Which VAT rate for maintenance services involving supplies of spare parts?

Lidia Adamek-Baczyńska, Olga Palczewska
Rzeczpospolita

The maintenance of plant, machinery or cars often involves not only the service itself but also a replacement of parts. A question arises as to what VAT treatment is applicable in such cases. Are these two separate supplies: of services and of parts, or one composite supply? This is especially important where one element of the overall service is subject to different tax treatment than the others, e.g. triggers split payment or is subject to a reduced VAT rate. The authors analyse the case practice of courts and tax authorities to resolve this issue.