Although not a specific VAT case, this case still raises interesting VAT related questions. The ECJ rules that the services of companies such as Airbnb are to be treated as ‘information society service’.
On 19 December 2019 the European Court of Justice gave its judgment in case C-390/18 (Airbnb Ireland) regarding ‘apps’ that bring service providers and customers together.
Facts (simplified):
Airbnb Ireland UC, a company established in Dublin (Ireland) under Irish law, is part of the Airbnb Group. Airbnb Ireland offers an electronic platform the purpose of which is, on payment of a commission, to establish contact, in particular in France, between, on the one hand, hosts, whether professionals or private individuals, with accommodation to rent and, on the other, people looking for such accommodation.
Airbnb Payments UK Ltd, a company established in London (United Kingdom) under the law of the United Kingdom, provides online payment services as part of that contact service and manages the payment activities of the Group in the European Union. In addition, Airbnb France SARL, a company established under French law and a supplier to Airbnb Ireland, is responsible for promoting that platform among users in the French market by organising, inter alia, advertising campaigns for target audiences.
Apart from the service of connecting hosts and guests using its electronic platform which centralises offers, Airbnb Ireland offers the hosts a certain number of other services, such as a format for setting out the content of their offer, with an option for a photography service, and also with an option for civil liability insurance and a guarantee against damages for up to EUR 800 000. Furthermore, it provides them with an optional tool for estimating the rental price having regard to the market averages taken from that platform. In addition, if a host accepts a guest, the guest will transfer to Airbnb Payments UK the rental price to which is added 6% to 12% of that amount in respect of charges and the service provided by Airbnb Ireland. Airbnb Payments UK holds the money on behalf of the guest and then, 24 hours after the guest checks in, sends the money to the host by transfer, thus giving the guest assurance that the property exists and the host a guarantee of payment. Finally, Airbnb Ireland has put in place a system whereby the host and the guest can leave an evaluation on a scale of zero to five stars, and that evaluation is available on the electronic platform at issue.
In practice, as is apparent from the explanations provided by Airbnb Ireland, internet users looking for rental accommodation connect to its electronic platform, identify the place where they wish to go to and the period and number of persons of their choice. On that basis, Airbnb Ireland provides them with the list of available accommodation matching those criteria so that the users can select the accommodation of their choice and proceed to reserve it online.
In that context, users of the electronic platform at issue, both hosts and guests, conclude a contract with Airbnb Ireland for the use of that platform and with Airbnb Payments UK for the payments made via that platform.
The French Association pour un hébergement et un tourisme professionnels (Association for professional tourism and accommodation, AHTOP) lodged a complaint together with an application to be joined as a civil party to the proceedings, inter alia, for the practice of activities concerning the mediation and management of buildings and businesses without a professional licence, under the Hoguet Law.
In support of its complaint, AHTOP claims that Airbnb Ireland does not merely connect two parties through its platform; it also offers additional services which amount to an intermediary activity in property transactions.
Airbnb Ireland denies acting as a real estate agent and argues that the Hoguet Law is inapplicable on the ground that it is incompatible with Directive 2000/31.
In that context, the investigating judge of the tribunal de grande instance de Paris (Regional Court, Paris) is uncertain whether the service provided by Airbnb Ireland should be classified as an ‘information society service’ within the meaning of that directive and, if so, whether it precludes the Hoguet Law from being applied to that company in the main proceedings or whether, on the contrary, that directive does not preclude criminal proceedings being brought against Airbnb Ireland on the basis of that law.
The tribunal de grande instance de Paris (Regional Court, Paris) decided to ask the following questions to the European Court of Justice for a preliminary ruling:
‘(1) Do the services provided in France by Airbnb Ireland via an electronic platform managed from Ireland benefit from the freedom to provide services established in Article 3 of [Directive 2000/31]?
(2) Are the restrictive rules relating to the exercise of the profession of real estate agent in France laid down by [the Hoguet Law] enforceable against Airbnb Ireland?’
Judgment:
The ECJ rules as follows:
1. Article 2(a) of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’), which refers to Article 1(1)(b) of Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services, must be interpreted as meaning that an intermediation service which, by means of an electronic platform, is intended to connect, for remuneration, potential guests with professional or non-professional hosts offering short-term accommodation, while also providing a certain number of services ancillary to that intermediation service, must be classified as an ‘information society service’ under Directive 2000/31.
Source: Curia
Note: This case is not a VAT-case.
