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ECJ C-501/19 (UCMR – ADA) – Questions – Collective management of copyright on musical works

Unofficial translation/summary:

  • The applicant is an association for the collective management of copyright on musical works.
  • The defendant is a legal person who is active in the organization of performances whereby musical works are communicated to the public.
  • The defendant has organized a concert for which it has received a non-exclusive license for the use of musical works.
  • For this, the defendant was obliged to pay the applicant compensation for an amount calculated in the license.
  • Since the defendant had paid only part of those allowances, the applicant brought a legal claim.
  • Both the bottom court and the court of second instance upheld the applicant’s claim.
  • Unlike the court of first instance, the appeal court found that the collection of the fees by the applicant does not constitute a taxable transaction and that the fees payable are not subject to VAT.
  • That is why the appeal court reduced the amount to which the defendant at first instance was ordered reduced by the amount in VAT.
  • Both the applicant and the defendant appealed in cassation against the judgment of the appeal court before the referring court.
  • The applicant argues that VAT is now the responsibility of the authors and not the end users (which would be contrary to fiscal neutrality).
  • The defendant contests the amount of the compensation because the type of performance is allegedly incorrectly qualified.

Recital:

The question arises as to whether there is a legal relationship in which reciprocal services are provided between the rightholders and a particular user, and whether the amounts of money that the rightholders ultimately receive from the collective management organization constitute the actual consideration for a particular service. If it is assumed that there is a legal relationship, it must be determined whether, in the present case, it may concern the transfer of an immaterial matter under which “the transfer and the granting of copyright” fall within the definition of “service”. The referring court also asks the Court to clarify whether a collective management organization collects fees from the organizers of a performance for the right to communicate to the public musical works, acts as a taxable person within the meaning of Article 28 of the VAT Directive. The question is relevant in the present case since it is necessary to determine whether the defendant is also liable to pay VAT on the amounts which it is required to pay according to the judgment at first instance.

Preliminary rulings:

1. Do copyright holders of musical works perform a service within the meaning of Article 24 (1) and Article 25 (a) of Council Directive 2006/112 / EC of 28 November 2006 on the common system of taxation on the added value (VAT Directive) vis-à-vis the organizers of a performance whose collective management organizations collect fees on the basis of an authorization given in the form of an exclusive license, in their own name but on behalf of those entitled to it for the communication to the public of the musical works?

2. If the first question is answered in the affirmative, do the collection agencies, when collecting fees from the organizers of a performance for the right to communicate the musical works to the public, act as a taxable person within the meaning of Article 28 of the VAT Directive and they must then issue VAT invoices to the respective organizers of the performance and, when fees are paid to the copyright holders of musical works, those entitled parties must in turn issue VAT invoices to the organization for the collective management of copyright?

Source: minbuza.nl

Source: Curia

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