Fenix case: VAT liability of online platforms for underlying services

Fenix case: VAT liability of online platforms for underlying services

Although the question at issue was of a purely technical nature, i.e. the compliance of article 9a of Council Implementing Regulation No 282/2011 ("Implementing Regulation") with the EU law, the importance of this case lies in the fact that the ECJ has been granted the opportunity for the first time to remove any ambiguity as to the extent of the VAT liability of online platforms that facilitate electronically supplied services ("ESS").

For illustration purposes, article 28 of the Council Directive 2006/112/EC ("VAT Directive") stipulates that a taxable person who, in the context of a supply of services, acts as an intermediary in his own name but on behalf of another person, is presumed to be the supplier of those services.

Furthermore, article 9a of the Implementing Regulation, which seeks to implement article 28 of the VAT Directive, provides that where ESS are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications, these online platforms shall in principle be presumed to be acting in their own name but on behalf of the provider of those services. Therefore, in practice these online platforms are liable to account for VAT on the full amount charged to the customers rather than solely on the 

commission charged by them to the principal service provider.

Nevertheless, the same article also sets out certain situations where this presumption is not applicable, i.e. when the principal service provider is explicitly indicated as the supplier by these platforms and this is reflected in the contractual arrangements.

Under all circumstances, this presumption becomes irrebuttable where the online platforms authorize the charge to the customers or the delivery of those services or set the general terms and conditions of that supply.