It is common practice for suppliers to deliver the goods that
they supply at the premises of their customers on the
customer's request. The suppliers then either deliver the goods
themselves or they contract the services of third parties to
deliver the goods on their behalf, for which they charge a delivery
fee. The question that arises is whether the supplier should charge
value-added tax ("VAT") on the delivery
fee, particularly where the supplier acquires the services of a
third party to deliver the goods, and merely recovers the delivery
fee from the customer charged by the third party.
The tax court recently considered the VAT status of delivery
fees charged by a taxpayer that carries on a fast foods delivery
business. The taxpayer contracts with fast food outlets to
advertise their menus in a booklet, which it then distributes to
households in the area in which the taxpayer operates. Customers
order fast foods from the taxpayer by placing a telephonic
