- The Xyrality case (C-459/24) redefines VAT liability for e-commerce platforms by clarifying that Article 28 of the VAT Directive can create “deemed supply chains” where the platform, not the underlying service provider, is considered the supplier for VAT purposes, even if civil law says otherwise.
- The ruling emphasizes that the “look and feel” of the customer experience, including factors like payment processing, setting terms, and dominant branding, are crucial in determining if a platform acts “in its own name,” making it liable for VAT on the full transaction amount, not just its commission.
- This decision, rooted in Article 28 rather than the narrower Article 9a, has broad implications beyond electronically supplied services, requiring all service-oriented platforms to re-evaluate their VAT responsibilities based on their operational reality and customer interaction.
Source VATvocate.com
VAT Rules for App Stores: Platforms Deemed Suppliers in Digital Sales
- The ECJ ruled that digital platforms (like app stores) are deemed the suppliers of digital services to end customers for VAT purposes.
- Developers are considered to supply their services to the platform, not directly to end users.
- The place of supply for the developer’s service is where the platform is established.
- The platform is responsible for charging and remitting VAT to final customers; developers apply the reverse charge for their supply to the platform.
- The judgment clarifies VAT obligations for digital marketplaces, ensuring consistent treatment across the EU.
Source: globalvatcompliance.com
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See also
Click HERE to Visit the YouTube Channel of Global VAT Compliance
- Join the Linkedin Group on ECJ/CJEU/General Court VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
- Podcasts & briefing documents: VAT concepts explained through ECJ/CJEU cases on Spotify
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