Facts
The [X. AG] , domiciled in Switzerland, provided various services in connection with the operation of an aircraft registered in the USA as a "Service Agent" for the [Y.] Ltd. domiciled in the USA. The Federal Tax Administration considered these services to be an indivisible service package subject to value added tax. The [X. AG] argued that these were several independent services. The Federal Supreme Court confirmed the view of the tax administration that the services should be treated as a single economic transaction.Considerations
The Federal Supreme Court stated that the services provided under the contract between [X. AG] and [Y.] Ltd. - such as provision of the crew, maintenance of the aircraft, management and operation, route and flight planning, coordination of flight activities, purchase of fuel, catering, etc. - are so closely related and intertwined economically that they must be considered as an indivisible whole. This constitutes a single service for which the principle of the place of performance applies uniformly. The services are therefore subject to value added tax at the place where…