General Court T-643/24 (Credidam) – AG Opinion – Unauthorized use of copyrighted works incurs VAT on fees

On December 3, 2025, the General Court released the AG Opinion in the case T-643/24 (Credidam).

Context: Reference for a preliminary ruling – Taxation – Value added tax (VAT) – Article 2(1)(c), Article 24(1) and Article 25 of Directive 2006/112/EC – Concept of ‘supply of services for consideration’ – Collective management of copyright – Fee for the communication to the public of protected musical works – Surcharge applied in the absence of a licence – Article 73 of Directive 2006/112 – Taxable amount – Concept of ‘consideration’

Summary

Facts of the Case: The case involves Centrul Român pentru Administrarea Drepturilor Artiștilor Interpreți (CREDIDAM) and Cristian General Serv SRL regarding VAT implications for broadcasting protected musical works without a license. The Romanian company was required to pay a fee that triples in the absence of a license, prompting questions about the VAT treatment of this fee.
Questions to the Court: The Court of Appeal in Bucharest asked whether the unauthorized communication of protected works constitutes a “supply of services for consideration” under VAT law. Additionally, it sought clarification on whether the surcharge for unauthorized use should be included in the taxable amount for VAT.
Decision on Supply of Services: The Advocate General concluded that the obligation to tolerate the unauthorized communication of protected works, for which a fee is charged, qualifies as a “supply of services for consideration” under Directive 2006/112/EC. This determination is based on the established legal relationship between the copyright holders and the users, regardless of the absence of a formal license.
Decision on Consideration and Taxable Amount: The Advocate General stated that both the basic fee and the surcharge applied due to the lack of a license may be classified as “consideration” for VAT purposes. The interpretation emphasizes that the economic reality of the transaction, including the nature of the surcharge, should be considered in determining VAT liability.
Justification for the Decisions: The opinion reinforces the principle of fiscal neutrality and the importance of assessing transactions based on their objective characteristics. By interpreting the relevant articles of the VAT Directive broadly, the Advocate General aims to ensure that VAT is applied consistently in cases involving copyright fees and surcharges, thereby preventing tax evasion.

Articles in the EU VAT Directive

Article 2
1. The following transactions shall be subject to VAT:
(c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;

Article 24
1. ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.

Article 25
A supply of services may consist, inter alia, in one of the following transactions:
(a) the assignment of intangible property, whether or not the subject of a document establishing title;

Article 28
Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and
supplied those services himself.

Article 73
In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price
of the supply.

Article 79
The taxable amount shall not include the following factors:
(a) price reductions by way of discount for early payment;
(b) price discounts and rebates granted to the customer and obtained by him at the time of the supply;
(c) amounts received by a taxable person from the customer, as repayment of expenditure incurred in the name and on behalf of the customer, and entered in his
books in a suspense account.

Facts & Background

Parties Involved: The case involves the Romanian Centre for the Administration of Performing Artists’ Rights (CREDIDAM), a collective management organization responsible for collecting and distributing remuneration for performing artists’ rights, and Cristian General Serv SRL, a Romanian company that owns a three-star rated tourist guesthouse.
Claim Initiation: CREDIDAM initiated proceedings on November 25, 2022, against Cristian General Serv SRL, seeking compensation for the unauthorized communication of phonograms and artistic performances that occurred in the guesthouse from October 1, 2019, to December 31, 2022. The claim included a demand for three times the remuneration due to performing artists, along with VAT.
Initial Judgment: On April 19, 2023, the Tribunalul București dismissed CREDIDAM’s claim as unfounded. The court found that Cristian General Serv SRL did not conduct any commercial activity during the relevant period, and thus, did not communicate the protected works to the public. The court also noted that a space owned by the defendant had been removed in February 2023.
Appeal Process: CREDIDAM appealed the decision, arguing it had demonstrated that the defendant had indeed communicated to the public. The appeal was registered with the Curtea de Apel București, which raised the issue of whether VAT should apply to the compensation claimed under tortious civil liability.
Referral to CJEU: The Curtea de Apel considered the need for a preliminary ruling from the Court of Justice of the European Union (CJEU) regarding the classification of the compensation as a taxable supply of services under EU VAT law, particularly in light of the defendant’s claims that the amounts were not subject to VAT as per the Romanian Tax Code.

Questions

(1) On a proper construction of Article 2(1)(c), Article 24(1), and Article 25(a) of Directive 2006/112/EC, do holders of related rights carry out a supply of
services for consideration where the user carries out a communication to the public of protected works in the absence of a licence to that effect?
(2) Does the answer to the first question depend on whether, under national law, the holder of such a related right is not able to object to the uses, being entitled
only to the single equitable remuneration, or does it depend on the method of calculation used in determining the amounts due?

AG Opinion

(1) Article 2(1)(c), Article 24(1) and Article 25(b) and (c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

must be interpreted as meaning that the regulatory obligation to tolerate, in return for a fee, the communication of protected works to the public by a user, who has not previously obtained the licence required for that purpose, must be classified as a ‘supply of services for consideration’.

(2) Article 2(1)(c) of Directive 2006/112, read in conjunction with Article 73 of that directive,

must be interpreted as meaning that the remuneration, which is payable for the communication of protected works to the public, which consists of a basic fee and a surcharge applied where a licence has not been obtained prior to that communication, may be classified as ‘consideration’, which it is for the referring court to ascertain, in particular in the light of the legal basis and the purpose of that remuneration.

Source

Curia

Reference to other ECJ Cases

Case C-37/16 (SAWP): This case involved the economic rights of reproduction in the context of private copying. It discussed the absence of a legal relationship for reciprocal performance in certain transactions.
Case C-501/19 (UCMR-ADA): This case addressed the management activities of collective management organizations and clarified VAT obligations concerning remuneration collected on behalf of rights holders.
Case C-179/23 (CREDIDAM): This recent case also involved issues related to the management of copyright and related rights and included discussions on VAT applicability.