In MEO – Serviços de Comunicações e Multimédia SA v Autoridade Tributária e Aduaneira (Case C-295/17) (7 June 2018) the advocate general considered that monthly payments made by customers after the termination of a telecoms contract are subject to VAT.
MEO a Portuguese telecoms company supplies telephone and broadband lines. It ties in its customers for minimum contract periods. If a customer terminates a contract early MEO stops providing its services but still expects to receive monthly payments until the contractual end. The issue was therefore whether these payments made after MEO has stopped making supplies are still consideration for supplies within the scope of VAT or whether they are financial compensation for early termination and therefore outside the scope of VAT.
The AG observed that a payment will only trigger a liability to VAT if it is consideration for a...
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In MEO – Serviços de Comunicações e Multimédia SA v Autoridade Tributária e Aduaneira (Case C-295/17) (7 June 2018) the advocate general considered that monthly payments made by customers after the termination of a telecoms contract are subject to VAT.
MEO a Portuguese telecoms company supplies telephone and broadband lines. It ties in its customers for minimum contract periods. If a customer terminates a contract early MEO stops providing its services but still expects to receive monthly payments until the contractual end. The issue was therefore whether these payments made after MEO has stopped making supplies are still consideration for supplies within the scope of VAT or whether they are financial compensation for early termination and therefore outside the scope of VAT.
The AG observed that a payment will only trigger a liability to VAT if it is consideration for a...
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