British Sky Broadcasting Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 28 June 1994 |
| Date | 28 June 1994 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
British Railways Board v C & E Commrs VAT(1977) 1 BVC 116
C & E Commrs v Bass plc VAT[1993] BVC 34
Marleasing SA v La Comercial Internacional de Alimentación SA(Case C-106/89) [1990] ECR I-4135; [1993] 1 CEC 124
Performing Right Society Ltd v Hammond's Bradford Brewery Co Ltd ELR[1934] 1 Ch 121
Supply - Place of supply - Satellite broadcasting - Whether entertainment or television broadcasting - Where services physically carried out or performed (pre-1 January 1993) - Directive 77/388, the sixth VAT directive, eu-directive 77/388 article 9(1) article 9(2)art. 9(1) and 9(2)(c); Value Added Tax Act 1983, Sch. 5, Grp. 9, item 3.
The issue was the place of supply of the services provided by the appellant to residents of Ireland and the Channel Islands, both prior to 1 January 1993 and subsequently.
The company, which was situated in the UK, broadcast programmes by satellite on six channels. The appeal was concerned with four of these showing films and sports.
It operated by sending a signal from its studio into space which then returned amplified and re-broadcast on a different frequency. The beam widened out as it travelled to earth and could be received in the UK, Ireland and parts of Northern Europe. Subscribers paid a monthly subscription in return for which the chosen channels were received unscrambled by means of a satellite dish and an integrated receiver/decoder.
The appellant contended that it was supplying the services of entertainment, the place of supply of which was where the services were "physically carried out" (or "performed", prior to January 1993). Since the service could not be received until the signal was unscrambled, in practical terms the place of supply was where the recipient resided. For the purposes of the appeal this was outside the UK.
The commissioners contended that the appellant was supplying television broadcasting and since the subscriber paid whether or not he received the programmes what was supplied was a right to receive them. The service did not consist of entertainment so the place of supply was where the supplier had established his business, i.e. in the UK.
Held, dismissing the company's appeal:
1. The purpose of eu-directive 77/388 article 9(2)art. 9(2)(c) of Directive 77/388, the sixth VAT directive, was to create a more meaningful connection between the listed items than the location of the recipient. The location where they were physically carried out was used as it solved the problem of performers who physically moved between countries.
2. The appellant was supplying entertainment, albeit broadcasting as well, which was outside the scope ofeu-directive 77/388 article 9(2)art. 9(2)(c). That article was not applicable to supplies not involving performance before a live audience.
3. Since the place of supply did not fall within the exception in eu-directive 77/388 article 9(2)art. 9(2)(c),eu-directive 77/388 article 9(1)art. 9(1) applied. The place of supply was where the supplier belonged which in this instance was the UK.
4. There was no real distinction to be drawn between the terms "performed" and "physically carried out" so that the position prior to 1 January 1993 when the Value Added Tax (Place of Supply of Services) Order 1992 (SI 1992/3121) came into effect was the same.
[The tribunal set out the facts summarised above and continued as follows.]
Mr Miers for the appellant contends that the appellant is supplying entertainment within the ordinary meaning of that expression. I heard evidence from Mr David Elstein, the director of Programming. He has been involved in television since 1964. He selects the most popular films and expects to show 95 of the top 100 cinema films. Sport is chosen to have major appeal, like football and boxing. He relies on market research to...
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