- Case Overview and Legal Interpretation: The European Court of Justice advocate general’s opinion in Case C-101/24 clarifies that under Article 28 of the VAT Directive, digital platforms (like app stores) are deemed the suppliers of services to consumers, even if the developer’s name is visible, thus shifting VAT liability from developers to the platforms.
- Place of Supply Rules: The opinion further addresses how VAT applies to split transactions; the first leg (developer to platform) is treated as B2B with VAT due in Ireland, while the second leg (platform to consumer) also falls under Irish VAT until 2015, after which it shifted to the customer’s location, but liability remains with the intermediary.
- Implications for Digital Platforms: This interpretation emphasizes the responsibility of digital platforms as VAT collectors, providing legal certainty for past transactions and aligning VAT obligations with the economic reality of digital service provision, thereby reinforcing the principle that VAT is due where the final consumer is located.
Source International Tax Review
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- Advocate General Szpunar delivered an opinion on VAT treatment for electronic services via marketplaces before 2015.
- The case involves a German app developer using an Irish-operated platform for mobile app distribution.
- The AG interprets Article 28 of the VAT Directive, suggesting platforms can be deemed suppliers.
- App stores control pricing, transactions, billing, and contracts, acting as intermediaries.
- The AG’s interpretation applies even before 2015, supporting consistent VAT treatment.
- Article 9a of Implementing Regulation 282/2011 clarifies but does not change Article 28.
- The place of supply for platform services is determined by the supplier’s establishment, following Article 44.
Source: marosavat.com
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