Amsterdam Court of Appeal ruled that an intermission drink included in the ticket price is taxed with VAT at the low rate (9%).
In July 2021, we described in a article A judgment of the Court of Zeeland-West Brabant. Court of Appeal Amsterdam rules on the appeal against a ruling by the District Court of Noord-Holland, but both court cases are identical.
This is an operator offering a variety of performances. The ticket price consists of one amount, which includes admission to the show, use of the cloakroom, provision of a drink during the interval and booking fee.
The provision of admission to (inter alia) performances is subject to VAT at the reduced rate (now 9%). However, the provision of alcoholic beverages is subject to the standard rate (21%). The entrepreneur argues that the provision of alcoholic beverages at intermission is included in the price of admission and is therefore also subject to the reduced VAT rate.
Rule of law
Court and Tribunal agree on the applicable rule of law. The basic principle is that when different supplies can be distinguished, each of those supplies should be considered independent for VAT purposes. There are 2 exceptions to this principle:
- two or more acts or elements of an act are so closely connected that together they form one indivisible economic performance;
- one transaction should be deemed to constitute the main supply and the ancillary supplies follow the VAT regime of that main supply.
Average consumer
Unlike the courts, the Court held that the intermission drink did have to be seen as an ancillary service to the provision of access to the performances. This, the Court said, should be assessed from the perspective of the “average consumer”. The perspective of the supplier is irrelevant. For the average visitor to the performances, the interval drink is not an end in itself. It makes visiting the show more attractive. The Court considers it plausible that the interval drink is regarded by consumers as an attractive snack or an attractive conclusion to the theatre visit. The intermission drink included in the ticket price is therefore subject to VAT at the reduced rate, even if it is a beer or a glass of wine.