Chargeable event, chargeability and collection of VAT EU VAT case law

C-696/22 C (Court-appointed administrators and liquidators)

Judgment · 13 June 2024 · Romania

Chargeability on continuous services and proof of the link for input deduction

Such continuous services fall within Article 64(1) where they give rise to successive statements of account or payments, so VAT becomes chargeable on expiry of each period irrespective of non-payment. Article 90(1) governs non-payment. Increased turnover or volume of taxable transactions is irrelevant to the deduction link. The objective content, actual use and exclusive reason for the purchase decide. A hearing breach requires annulment only if the outcome might have differed, suspension of enforcement being irrelevant. Suppliers billing periodically, insolvency practitioners, professional firms and any provider with milestone or periodic fee arrangements, cannot defer chargeability by making payment conditional on the customer's cash position.

C-657/22 Bitulpetrolium Serv

Judgment · 25 April 2024 · Romania

VAT on penalty excise duty for energy products reintroduced into a tax warehouse

Directive 2003/96 and the principle of proportionality preclude both practices. Energy products must be taxed according to actual use. Imposing the motor fuel rate as a penalty for breach of formal conditions, without allowing the operator to prove actual use, exceeds what is necessary to counter evasion. Although Article 78(1)(a) prima facie brings excise duty into the taxable amount, VAT on the additional excise duty is not due unless a taxable supply of the product for use as a motor fuel actually takes place. Relevant to fuel distributors, tax warehousekeepers and their advisers in Member States that convert documentary or notification breaches into the higher motor fuel excise rate.

C-489/20 Kauno teritorinė muitinė

Judgment · 7 April 2022 · Lithuania

Extinguishment of the customs debt and survival of import VAT and excise duty

The customs debt is extinguished on seizure and subsequent confiscation even where the goods had already been unlawfully introduced. Unlike the 1992 Code, Article 124(1)(e) sets no timing condition. But neither Directive 2008/118 nor the VAT Directive contains any equivalent extinguishment provision. Once the goods have gone beyond the first customs office inside the territory, importation and release for consumption have occurred, the chargeable events have taken place, and excise duty and import VAT remain due regardless of the customs position. Confirms the customs and VAT/excise regimes have decoupled on extinguishment.

C-9/20 Grundstücksgemeinschaft Kollaustraße 136

Judgment · 10 February 2022 · Germany

Timing of input tax deduction where the supplier accounts for VAT on a cash basis

Article 167 precludes such legislation. Where a Member State uses the Article 66(b) derogation so that VAT becomes chargeable to the supplier only on receipt of payment, the customer's right of deduction likewise arises on payment. The link between chargeability and deduction may be severed only within the optional and much narrower scheme of Article 167a, which Germany had not adopted. The second question did not require an answer. Where a supplier accounts for VAT on a cash basis under an Article 66(b) derogation, the customer's deduction right follows the supplier's chargeability and not the time of supply.

C-324/20 X-Beteiligungsgesellschaft (VAT – Successive payments)

Judgment · 28 October 2021 · Germany

Chargeability on a one-off service paid in instalments

Article 64(1) does not cover a one-time supply paid in instalments. It applies only where the nature of the service itself justifies periodic payment, that is, continuous or recurrent supplies performed over defined periods where the completion date is not unambiguous. Article 90(1) does not assist. An instalment not yet fallen due is not non-payment, since the agreed consideration is unchanged. Pre-financing the VAT does not alter that. The supplier owes output tax regardless of receipt. Relevant to anyone structuring one-off services (brokerage, corporate finance, agency, consultancy) with deferred or staged fee payments.

C-855/19 Dyrektor Izby Administracji Skarbowej w Bydgoszczy (Acquisitions intracommunautaires de gazole)

Judgment · 9 September 2021 · Poland

Early payment of VAT on intra-Community acquisitions of fuel

Articles 69, 206 and 273 preclude such a rule. Chargeable event, chargeability and the obligation to pay are three successive stages: the interim payment option in the second sentence of Article 206 lets Member States bring forward the date of payment only of VAT that has already become chargeable, not the date of chargeability itself. Article 273 cannot justify a measure conflicting with other provisions of the Directive. The remaining questions did not need answering. Traders making intra-Community acquisitions of excise goods, particularly fuel wholesalers and tax warehouse operators, can challenge accelerated payment demands and associated late payment interest where the deadline falls before invoice issue or the fifteenth day of the following month.

C-7/20 Hauptzollamt Münster (Place where VAT is incurred)

Judgment · 3 March 2021 · Germany

Member State where import VAT arises on undeclared goods

Import VAT arises in the Member State where the customs breach is established, but only where the goods entered the economic network of the Union in that Member State. Physical first entry elsewhere does not displace that result. The presumption that goods entered the economic network where the breach occurred can be rebutted by showing they were introduced for consumption via another Member State, as in Federal Express, where mere transhipment took place. Confirms that competence for import VAT follows economic consumption, not the deemed place of the customs debt.

C-26/18 Federal Express Corporation Deutsche Niederlassung

Judgment · 10 July 2019 · Germany

Place of import VAT where customs irregularities occur in a transit Member State

The first question was inadmissible as hypothetical, since the goods demonstrably entered the economic network. On the second, customs infringements in a Member State which generate a customs debt there do not suffice to locate entry into the Union economic network in that State. The presumption of entry where goods are unlawfully introduced or removed from supervision is rebuttable. Where the goods are shown to have been carried onwards to another Member State, their final destination, and consumed there, import VAT arises only in that latter State.

C-224/18 Budimex

Judgment · 2 May 2019 · Poland

Time of supply of construction works and formal acceptance by the client

Article 66, first paragraph, point (c) does not preclude treating formal acceptance as the time of supply. But only if the acceptance formality was agreed in the contract on terms reflecting the economic and commercial realities of the sector, and if it constitutes the actual completion of the service and determines the consideration due, a matter for the national court. Other formalities, such as a breakdown of expenses or a final payment certificate, are not decisive. Relevant to contractors, engineering and installation businesses and their advisers in Member States that time chargeability by reference to the date of supply plus an invoicing deadline.

C-422/17 Skarpa Travel

Judgment · 19 December 2018 · Poland

VAT on payments on account under the travel agents' margin scheme

The special scheme is not a self-contained regime. Only the rules on place of supply, taxable amount and deduction are displaced, so Article 65 applies and VAT is chargeable on receipt of the payment on account, provided the tourist services are precisely designated at that time. Where actual costs are not yet incurred or cannot be determined, the margin may be estimated from the projected total cost, taking account of costs already incurred, with adjustment once the definitive individual cost is known. For tour operators and travel agents using the margin scheme, VAT on a deposit is due as received rather than on completion of the trip, provided the trip is identifiable by destination and dates.

C-548/17 baumgarten sports & more

Judgment · 29 November 2018 · Germany

Chargeability of commission paid in conditional instalments

Article 63, read with Article 64(1), precludes treating the chargeable event and chargeability as arising when the player is placed. Where a supply gives rise to successive payments, it is regarded as completed on expiry of the periods to which those payments relate, so VAT is chargeable then. The Court indicated that an agency service remunerated by conditional instalments over several years following the placement appears to be of that kind, but left it to the referring court to verify that Article 64(1) applies.

C-571/15 Wallenborn Transports

Judgment · 1 June 2017 · Germany

Import VAT on goods removed from customs supervision in a free zone

Free zones fall within the situations referred to in Article 156, so goods placed there are not in principle imported for VAT purposes. Removal from customs supervision in a free zone does not trigger import VAT unless the goods entered the economic network of the European Union. Entry is presumed where the goods leave the zone, but here the national court must verify that they did not. Article 204 cannot be invoked where Article 203 applies, solely to found a VAT charge. Confirms that a customs debt in a free zone does not automatically carry import VAT.

C-154/16 Latvijas Dzelzceļš

Judgment · 18 May 2017 · Latvia

Import VAT on goods destroyed under external transit

Article 203(1) does not apply where destruction or irretrievable loss is proven to a satisfactory standard. Such goods cannot enter the EU economic network. Article 204(1)(a) applies instead, so a customs debt arises in principle for the part not produced intact, unless the national court finds force majeure or unforeseeable circumstances under Article 206(1). Import VAT, however, is not due on the destroyed or irretrievably lost part, because those goods cannot be integrated into the EU economy and so are not imported. The principal remains liable. Customs need not pursue the carrier. Confirms a clean split between customs duty and import VAT on transit shortfalls.

C-250/14 Air France-KLMand Hop!Brit-Air

Judgment · 23 December 2015 · France

VAT on unused air tickets and no-show revenue

The Court held that the retained price is remuneration, not indemnity. The consideration is the passenger's right to performance of the transport obligations, which the airline supplies by putting the passenger in a position to claim it, whether or not the flight is taken. Because the service is clearly identified when the ticket is bought, VAT is chargeable on receipt of payment, including where a third party collects in its own name but on the airline's behalf. The franchise lump sum is taxable consideration for the unused tickets, no harm having been suffered. Airlines and other transport operators selling non-refundable or expiring tickets cannot treat no-show revenue as outside scope compensation.

C-463/14 Asparuhovo Lake Investment Company

Judgment · 3 September 2015 · Bulgaria

Retainer contracts as a supply of services and when tax becomes chargeable

Article 24(1) covers subscription contracts for consulting services, including legal, commercial and financial advice, where the supplier agrees to be available for the contract term. Availability itself is the service, so no link to identified advice at a specific time need be shown. The exclusivity commitment is merely a clause of that contract, so Article 25(b) need not be considered. The chargeable event and chargeability arise on expiry of each payment period, whether or not advice was actually given. Legitimacy of the contract remains for the national court. Confirms Kennemer Golf and Le Rayon d'Or for professional retainers. Relevant to law firms, accountants, IT security and consultancy providers billing on retainer, and to their corporate clients, particularly in intra-group arrangements.

C-283/12 Serebryannay vek

Judgment · 26 September 2013 · Bulgaria

Rent-free use of property in exchange for fitting-out works

The fitting-out and furnishing services are supplied for consideration. There is a direct link between them and the right, obtained under the contract, to have the apartment at the supplier's disposal for its business during the contractual term. That the owner benefits only when the contract expires is irrelevant, since the parties assumed reciprocal obligations on conclusion of the bilateral contract. The remaining questions on Articles 26, 62 and 63 therefore did not need to be answered. Confirms that rent-free occupation granted in return for tenant works is a barter of two taxable supplies, not a gratuitous supply. Relevant to property developers, hoteliers and operators taking shells on fit-out-for-rent-free terms, and to related-party arrangements between owner-managers and their companies.

C-273/12 Harry Winston

Judgment · 11 July 2013 · France

Theft of goods from a customs warehouse, customs debt and import VAT

Theft of warehoused goods is an unlawful removal from customs supervision under Article 203(1) of the Customs Code and gives rise to a customs debt. Article 206 applies only where a debt would arise under Articles 202 or 204(1)(a), so force majeure is irrelevant here. Because customs duties become chargeable, the second subparagraph of Article 71(1) of the VAT Directive applies and import VAT becomes chargeable at the same moment. British American Tobacco concerned supplies, not importation, and does not transpose. Operators of customs warehouses and their customers cannot rely on force majeure, or on the theft case law on supplies, to escape import VAT when goods disappear from a suspensive regime. Relevant to high value goods sectors (jewellery, tobacco, electronics), warehousekeepers, logistics providers and their insurers.

C-169/12 TNT Express Worldwide (Poland)

Judgment · 16 May 2013 · Poland

Chargeability on transport services cannot be fixed at 30 days after supply

The Court holds that Article 66 does preclude such legislation. The derogations it allows are exhaustive. A Member State may fix chargeability no later than the issue of the invoice, no later than receipt of the payment, or, where no invoice is issued or it is issued late, within a specified period from the chargeable event. A rule combining receipt of payment with a fixed 30 day backstop does not fit any of them. The judgment matters because Article 66 is often treated as a general licence to bring chargeability forward.

C-153/12 Sani treyd

Order · 21 March 2013 · Bulgaria

Building rights granted in exchange for construction make the tax chargeable at once

The Court holds that tax may become chargeable when the right is granted, provided all the relevant elements of the future supply are already known, so the services are precisely identified and the value of the right can be expressed in money. It is irrelevant that granting the right is an exempt transaction made by non taxable persons. Articles 73 and 80 do preclude a national rule imposing open market value in every barter, outside transactions between connected parties. A reasoned order under Article 99 of the Rules of Procedure that follows Orfey Balgaria closely.

C-19/12 Efir

Judgment · 7 March 2013 · Bulgaria

Value added tax · Directive 2006/112/EC · Articles 62, 63, 65, 73 and 80 · Establishment by natural persons of a building right in favour of a company in exchange for construction services by that company for those persons · Barter contract · VAT on construction services · Chargeable event · When chargeable · Whether…

C-642/11 Stroy trans

Judgment · 31 January 2013 · Bulgaria

Asymmetry between invoice issuer's liability and recipient's deduction

VAT entered on an invoice is payable by the issuer regardless of whether a taxable transaction exists, and no acknowledgement of a real transaction can be inferred from the mere absence of correction in a notice addressed to the issuer. Refusal of deduction to the recipient is not precluded by neutrality, proportionality or legitimate expectations. But where non-performance rests on fraud or irregularities of the issuer or upstream, it must be shown on objective factors that the recipient knew or should have known of the connection with fraud. Confirms that a supplier's unadjusted VAT assessment is only one evidential factor, not proof of supply, so recipients cannot rely on the tax treatment of their supplier to secure deduction. Relevant to fuel, commodity and other chain trading where authorities allege missing supplies from documentary gaps upstream.

C-643/11 LVK

Judgment · 31 January 2013 · Bulgaria

Asymmetric treatment of issuer and recipient of an invoice where no supply took place

VAT entered on an invoice is payable under Article 203 regardless of whether a taxable transaction exists, and no inference of acceptance arises from the authorities leaving the issuer's declaration unadjusted. Issuer and recipient are not in comparable situations. Deduction may therefore be refused for want of an actual transaction. But where the finding of no supply rests on fraud or irregularities by the issuer or upstream, the authorities must establish on objective factors that the recipient knew or should have known of the fraud, without demanding checks that are not his responsibility. Customers cannot defend a deduction simply by pointing to the supplier having declared and been assessed on the same VAT. Relevant to agricultural, commodity and other chain-supply trades facing missing-trader challenges.

C-543/11 Woningstichting Maasdriel

Judgment · 17 January 2013 · Netherlands

When demolished land becomes building land

The exemption does not apply where an overall assessment of the circumstances prevailing at the time of supply, including the parties' intention if supported by objective evidence, shows the land was in fact intended to be built on. Completed demolition by the vendor, or its undertaking to demolish with a view to future construction, is part of that objective evidence. The national definition of building land must cover all unbuilt land intended to support a building. Application is for the national court. Member State definitions of building land cannot be narrowed by formal criteria such as a requirement for post-demolition groundworks or a granted permit.

C-549/11 Orfey

Judgment · 19 December 2012 · Bulgaria

Payments on account in kind and the taxable amount in barter construction deals

Article 65 covers payments on account in kind, including where they represent the entire consideration, so VAT on the construction services became chargeable when the building right was granted, provided all relevant information about the future supply was already known, the services were precisely identified, and the right's value could be expressed in money. A possible future extinction of the right is only a cancellation condition. Absent Article 80 ties between the parties, open market value cannot replace the subjective consideration. Articles 63, 65 and 73 have direct effect. Relevant to property developers and their advisers using land-for-build or building-right barter structures.

C-520/10 Lebara

Judgment · 3 May 2012 · United Kingdom

Single supply on sale of prepaid phonecards to distributors

The Court held there is a single supply of telecommunications services for consideration, made to the distributor, since the operator receives only one actual payment and the reciprocal legal relationship exists with the distributor, not the end user. No second taxable supply arises when the end user makes calls. This turns on the distributor reselling in its own name and on its own behalf, at a price the operator does not control or know, with no refund right for unused credit. Relevant to telecoms operators, prepaid card issuers and their distributors selling through independent resellers.

C-500/10 Belvedere Costruzioni

Judgment · 29 March 2012 · Italy

Automatic conclusion of long-running tax appeals

The provisions do not preclude such a measure. The obligation to collect VAT effectively cannot override the reasonable time requirement in Article 47 of the Charter and Article 6(1) ECHR. Unlike the amnesty measures condemned in Commission v Italy, this was not a general and indiscriminate waiver of verification shortly after payment deadlines, but an exceptional rule closing the oldest cases (in practice over 14 years old) after two adverse judgments, so it did not breach fiscal neutrality. Confirms that Member States may legislate to close ancient tax litigation without infringing their VAT collection duties, provided the measure is exceptional, defined by objective age and procedural criteria, and not a substitute for audit.

C-230/08 Dansk Transport og Logistik

Judgment · 29 April 2010

Smuggled goods seized and destroyed, and where the import VAT falls due

The Court held that for goods seized by the authorities after their irregular introduction, that is from the moment they left the area in which the first customs office inside the territory is situated, and simultaneously or subsequently destroyed by those authorities without ever ceasing to be in their possession, the chargeable event for VAT occurs and the tax becomes chargeable, even if the goods are subsequently placed under a customs procedure. It further held that Articles 202, 215(1) and (3) and 217 of the Customs Code and Articles 7(2) and 10(3) of the Sixth Directive mean that the authorities of the Member State situated at the external frontier through which the goods were irregularly introduced are competent to recover the customs debt and the VAT, even where the goods were afterwards carried to another Member State and there discovered and seized. Excise duty, by contrast, is recoverable by the authorities of that latter Member State provided the goods are held there for commercial purposes, which is for the referring court to determine. The judgment separates three charges that arise on the same physical movement and does not align them.