EU Advocate General: No-Cure-No-Pay Service Subject to VAT, Regardless of Payment Uncertainty

Advocate General Kokott concluded that T.P.T.’s no-cure-no-pay legal service is subject to VAT, regardless of the uncertainty surrounding the fee. This opinion came in response to a case where T.P.T. provided free legal services to an economically weak individual against Financial Bulgaria, and the court ordered Financial Bulgaria to pay T.P.T.’s fee. T.P.T. then sought VAT on this fee, which Financial Bulgaria contested, arguing no VAT was due on free services. Ultimately, Kokott concluded that the service is VAT taxable, and Financial Bulgaria is obligated to pay the VAT to T.P.T.

Source: taxlive.nl

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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