In Staatssecretaris van FinanciënvL W Geelen(Case C-568/17) (8 May 2019), the CJEU found that entertainment services provided online, via webcams, took place where the provider carried on his business.
Mr Geelen ran a business in the Netherlands. It consisted of offering interactive erotic webcam sessions to clients located in the Netherlands. The models were based in the Philippines. The issue was the place of supply of the services for the purpose of the Principal VAT Directive art 52, given that the provider and recipient of the services did not physically meet.
The CJEU observed that the purpose of art 52 (previously the Sixth VAT Directive art 9) is to ensure that the provision of entertainment should be taxed in the country where the services physically take place. The CJEU noted, in this respect, that the provision of entertainment did not necessarily entail a degree of artistic interest; and the fact that the services were not provided in a single location, but online in multiple locations, did not prevent them from constituting entertainment.
The CJEU then had to decide where the services took place. It noted that the models were located in the Philippines but that Mr Geelen ran the business in the Netherlands. The services were therefore supplied there. This was consistent with the purpose of art 52 and ensured, in the present case, that VAT was payable in the country where the end users were located.
Why it matters: The CJEU has confirmed that services supplied online with the use of webcams take place where the provider has established its business or has a fixed establishment. This case may be relevant to a wide range of situations where services are provided online via webcams. Since 2011 (as a result of Directive 2008/8/EC), the place of supply of services is ‘where the services actually take place’. This decision should therefore continue to be relevant.
Also reported this week:
D Shanks v HMRC Partnership losses and the partners’ notional trades
In Staatssecretaris van FinanciënvL W Geelen(Case C-568/17) (8 May 2019), the CJEU found that entertainment services provided online, via webcams, took place where the provider carried on his business.
Mr Geelen ran a business in the Netherlands. It consisted of offering interactive erotic webcam sessions to clients located in the Netherlands. The models were based in the Philippines. The issue was the place of supply of the services for the purpose of the Principal VAT Directive art 52, given that the provider and recipient of the services did not physically meet.
The CJEU observed that the purpose of art 52 (previously the Sixth VAT Directive art 9) is to ensure that the provision of entertainment should be taxed in the country where the services physically take place. The CJEU noted, in this respect, that the provision of entertainment did not necessarily entail a degree of artistic interest; and the fact that the services were not provided in a single location, but online in multiple locations, did not prevent them from constituting entertainment.
The CJEU then had to decide where the services took place. It noted that the models were located in the Philippines but that Mr Geelen ran the business in the Netherlands. The services were therefore supplied there. This was consistent with the purpose of art 52 and ensured, in the present case, that VAT was payable in the country where the end users were located.
Why it matters: The CJEU has confirmed that services supplied online with the use of webcams take place where the provider has established its business or has a fixed establishment. This case may be relevant to a wide range of situations where services are provided online via webcams. Since 2011 (as a result of Directive 2008/8/EC), the place of supply of services is ‘where the services actually take place’. This decision should therefore continue to be relevant.
Also reported this week:
D Shanks v HMRC Partnership losses and the partners’ notional trades
