Analysis: “VAT exemptions in non-exempt ancillary services: C-516/21 – Finanzamt X” by Darya Budova

The Judgement of the Court handed on 4 May 2023 (C-516/21 - Finanzamt X) deals with the interplay between the VAT exemption and the so-called single supply rule.

For the sake of context, the single-supply rule stems from the Courts’ case law establishing that, in the case of an economic transaction comprising a bundle of supplies, it is necessary to determine whether every single transaction is to be treated individually or whether they should rather be treated as an indivisible whole for VAT purposes (i.e., as a single supply). According to the Court’s case-law, there is a single supply where two or more elements or acts supplied by the taxable person are so closely linked that