Malta Chamber of SMEs unveiled its 50 proposals for Budget 2023
22 September 2022
The Malta Chamber of SMEs launched 50 proposals for Budget 2023 during a press...
The EU Court of Justice held that copies of records distributed for free as part of the group's promotional activities can be likened to "samples" and consequently exempted from VAT payment.
The dispute between EMI and the tax authorities, brought before the VAT & Duties Tribunal for England and Wales, concerns interpretation of Article 5 of the Sixth VAT Directive (77/388/EEC), as amended in 2006 (2006/112/EC), which exempts from VAT payment "applications for the giving of samples or the making of gifts of small value".
To promote its new music releases, EMI distributes anywhere from 2,500 to 3,750 free copies of each new record to journalists and other persons in a position to influence consumer behaviour. These 'pluggers' (promoters), who pass on the records to their own contacts, can receive up to 600 free copies for redistribution.
The court interpreted the concept of 'sample', which is not defined in the directive, along lines favourable to EMI. The ruling states: "That term cannot be limited, in a general way, by national legislation to specimens presented in a form which is not available for sale or to the first of a series of identical specimens given by a taxable person to the same recipient, unless that legislation allows account to be taken of the nature of the product represented and of the specific business context of each transaction in which those specimens are distributed".
The court also interpreted the concept of 'gifts of small value' found in the directive, but in this case along lines favourable to the UK authorities. It held that by setting a limit of £50 per year for the value of gifts made to the same person, the regulation does not overstep the margin of discretion granted to EU member states.
The Malta Chamber of SMEs represents over 7,000 members from over 90 different sectors which in their majority are either small or medium sized companies, and such issues like the one we're experiencing right now, it's important to be united. Malta Chamber of SMEs offers a number of different services tailored to its members' individual requirements' and necessities. These range from general services offered to all members to more individual & bespoke services catered for specific requirements.
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