Taxation of Server Colocation Services: Ruling on VAT Settlement at Customer’s Registered Office

• Services of storing servers in a data center do not constitute real estate services
• VAT taxation for server colocation services should be settled at the customer’s registered office or permanent place of business
• The judgment was issued as a result of a dispute between the tax authority and a Finnish company
• The company argued that VAT on these services should not be settled in Finland unless the customer’s registered office or permanent place of business is in Finland
• The tax office argued that the server cabinets provided by the company could be treated as real estate
• The CJEU ruled in favor of the company, stating that the services do not qualify as rental of real estate
• Customers using storage services in a data center do not have exclusive rights to the property where the server racks are installed
• Server racks cannot be considered real property according to EU Regulation No. 282/2011

Source: polishtax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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