Kuwait Petroleum (GB) Ltd v Commissioners of Customs & Excise.
Date: 1999-04-27
16 As the Governments of the United Kingdom, France and Portugal have rightly pointed out, the grant of a rebate or a price discount presupposes that goods are supplied for consideration.  The very terms `rebate' and `price discount' indicate a merely partial reduction of the total price agreed.  Where, on the other hand, a reduction covers 100% of the price, the reality of the situation is that the goods are changing hands free of charge.  The disposal of goods free of charge falls within the scope of Article 5(6) of the Sixth Directive.
17 The answer to the first question must therefore be that, on a proper construction of Article 11A(3)(b) of the Sixth Directive, the terms `rebates' and `price discounts' cannot be applied to reductions covering the whole cost of supplying redemption goods.
Questions 2, 3 and 4
19 The first point to note is that, in the present case, the exchange of goods for Q8 vouchers was effected for business purposes, since - as the national court found - the object of the promotion scheme was, both for Kuwait Petroleum and for the independent retailers taking part, to increase fuel sales.  For that reason, a taxable person in the same situation as Kuwait Petroleum is authorised to deduct, in accordance with Article 17(2)(a) of the Sixth Directive, the amount of input VAT paid for the purchase of those goods.
21 On that point, it should be noted that the purpose of Article 5(6) of the Sixth Directive is to ensure equal treatment as between a taxable person who applies business assets for private purposes and an ordinary consumer who purchases goods of the same type (see Case C-20/91 De Jong [1992] ECR I-2847, paragraph 15, and Case C-230/94 Enkler [1996] ECR I-4517, paragraph 33).
23 Furthermore, as the Advocate General pointed out in paragraph 26 of his Opinion, that interpretation is supported by the legislative history of Article 5(6) of the Sixth Directive.  Point 6 of Annex A to the Second Council Directive 67/228/EEC of 11 April 1967 on the harmonisation of legislation of Member States concerning turnover taxes - Structure and procedures for application of the common system of value added tax (OJ, English Special Edition 1967, p. 16) and Article 5(3)((a) of the Commission's proposal for the Sixth Directive, submitted to the Council on 29 June 1973 (OJ 1973 C 80, p. 1) provided inter alia that applications for the purposes of giving samples or making gifts of small value, eligible for classification as general expenses giving tax relief, were not - contrary to the general rule - to be considered as taxable transactions.  It follows that, where the gifts are not of small value, such applications must be treated as taxable supplies, even where made for business purposes.
26 Goods are supplied `for consideration' within the meaning of Article 2, point 1, of the Sixth Directive only if there is a legal relationship between the supplier and the purchaser entailing reciprocal performance, the price received by the supplier constituting the value actually given in return for the goods supplied (see, to that effect, concerning the supply of services, Case C-16/93 Tolsma [1994] ECR I-743, paragraph 14).
28 As the Advocate General pointed out in point 43 of his Opinion, the sale of the fuel and the exchange of goods for vouchers are two separate transactions.
31 Second, it is not contested that the retail price of Q8 fuel, whether or not the purchaser accepted the vouchers, was the same, and this was the only price referred to on the invoice relating to the fuel purchase which, pursuant to Article 22(3) of the Sixth Directive, Kuwait Petroleum or the independent retailers had to issue to the customers who were themselves taxable persons.  That being so, Kuwait Petroleum cannot reasonably maintain that, contrary to the statements on the invoices which it issued, the price paid by the purchasers of fuel in fact contained a component representing the value of the Q8 vouchers or of the redemption goods.