ECJ Case C‑214/18 (PSM ‘K’) – Judgment – Considering fees to be inclusive of VAT — Principles of neutrality and proportionality

On 10 April 2019 the European Court of Justice gave its judgment in Case C‑214/18 (PSM ‘K’). The case deals with the question if legal fees charged by an enforcement officer already included VAT, or that VAT should be added.

Facts (simplified):

PSM ‘K’, a creditor of H. W., instructed Ms Treder, a court enforcement officer at the Sąd Rejonowy w Sopocie (District Court, Sopot, Poland), to carry out an enforcement procedure against a debtor. Ms Treder charged a fee to PSM ‘K’, increasing the fees by VAT.

PSM ‘K’ did not agree with the VAT being charged, as it believed that the fee charged by the court enforcement officer already included VAT.

Parties went to court and the Polish Supreme Court held that the court enforcement officer could not increase the formal fees, that were based on Article 49(1) of the Law on court enforcement officers, by the amount of VAT. According to the Supreme Court, the absence of any mention in the Law on court enforcement officers of the possibility of adding VAT to those fees means that the fees must be regarded as gross liabilities already inclusive of VAT.

The case resulted in the Regional Court asking the following preliminary questions to the ECJ:

  1. ‘Is it allowed, based on the VAT Directive and the principle of VAT neutrality, to adopt the position that the enforcement fees charged by court enforcement officers already include the tax on goods and services (i.e. VAT)?If yes:
  2. In the light of the principle of proportionality, is it permissible to adopt the position that a court enforcement officer — as a VAT taxable person in connection with his enforcement activities — does actually possess all the legal instruments in order to perform the tax obligation correctly, assuming that the enforcement fee charged on the basis of the provisions of the [Law on court enforcement officers] includes the amount of the tax on goods and services (i.e. VAT)?’


The European Court of Justice rules as follows:

The provisions of the VAT Directive  and the principles of neutrality of value added tax (VAT) and proportionality must be interpreted as not precluding an administrative practice of the competent national authorities, such as that at issue in the main proceedings, under which the VAT relating to supplies of services by a court enforcement officer in an enforcement procedure is regarded as included in the fees charged by that officer.

In other words: it was allowed to add VAT to the the fees charged by the enforcement officer.