10.85.1). 
13 Pursuant to Paragraph 3(1)(1) of the Regulation of the Minister for Finance of 
23 December 2013, a reduced rate of VAT of 8% applies to the goods and 
services listed in the annex to that regulation. In point III, item 7 thereof, that 
annex refers to ‘food and beverage services’ (PKWiU ex 56), with certain 
exceptions. 
14 In national case-law, the view has already been expressed that the Polish 
legislature could apply the reduced rate only to ‘restaurant services’ as defined in 
Article 6 of Regulation No 282/2011 and in the case-law of the Court of Justice. 
15 In the view of the referring court, the way in which the national legislation defines 
the scope of the concept of ‘restaurant services’ laid down in the VAT Directive is 
questionable. The construction used in national law not only has different wording 
(‘food and beverage services’ as opposed to ‘restaurant services’), but also refers 
to PKWiU ex 56, a classification whose nature is alien to the common system of 
VAT. 
16 Pursuant to Paragraph 3(1) of the PKWiU Regulation, until 31 December 2017 the 
Polish Classification of Goods and Services was applied for VAT purposes. 
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Division 56.1 of the PKWiU covers ‘restaurant and other catering establishment 
services’. The above classification is interpreted by reference to the description of 
Division 56 and its subclasses contained in the PKD Regulation. 
17 In national case-law, the view has been expressed that the term ‘food and 
beverage services’ used by the national legislature is broader than the term 
‘restaurant services’ within the meaning of the VAT Directive. The activity 
classification methodology for statistical purposes differs significantly from the 
activity classification methodology for VAT purposes. 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. 
18 The way in which ‘restaurant services’ are defined in the PKWiU affected the 
scope of regulation of the category ‘Prepared meals and dishes, except for 
products with an alcohol content in excess of 1.2%’ (ex 10.85.1). In the PKWiU, 
the name of that category is ‘Prepared meals and dishes’. Only the PKD reference 
narrows that category down to subclass 10.85.Z ‘Manufacture of prepared meals 
and dishes’. That subclass covers the production of prepared meals and dishes but 
does not include the preparation of meals for immediate consumption, which is 
included in the relevant subclasses of Division 56. 
19 Such a way of regulating the scope of ‘restaurant services’ gives rise to doubts on 
the part of the referring court. 
20 Firstly, the Polish legislature had the option of using the Combined Nomenclature 
to establish the coverage of the category of goods concerned when applying 
reduced rates, but did not make use of that option. Although a relationship with 
the Combined Nomenclature is indicated in the PKWiU, that relationship cannot 
be considered at an abstract level. 
21 Secondly, when creating a specific category of goods to which a reduced rate 
applies, the Polish legislature referred to the Polish statistical classification, in 
which transactions are understood differently than under the VAT system. In 
particular, it could be questioned whether the statistical classification ‘Food and 
beverage services’ is not overly broad compared to the EU definition of 
‘restaurant services’, thus affecting the scope of the category ‘Prepared meals and 
dishes’ and the definitions of the terms used. 
22 The referring court is of the view that the concept of ‘prepared meals and dishes’ 
must be interpreted in accordance with the normal sense of the terms at issue 
(judgment of 4 June 2015, Commission v Poland, C-678/13, EU:C:2015:358, 
paragraph 46). ‘Meals and dishes’ should satisfy two conditions: they should be 
intended for human consumption and should be prepared for immediate 
consumption; the manner of their preparation for consumption on the premises is 
of no relevance here (judgment of 10 March 2011, Finanzamt Burgdorf and 
Others, C-497/09, C-499/09, C-501/09 and C-502/09, EU:C:2011:135). 
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23 However, in order to find that the national law constitutes an incorrect 
implementation of Article 98(1) to (3) of the VAT Directive, it must first be 
established that the decisive factor in determining whether the reduced rate of 
VAT of 5% is applicable is that, as is argued by the tax authorities, the services in 
question are not classified under the PKWiU grouping 10.85.1. 
24 Conversely, rejection of the tax authorities’ position makes it possible to verify if 
in the case at hand it is relevant whether it is a ‘restaurant service’ within the 
meaning of Article 6 of Regulation No 282/2011 which is at issue. 
25 If the position of the tax authorities and of the court of first instance that statistical 
classifications are the decisive factor in determining the appropriate rate 
applicable to the appellant’s sales of prepared dishes is called in question, this 
means that the classification of such services as ‘restaurant services’ or their 
exclusion from the scope of that category is crucially significant. 
26 In that context, the conditions under which those prepared dishes are served are of 
primary importance. Those conditions differ as a result of the different sales 
systems used by the appellant to conduct transactions. 
27 When selling on the premises, the appellant makes available to the buyer the 
infrastructure that enables him or her to consume the purchased meal on site, there 
is no specialised waiter service, the ordering process is simplified and partly 
automated, and the customer’s ability to customise the order is limited. 
28 All the circumstances on which the tax authorities and the court of first instance 
have focused obtain only when the appellant sells his goods directly on the 
premises. However, several sales systems are used: on the premises, ‘walk-
through’, ‘drive-in’, and ‘food court’. 
29 The ‘drive-in’/‘walk-through’ sales system involves the sale of food products to 
customers who drive up in their cars to a counter outside the sales establishment 
(drive-in) or to those who walk up to a separate counter (window), which is also 
situated outside the sales establishment (walk-through). 
30 This system is targeted at customers who, for objective reasons (mainly to do with 
having little time), do not expect the appellant to provide them with any 
infrastructure. Their expectations are limited to receiving a prepared dish which 
they can consume outside the premises. 
31 By contrast, a ‘food court’ is a sales system used in shopping centres which 
consists in selling defined products to customers in special zones designated for 
that purpose. ‘Boxes’ — stands run by operators offering food products — are 
located within these zones. Within these boxes, each operator has at his or her 
disposal a checkout/sales area, a kitchen area, in some cases also a storage area, 
and a dining area — a common area where the customers of those operators may 
consume their meals. The customer receives a ready-made fast-food meal in 
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disposable packaging, which he or she can take away or eat in the dining area. 
There are no other restaurant facilities and there is no cloakroom. 
32 Therefore, in the ‘drive-in’, ‘walk-through’ and ‘food court’ systems, the 
customer is potentially able to use the infrastructure offered, but for the average 
customer this element does not appear to constitute an essential part of the service 
provided — in contrast to sales in restaurants. 
33 Furthermore, there is the question whether the way in which the dishes are 
prepared, consisting in, in particular, the heating of certain semi-finished products 
and the composing of prepared dishes from semi-finished products, is relevant. 
34 It should be pointed out that the appellant makes a valid argument that in his sales 
systems the waiting time for products is meant to be as short as possible and does 
not exceed a few minutes in practice. This quick provision of products is possible 
because their preparation is limited to basic standard actions and for the most part 
takes place in a continuous and regular fashion according to demand that is 
generally foreseeable (no specialist catering staff work at the appellant’s 
establishments); the products offered by the appellant are placed in packaging that 
enables customers to move around freely with them. The buyer can take the 
purchased goods in hand, like any other food product, and leave the premises with 
them without using the establishment’s infrastructure at all. Owing to the nature of 
the appellant’s activities, no crockery or cutlery is provided. 
35 In the view of the referring court, it appears in the light of the case-law of the 
Court of Justice that the preparation of a hot product which is ready for 
consumption cannot in itself characterise the transaction in question as a supply of 
services (see, in particular, judgment of 10 March 2011, Finanzamt Burgdorf and 
Others, C-497/09, C-499/09, C-501/09 and C-502/09, EU:C:2011:135, 
paragraphs 68 and 89). 
36 The referring court also wishes to emphasise that each of the ways in which the 
appellant sells prepared dishes contains elements of both a supply of goods and a 
supply of services. The only differences are the extent of the infrastructure offered 
and the customers’ expectations as to the range of service elements. In the view of 
the referring court, the sale of prepared dishes on the premises involves the largest 
share of service elements and the ‘drive-in’/‘walk-through’ sales system involves 
the smallest share. However, irrespective of the type of sales system under 
examination, the service element (including the option of consuming the 
purchased meal on the premises) is only of a potential nature and is dependent on 
the choice made by the customer. Owing to the simplified sales system and the 
way in which the purchased dishes are served and packaged, it is not possible to 
determine (at the sales stage) whether the dish being sold will be consumed on the 
premises or is being purchased ‘to take away’. This makes it difficult to correctly 
assess whether (and if so, whether this applies to all the sales systems operated by 
the appellant) the service element is of sufficient importance to justify the 
conclusion that the transaction at issue must be treated as a supply of services. 
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37 The referring court also has additional doubts arising from the fact that the criteria 
for distinguishing between a supply of goods and a supply of services in the 
context of the supply of prepared meals and beverages were introduced by the 
Court of Justice in its judgment of 2 May 1996, Faaborg-Gelting Linien, 
C-231/94, EU:C:1996:184, which was delivered prior to the introduction of the 
EU definition of restaurant and catering services (Article 6 of Regulation 
No 282/2011). Therefore, it is doubtful whether those criteria likewise remain 
valid for the purposes of assessing whether a restaurant service is at issue in the 
present case. In the opinion of the referring court, a modification of the views 
expressed by the Court of Justice in the aforementioned judgment may be 
warranted, inter alia, by the fact that if the transaction at issue is recognised as 
being a restaurant service, a reduced rate of VAT will be applicable to it and, 
according to the settled case-law of the Court of Justice, in matters of VAT, 
provisions which are in the nature of exceptions to a principle must be interpreted 
strictly, while ensuring that the exception is not deprived of its effectiveness (see, 
inter alia, judgments of 30 September 2010, EMI Group Ltd, C-581/08, 
EU:C:2010:559, and of 20 October 2010, Commissioners v AXA UK, C-175/09, 
EU:C:2010:646).