The ECJ issued the facts and questions in the case C-744/23 (Zlakov).
Article in the EU VAT Directive
Article 24(1) of the EU VAT Directive 2006/112/EC
Article 24
1. ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.
Facts
The applicant is TPT, a sole proprietorship firm, and the defendant is ‘Financial Bulgaria’.
They have concluded a consumer credit agreement. The legal services are provided to the client free of charge, because a Bulgarian legal profession law allows a lawyer to provide legal services free of charge to persons in economic difficulties. The lawyer argues that the judge wrongly awarded him the costs of the lawyer’s fee without value added tax.
Consideration:
The referring court has doubts as to whether VAT is due on a lawyer’s fees where the work was carried out under the conditions of free legal services. He is not sure whether the provision of a legal service free of charge is a ‘supplied service free of charge’ within the meaning of Article 24(1) of the VAT Directive. The referring court also has doubts about who the tax entity (taxable person) is in this case, the applicant or the lawyer.
Questions
1) Must ‘services’ within the meaning of Article 2(1)(c), Article 24(1), Article 26(1)(b) and Article 28 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax be interpreted as including the following transactions:
1. the provision of legal services free of charge (pro bono) by a lawyer of a party in legal proceedings[?]
2. the provision of legal services (pro bono) free of charge by a lawyer of a party who has been successful in the proceedings, whereby the judge awards the lawyer the fee that he would have received if it had been done in the context of a agreement for legal protection and legal assistance had been agreed[?]
2. Must ‘the provision of services free of charge’ within the meaning of Article 26(1)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax be defined as it is explained that it includes the following actions:
1. the provision of legal services free of charge (pro bono) by a lawyer of a party in legal proceedings[?]
2. the provision of legal services (pro bono) free of charge by a lawyer of a party who has been successful in the proceedings, whereby the judge awards the lawyer the fee that he would have received if it had been done in the context of a agreement for legal protection and legal assistance had been agreed[?]
3) Must ‘a supply of services for consideration’ within the meaning of Article 2(1)(c), Article 24(1) and Article 26(1)(b) of Directive 2006/112/EC the Council of 28 November 2006 on the common system of value added tax be interpreted as meaning that it includes the provision of a legal service free of charge (pro bono) by a lawyer for a party who has been successful in the proceedings , whereby the judge awards the lawyer the fee that he would have received if it had been agreed in the context of an agreement for legal protection and legal assistance[?]
4. Must ‘taxable person’ within the meaning of Articles 28 and 75 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax be interpreted as meaning:
1. a lawyer (sole-law firm) who has provided legal services free of charge (pro bono) to a party in a legal procedure [?]
2. a lawyer (one-man law firm) who has provided legal services (pro bono) free of charge to a party who has been successful in the proceedings, whereby the judge awards the lawyer (one-man law firm) the fee that he would have received if had been agreed in the context of an agreement for legal protection and legal assistance[?]
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