Cancellations, dissolutions, and terminations of agreements occur regularly, particularly during the COVID-19 pandemic. Some situations may give rise to cancellation and/or dissolution fees. The VAT treatment of such fees is difficult. The question is whether VAT is owed on such fees because it is considered part of the compensation for the performance of services to be rendered, or whether the fee is untaxed compensation.
Source BDO
See also
- ECJ case C-43/19 (Vodafone Portugal) – Judgment – Termination fees subject to VAT
- Compensations, cancellations and non-payments in the ECJ case-law on VAT
Latest Posts in "European Union"
- VAT Applies to Retailer’s Tax-Free Refund Processing Fees: No Exemption, Fee Treated as Gross Price
- CJEU Confirms Triangulation VAT Relief Applies to Four-Party Chains, Even with Direct Customer Delivery
- Is User Data a Form of Payment? EU VAT Committee Explores Taxation of Digital Barter Transactions
- HMRC Reverses VAT Grouping Policy on EU Branches, Allowing UK Businesses to Reclaim Overpaid VAT
- CJEU Broadens VAT Exemption for Negotiation Services in Mortgage Intermediation Cases
