EU VAT Treatment of

the Platform/Sharing
Economy
TEI Indirect Tax Committee Call, 9 June 2020
Bart Caluwé
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Overview of key VAT issues at stake
1. VAT status of providers active on electronic interfaces: Taxable person?

2. VAT treatment of transactions between electronic interfaces and the

providers and/or users: Electronically Supplied Services (ESS) vs.
intermediation?

3. The role of electronic interfaces in the collection of VAT: Fully or jointly

liable, withholding agent, reporter or educator?

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VAT status of providers: Taxable person?
► Are transactions of an individual, micro-entrepreneur or small
business in scope of VAT or not?

► If transactions are in scope of VAT, should the provider charge VAT?

▸VAT exempt transactions (e.g. renting of immovable property)
▸Place of supply is outside the EU (e.g. accommodation)
▸Exemption scheme for small enterprises (i.e. local thresholds increasing)

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VAT treatment of transactions
► Consideration (in case of peer-to-peer transactions)

► Electronically supplied services (art. 58) vs. intermediation (art. 46/47)

▸Link with EU regulation on ‘Information Society Services’ and Digital Services Act
▸CJEU: ISS means: platform = merely connecting, no decisive influencing (e.g. provider’s pricing)
▸Concept of minimum level of human intervention evolving?
▸Push for place of taxation where underlying consumption B2C (or even B2B)?
▸Relevancy of VAT status of providers/users for place of supply rules (B2B vs. B2C)
▸Risk of double taxation acknowledged by EU VAT Forum
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VAT treatment of transactions
Information Society Service
Article 1(1)(b) of Directive 2015/1535 laying down a procedure for the provision of
information in the field of technical standards and regulations and of rules on
Information Society services states:
“service” means any Information Society service, that is to say, any service normally
provided for remuneration, at a distance, by electronic means and at the individual
request of a recipient of services.
For the purposes of this definition:
• “at a distance” means that the service is provided without the parties being
simultaneously present;
• “by electronic means” means that the service is sent initially and received at its
destination by means of electronic equipment for the processing (including digital
compression) and storage of data, and entirely transmitted, conveyed and
received by wire, by radio, by optical means or by other electromagnetic means;
• “at the individual request of a recipient of services” means that the service is
provided through the transmission of data on individual request.
An indicative list of services not covered by this definition is set out in Annex I.
EU VAT Treatment of the Platform/Sharing Economy
Electronically Supplied Service
Article 7 of Council Implementing VAT Regulation (EU) No 282/2011 states:
‘Electronically supplied services’ as referred to in VAT Directive 2006/112/EC shall
include services which are delivered over the Internet or an electronic network and
the nature of which renders their supply essentially automated and involving
minimal human intervention, and impossible to ensure in the absence of
information technology.
Paragraph 1 shall cover, in particular, the following:
• (b) services providing or supporting a business or personal presence on an
electronic network such as a website or a webpage;
• (c) services automatically generated from a computer via the Internet or an
electronic network, in response to specific data input by the recipient;
• (f) the services listed in Annex I:
- Website supply, web-hosting, distance maintenance of programs and equipment:
(a) Website hosting and webpage hosting
- Supply of images, text and information and making available of databases: (h) the
provision of advertising space including banner ads on a website/web page; (i) use
of search engines and Internet directories.
An indicative list of services not covered by this definition is set out as well in
Annex I.
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Overview of VAT options for improvement
1. New definition of taxable person (art. 2(1)(a) and 9(1) EU VAT Directive)
▸No consensus approach at EU level; sufficiently tailored definitions?
2. Rebuttable presumption with provider becoming taxable person upon
exceeding a set threshold (number of transactions or turnover)
▸Complementary to existing rules; what if provider active on more platforms?
3. New place-of-supply rules whereby services from platform to provider
are B2B, dependent on VAT ID communication of provider to platform
▸No clarity on nature of services rendered by platform in case B2C and by provider
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Overview of VAT options for improvement
4. All services by platform to users are ESS (new art. 7(2) EU VAT Regulation)
▸No clarity on nature of services to provider and VAT status of provider
5. Uniform rule for the services of the platform: VAT due in country where
recipient is based; VAT liability of parties based on VAT ID or not
▸No risk of divergent application of place-of-supply rules and identical B2B and B2C;
only person liable for VAT different; no changes to notion of taxable person as such
▸Easier compliance for platforms, but need to define platforms in scope
▸No clarity on taxable status of provider towards user

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VAT collection by electronic interfaces
► OECD – Working Party 9 on VAT/GST looking at options:
i. Full liability of platforms for VAT/GST on activities facilitated
ii. Joint and several liability of platform for VAT/GST on provider’s platform activities
iii. Collecting/withholding VAT/GST obligation of platform without being liable
iv. Reporting obligations of platforms relevant for VAT/GST purposes (+ CIT - WP10)
v. Educating/informing by platforms of providers/users on their tax obligations

► EU – Taxation and Digital Services Regulation:

▸DAC7: Exchange of information and uniform EU reporting obligations of platforms
▸VAT: Art. 242a EU VAT Directive and art. 54b-c new EU VAT Regulation (as of 2021)
▸Platform reporting (and joint liability) in France, Austria, Spain, Greece (& Norway)
▸Digital Services Act (EU); Digital Services Tax (OECD, EU, countries)
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Q&A - Further sources and links
► EU VAT Expert Group: Working Papers No 081, 083, 090
► EU VAT Committee: Working Papers No 906, 914, 947 and 990 (new)

https://circabc.europa.eu/ui/group/cb1eaff7-eedd-413d-ab88-94f761f9773b/library/0b7a8602-271f-4696-ad10-
19796b697597/details
► EU VAT cross-border rulings: 2016/19, 2018/20

https://ec.europa.eu/taxation_customs/sites/taxation/files/cross-border-rulings.pdf
► EU VAT Regulation (as of Jan or July 2021 - tbc):
https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32019R2026&from=EN#d1e488-14-1
► Latest relevant CJEU judgment re Information Society Services:
http://curia.europa.eu/juris/document/document.jsf?text=&docid=221791&pageIndex=0&doclang=EN&mode=lst&di
r=&occ=first&part=1&cid=7193645
► OECD: The Role of Digital Platforms in the Collection of VAT/GST on Online Sales:
http://www.oecd.org/tax/consumption/the-role-of-digital-platforms-in-the-collection-of-vat-gst-on-online-sales.pdf
► Book / Ph.D re European VAT and the Sharing Economy:
https://lrus.wolterskluwer.com/store/product/european-vat-and-the-sharing-economy/
EU VAT Treatment of the Platform/Sharing Economy 6/15/2020