ECJ C-695/20 (Fenix International) – Questions – Legality of Art. 9a of the Implementing Regulation


6. The Platform is offered to “Users” from around the world. These Users are divided into “Creators” and “Fans”. Creators have profiles and upload and post content such as photographs and videos to their respective profiles. They can also stream live video webcam and send private messages to Fans who subscribe to them. The Creator determines the monthly subscription fee, although Fenix sets the minimum amount both for subscriptions and for tips.

7. Fans can access uploaded content by making ad hoc payments or paying a monthly subscription in respect of each Creator whose content they wish to view and/or with whom they wish to interact. Fans can also pay tips or donations known as “Fundraising” for which no content is supplied in return.

8. Therefore, Creators charge and earn money from content and Fans pay money for content.

9. Fenix provides not only the Platform but also the facility whereby Fans make payments and Creators receive payment. Fenix is responsible for collecting and distributing the payments, utilising a third-party payment service provider. Fenix charges the Creator 20% for services by way of a deduction (“the Charge”) from the consideration paid by the Fan; if a Creator charges a notional £100 for a subscription, Fenix receives £100 from the Fan, retains £20 and pays the Creator £80.

10. Both payments from a Fan and payments to a Creator will appear on the relevant User’s bank statement as a payment made to or from Fenix.

11. At all material times, Fenix charged and accounted for VAT at a rate of 20% on the Charge.

12. Use of the Platform has at all material times been governed by Fenix’s Terms of Service (“T&Cs”). There are various versions of the T&Cs over the period covered by the assessment. There are also various versions of the Privacy Policy.

13. On 22 April 2020, HMRC sent Fenix assessments for VAT due for the periods from 07/17 to 01/20 in the sum of £8,222,566. On 15 July 2020, HMRC issued a further assessment for VAT due for the period 04/20 in the sum of £3,015,912.

14. HMRC’s view was, and is, that the legal basis for the assessments was that Fenix should be deemed to be acting in its own name by virtue of Article 9a.

15. On 27 July 2020, Fenix filed an appeal disputing the legal basis for the assessment and also the quantum.

16. The argument on the legal basis was that Article 9a is invalid and does not apply; further, or alternatively, Fenix falls outside of and/or rebuts the presumption in Article 9a. HMRC have not made any decision as to, as a matter of English law, the capacity in which Fenix acted in respect of the Platform (ie whether as agent or as principal). Their decision to assess Fenix to VAT was taken by reference to Article 9a alone. HMRC have not considered the application of Article 28 of the VAT Directive (“Article 28”) per se, without reference to Article 9a (including, specifically, the final paragraph of Article 9a(1)).


Is Article 9a of Council Implementing Regulation (EU) No 282/2011 of 15 March 2011, inserted by Article 1(1)(c) of Council Implementing Regulation (EU) No 1042/2013 of 7 October 2013, invalid on the basis that it goes beyond the implementing power or duty on the Council established by Article 397 of Council Directive 2006/112/EC of 28 November 2006 insofar as it supplements and/or amends Article 28 of Directive 2006/112/EC?”

Source: Curia



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