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ECJ C-593/19 (SK Telecom vs AT) – refund of VAT on roaming charges, use and enjoyment rules for telecom services

minbuza.nl published some more information about the questions raised in this case.  Please find below an unofficial translation/summary:

  • SK Telecom is a mobile telephony provider based in South Korea that provides roaming services for the use of a domestic mobile network. In order to offer SK Telecom customers the opportunity to use their mobile phones during their stay in Austria, an Austrian provider has made its network available to SK Telecom against payment of usage fees plus Austrian VAT (20%).
  • SK Telecom has charged its customers established in the third country with roaming fees for the use of the Austrian network. The dispute concerns the refund of VAT.
  • SK Telecom applied to the Austrian tax authorities for a refund of the VAT charged by the Austrian provider. The tax authorities have refused the refund because the roaming charges are taxable transactions in Austria.
  • The objection made by SK Telecom against this was rejected by the tax authorities and the case was subsequently referred to the Bundesfinanzgericht.
  • According to the Bundesfinanzgericht, SK Telecom did not carry out taxable transactions, since the place of supply is in the third country.
  • The tax authorities then appealed to the Verwaltungsgerichtshof, which annulled the decision of the Bundesfinanzgericht, with the result that the latter court must now again rule on the objection.
  • SK Telecom argues that its roaming income in South Korea is subject to a 10% charge similar to Austrian VAT.

Recital:

This concerns the question of where the roaming services have been provided for the purposes of VAT. According to the VAT Directive, the services are in principle taxed at the place of the recipient of the service, in this case South Korea. The question arises as to whether the exception provided for in Article 59a (b) of the VAT Directive is applicable and, as a result, the place of the service can be identified within the Union. This depends on two conditions: (i) the actual use and exploitation must take place within the Union, and (ii) a specific objective must be pursued, in particular the prevention of non-taxation. However, it is unclear what is meant by “actual use and actual exploitation” and when there is a “comparable charge”.

Questions:

1) Is Article 59a (b) of Directive 2006/112 / EC, as amended by Article 2 of Directive 2008/8 / EC, to be interpreted as meaning that the purchase of roaming services in a Member State in the form of access to the domestic mobile telephony network for establishing inbound and outbound connections by a ‘non-taxable end customer’ who is temporarily staying in the territory of this Member State should be considered as ‘actual use and operation’ in the territory of that Member State , so that the transfer of the place of service from the third country to that Member State is justified, although neither the mobile telephony service provider nor the final customer is established within the territory of the Community, nor is the final customer’s place of residence or usual place of residence within the territory of the Community?

2) Is Article 59a (b) of Directive 2006/112 / EC, as amended by Article 2 of Directive 2008/8 / EC, to be interpreted as meaning that the place of telecommunications services as described in the first question, which according to Article 59 of Directive 2006/112 / EC, as amended by Article 2 of Directive 2008/8 / EC, is located outside the Community and can be moved to the territory of a Member State, although neither the mobile telephony service provider nor the final customer in the territory of the Community is established and the place of residence or usual place of residence of the final customer is not also within the territory of the Community simply on the grounds that the telecommunications services in the third country are not subject to a charge comparable to VAT under EU law?

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