Diritto ed Economia dell'ImpresaISSN 2499-3158
G. Giappichelli Editore

29/05/2020 - Provision of services: the indemnity paid for the early termination of a contract is subject to VAT.

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Articoli Correlati: VAT - indemnity - early termination of contract

On 11 June 2020, in case no. C-43/19, the E.U. Court of Justice who was asked to clarify whether the amounts received by an economic operator in the event of early termination, for reasons specific to the customer, of a contract for the provision of services that provides for compliance with a period of loyalty in exchange for the granting to this customer of advantageous commercial conditions constitutes the remuneration of a provision of services carried out for consideration and therefore subject to VAT. Specifically, the lawsuit concerned Vodafone of Lisbon (Portugal) which has as its corporate object the provision of services in the sector of electronic communications, fixed telephony and WiFi access. The Court has ruled that the amounts received by the economic operator in the event of early termination, of the contract constitute the remuneration of a service rendered for consideration and therefore are subject to VAT.