Skip to main content Accessibility help
  • Print publication year: 2015
  • Online publication date: February 2015

5 - Taxable Supplies and Tax Invoices



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.

Amand, C., “When Is a Link Direct?7 VAT Monitor3 (Jan./Feb. 1996)
Krever, R., “Involuntary and Statutory Supplies – The Australian GST Base Narrows,” 16 Int’l VAT Monitor 19 (Jan. /Feb. 2005)
Pallot, M., “Local Authorities,” 14 Int’l VAT Monitor 496 (Nov./Dec. 2003)
Derks, R., “VAT Treatment of Electricity Transactions Under Swiss Law,” 13 Int’l VAT Monitor 267 (July/Aug. 2002)
Tait, A., Value Added Tax: International Practice and Problems (IMF 1988)
Stacey, P. & Brown, W., “A Unifying Composite Supply Doctrine? An Australian View,” 14 Int’l VAT Monitor 178 (May/June 2003)
Stacey, P. & Brown, W., “GST Treatment of Debt and Equity Income Streams: An Australian View,” 14 Int’l VAT Monitor 295 (July/Aug. 2003)
Botes, M., “South Africa: Single Supply?,” 15 Int’l VAT Monitor 470 (Nov./Dec. 2004)
Millar, R., “The Australian GST Treatment of Telephone Cards,” 14 Int’l VAT Monitor, 365 (Sept./Oct. 2003)