VATupdate Newsletter Week 49 2025

PAY-PER-VIEW

Somewhere in a boardroom, many years ago, a very clever person must have said: “What if… we got paid twice?” And instead of being gently escorted out of the building for suggesting something bordering on philosophical chaos, the idea became the cornerstone of the 21st-century internet.

We now live in a world where companies pay platforms to show ads… while users pay the exact same platforms not to show those ads. It’s a brilliant business model if you think about it. Most people try to sell a product once. YouTube sells the absence of that product back to you for €11.99 a month. It’s like buying a book and being charged extra to have all the inserted flyers, coupons, and “exclusive offers” removed first.

And despite all our sophistication as modern digital citizens, we fall for it. Or rather: we make a perfectly rational choice. Some pay with euros; others pay with patience, silence, dignity, and those five eternal seconds before the ‘Skip Ad’ button lights up like a tiny beacon of hope. Either way, the platform wins.

Of course, here at VATupdate we look at this with a professional mix of admiration and envy. We, too, have advertisers on our website. Not many, and certainly none promoting crypto-detox-miracle-supplements. But enough to keep the site free for everyone. And we like it that way: open access, no paywalls, and nobody needs a premium subscription just to figure out whether Article 138(1) applies to a triangular transaction involving a Polish warehouse and an Italian customer who still hasn’t answered their email.

Speaking of triangulation: here are some highlights from last week on www.vatupdate.com:

ECJ Case T-646/24 (MS KLJUCAROVCI): Triangular transactions may still qualify for simplification even when real-world delivery flows deviate from the textbook diagram. A welcome substance-over-form moment, and some practical breathing space for EU traders.
ECJ Case T-363/25 (UNIX): VAT deduction rights cannot be denied solely due to invoice imperfections. As long as substantive conditions are met, deduction stands. A useful reminder that VAT is still a tax on consumption, not on paperwork.

Which brings us back to our pay-to-avoid-paying theme.

In VAT, just as in the digital world, we have a system where some people pay to enjoy something, while others pay to be relieved of something.

Consider the humble exemption. Some sectors don’t (can’t) charge VAT on their services, yet often end up paying more on their costs because they can’t deduct input VAT. Meanwhile, fully taxable businesses actually want (have) to charge VAT because it allows them to recover it.

It’s almost the fiscal version of YouTube Premium:

some businesses pay VAT because they’re required to (the advertisers),
some businesses pay more because they can’t charge VAT (the subscription users),
and the tax authorities — like YouTube — never lose.

You could even stretch the analogy to the VAT in the Digital Age (ViDA) package. In a way, ViDA is like implementing a mandatory “Skip Ad” button for tax fraud. Don’t want businesses dodging compliance? Fine. Introduce real-time reporting. Make platforms intermediaries. Add digital footprints everywhere. Suddenly everyone pays: If not money, then attention, data, time, and the occasional blood pressure spike.

Just like online platforms, the VAT system long ago mastered the art of two-sided monetisation.

Whether we’re talking about ads on YouTube or input VAT on exempt activities, the pattern remains: if people can choose between paying with money or paying with attention, paperwork, compliance, or administrative burden, most will pick the option that annoys them least. And the system (digital or fiscal) makes sure revenue flows either way.

Best to keep things simple. At VATupdate we’ll continue skipping the complicated stuff. Unless, of course, it’s VAT.

That, unfortunately, you can’t really skip.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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