Introduction

Most VAT regimes impose VAT on a supply only if it is for consideration, and there is a clear connection between the supply and that consideration. This chapter first examines the question, what is a supply for VAT purposes? It explores notions of supply, consideration, and the required link between a supply and the consideration received by the seller.

A sale for a single price may incorporate elements of multiple supplies that are taxed differently. For example, a portion of the supply, if independent, is taxable at a positive rate, and another portion, if independent, is exempt from tax. It is significant for VAT purposes if the transaction is respected as a single supply of these two components or is treated as two separate supplies. A major part of this chapter therefore focuses on resolving the perplexing question, what is “the supply”? In some cases, the VAT legislation and case law may draw a distinction between mixed supplies (with main and incidental elements) that are classified as a single supply of the main element and composite supplies that can be disaggregated and classified as multiple independent supplies.

Finally, a VAT invoice containing required information and issuable only by registered persons is considered central to a European-style invoice VAT. Some aspects of the VAT invoice are discussed in this chapter.