Advocate General

The Advocate General has opined in Fenix International Limited C-695/20 that Article 9a of the Implementing Regulation 282/2011, which specifies how article 28 Principal VAT Directive (PVD) is to apply in the context of electronically supplies services supplied through an interface or portal, is valid.

Article 28 PVD says that where services are supplied by an agent acting in its own name (an undisclosed agent), the services are treated as supplied both to the agent and by the agent. Very broadly, article 9a creates a presumption that electronically supplied services supplied through an online platform fall within the rule created by article 28 (unless the underlying provider is explicitly indicated as the supplier) so that the platform provider has to account for VAT on the full amount paid by platform users, not just on the provider’s commission.

DLA Piper comment: As always, it needs to be borne in mind that the AG’s opinion does not bind the CJEU. The awaited judgment in this case will have far reaching consequences since online services made through different kinds of platforms are becoming increasingly common. Furthermore, in the case at hand, the significance of the case also stems from the sheer number of transactions and related amount of VAT at stake potentially affected - estimated by the AG to be around GBP2.7bn just in the UK. Finally, the CJEU declaring the provision at hand invalid would also lead to grave financial implications for the Member States of the European Union. Taking this into account the AG took the very unusual step of recommending that if the Court were to find that article 9a is invalid, it should restrict the application of its decision to future situations only.