What is the characteristic of a complex service?


One of the significant problems in the field of value added tax is the issue of taxation of the so-called complex benefits. The aforementioned act does not refer to the presented issue in any of its provisions, while in business transactions taxpayers very often deal with complex activities. On the part of entrepreneurs, there are doubts as to how to qualify a complex service and how to correctly determine the tax base.

The essence of the problem

Reflecting on the essence of the problem, it should be pointed out that treating a given activity as comprehensive gives rise to specific tax consequences, as under VAT a different tax rate may be applied in such a case. Due to the lack of any national and EU regulations regarding the definition of complex benefits, there is a risk of entering into a dispute with the tax office. In this case, the jurisprudence of the CJEU and Polish administrative courts, which have developed a certain concept of comprehensive services, becomes of key importance.

Compound service - features

First of all, it should be pointed out that each taxable activity should be treated as separate and independent. Where there is a certain set of benefits, the tax consequences should be applied to each activity. However, there are such transactions in trade where two or more activities performed by the taxpayer are so closely related that they objectively create only one, indivisible economic event, the separation of which would be artificial. Based on the case law, certain elements are distinguished that must be present in order for a given service to be considered comprehensive.

First, there must always be at least two component benefits to buyers. As a rule, it is a delivery of a certain good combined with the provision of a service relating to that good. At the same time, one of the benefits must be the basic benefit. Then the remaining ones are referred to as auxiliary, complementary.

Example 1.

The taxpayer purchased a new car engine with assembly in a garage. Therefore, we are dealing here with the delivery of goods in the form of a new engine and the provision of services in the form of its assembly.

Second, the components of a complex service must be closely related to each other so as to be indissoluble and form a single whole in economic terms. On the other hand, separating the components of that benefit for factual purposes would be artificial.

Example 2.

The taxpayer ordered a garage construction service from a construction company. This service includes the delivery of construction materials, their transport and execution. Each of these activities can be treated as a separate service, but their separation would be artificial, because the economic essence of a given transaction is to build a garage. This means that such a service can be treated as comprehensive.

Thirdly, it is emphasized that the purpose of the benefit must be considered from the perspective of the purchaser. As already mentioned, a complex service has a consistent character for a specific entity that purchases it as a whole. As has been pointed out, the buyer is interested in a specific economic purpose.

Example 3.

Taking into account the above example, from the buyer's point of view, the service of building a garage is crucial, while other activities, such as the purchase and transport of materials, are auxiliary and additional.


In the light of the above, it can therefore be concluded that the economic purpose of a given transaction is decisive in determining the complex performance. However, this cannot be determined by the subjective opinion of the seller or the content of the contract concluded between the contractors.

Example 4.

The contractors agreed to construct the garage decided that the transaction would be classified as a delivery of goods. This was also entered in the contract between the parties and on the invoice. The action of the parties is incorrect, because a given transaction should be considered in terms of its economic sense, and not the subjective belief of the parties.

We will meet the comprehensive service only when its content consists of at least two separate activities in the form of delivery of goods and provision of services. At the same time, in the case of the complex benefit, the main benefit must always be distinguished, which is the basis for determining the tax rate, and the auxiliary benefits that enable the use and performance of the basic benefit.

It should also be borne in mind that, from an economic point of view, for a given transaction, its individual activities must be so closely related that they objectively form a single entity from the economic point of view. If, on the other hand, one of the ancillary benefits is independent, they should be treated as a separate service and taxed at the appropriate tax rate.