Supplies from EV charging stations

The decision of CJEU in Dyrektor Krajowej Informacji Skarbowej v P. in W (Case C-282/22) highlights that a supply of goods should not be overly dissected to identify separate elements of service within the supply so as to conclude that there is a single complex supply of services. In particular, in the case of a supply of goods (electricity in this case), any element which is simply a necessary prerequisite to provision of the goods (access to a technologically advanced charging station) should not be seen as a separate element of the supply at all.

As a result, supplies of electricity from charging stations were simply that - they did not amount to a complex supply of services even when supplied through advanced, fast charging stations and when accompanied by support services and the use of an app.

Background

The case concerned supplies made from electric vehicle charging points. The supplier pointed out that its supplies to electric vehicle users at recharging points involved a number of elements such that the supply should be considered a single complex supply of services. These elements included:

(a) the provision of charging devices (including integration of the charger with the vehicle operating system),

(b) the supply of electricity to the batteries of the electric vehicle, with either fast or normal charging options (and different prices)

(c) the necessary technical support for vehicle users, and

(d) the provision of an online platform, whereby users may reserve a particular connector and view their transaction and payment history.

The Polish tax authorities rejected that analysis, taking the view that the supply was a supply of electricity (a supply of goods under Article 15 of the Principal VAT Directive) and that any associated services were simply ancillary to that supply.

On appeal, the Polish court held that the supply amounted to a single complex supply of services. The primary intention of users of recharging stations was to enable them to recharge their vehicle quickly and efficiently such that from the point of view of the user concerned, the principal supply consisted of access to a recharging station and of the necessary integration of the charger with the vehicle operating system. The objective of such a transaction was not to obtain electricity, but rather to access technologically advanced recharging devices. The court noted that if users simply wished to purchase electricity for their electric vehicles, they would use their home network or that of their workplace instead of using public recharging stations. They chose to use the stations only because of the different standards of their connectors enabling the batteries of electric vehicles to be recharged more quickly and more efficiently. In addition, the court noted that the price depended on the recharging time, not simply the amount of electricity used.

The Polish tax authority appealed that decision and the matter was referred to the CJEU.

Decision of the CJEU

The CJEU has applied the usual approach to determining whether there is a single supply in this case and, if so, what is the determining characteristic of that supply.

In that regard, the Court noted that the marketing of goods is always accompanied by a minimal supply of services, and as such it is only services other than those which necessarily accompany the marketing of those goods which may be taken into account for the purpose of assessing the part played by the supply of services within the whole of a complex supply which also involves the supply of goods.

In this case, the transaction consisted of the supply of electricity to the batteries of an electric vehicle, which constitutes a supply of goods. That supply necessarily requires the use of suitable recharging devices, which may include a charger which is to be integrated with the vehicle operating system. "Consequently, granting access to those devices constitutes a minimal supply of services which necessarily accompanies the supply of electricity and may not, accordingly, be taken into account for the purpose of assessing the part played by the supply of services within the whole of a complex transaction which also involves that supply of electricity."

Moreover, the other elements of the supply were merely ancillary to the supply of electricity, including both the technical support which may be necessary for users and the provision of IT applications enabling the user to reserve a connector, to view his or her transaction history and to purchase credits for the purpose of paying for recharging sessions. These elements were not an end in themselves, but simply a means of better enjoying the supply of the electricity.

Accordingly, the transfer of electricity constituted the characteristic and predominant element of the single complex supply in this case.

That Court also confirmed that that finding was not called into question by the fact that the actual price paid depended in part on other factors, including the standing time during that recharging, or the fact that the unit price of a fast direct current recharging session was marginally higher than that of a slow alternating current recharging session. This was not sufficient to establish, from the point of view of the user concerned, the speed and efficiency of that recharging session as a characteristic and predominant element of the transaction.

Comment

It can be easy to be lured into a falsely complex analysis of a transaction for VAT purposes, considering each separate element of the transaction and concluding there is a single complex supply, the nature of which must be separately determined. A recent UK example might be the supply of introduction services in Gray & Farrar International. This case seems to be another example. The analysis of a supply of electricity to EV owners being unnecessarily complicated by reference to additional elements which all, essentially, simply enabled the user to access that electricity.

In that context, it is useful that the CJEU has emphasised that any element of a supply of goods that is simply a necessary prerequisite of obtaining the goods (here, access to the charging stations) is simply not a separate element of the supply at all.