Facts
The [X. AG] operates the dining car and minbar service in trains and has been registered in the register of VAT-liable persons since January 1, 1995. In June 1998, the Federal Tax Administration conducted an audit and demanded VAT for the periods 1/95 - 1/98. The [X. AG] lodged an objection and later an appeal with the Federal Tax Appeals Commission, which dismissed the appeal.
The Federal Court now had to decide on the administrative appeal of the [X. AG] . The dispute concerned the legality of the administrative practice, according to which minbar sales are to be qualified as catering services and taxed at the standard rate.
Considerations
The Federal Court stated that the supply of food and beverages in the context of the minbar service in trains is to be qualified as a catering service within the meaning of Art. 27 para. 1 lit. a no. 1, 2nd lemma, VATO. This is because the [X. AG] offers the goods on the spot, i.e. in the train, and thus provides a special service.
The court pointed out that the practice of the Federal Tax Administration, according to which the possibility of consumption on the spot is given if special facilities or devices such as tables, chairs, benches or a counter are provided, is not objectionable. It is sufficient that the service provider provides special devices for consumption on the spot.
The Federal Court rejected the objections of the [X. AG] , according to which the supply of non-alcoholic beverages and food in the context of the minbar service in trains is not to be qualified as a catering service. It stated that the [X. AG] offers a different bundle of services than a…