On January 18, 2017, the ECJ issued its decision in the case C-37/16 (SAWP).
Context: Reference for a preliminary ruling — Taxation — Common system of value added tax — Taxable transactions — Concept of ‘supply of services for consideration’ — Payment of fees, in respect of fair compensation, to organisations collectively managing copyright and related rights — Not included
Article in the EU VAT Directive
Articles 24(1), 25 and 220(1) of the EU VAT Directive 2006/112/EC
Article 24(1) (Taxable transaction – Supply of services)
‘“Supply of services” shall mean any transaction which does not constitute a supply of goods.’
Article 25 (Taxable transaction – Supply of services)
A supply of services may consist, inter alia, in one of the following transactions:
- (a) the assignment of intangible property, whether or not the subject of a document establishing title;
- (b) the obligation to refrain from an act, or to tolerate an act or situation;
- (c) the performance of services in pursuance of an order made by or in the name of a public authority or in pursuance of the law.’
Article 220(1) (Invoicing – Issue of invoices)
‘Every taxable person shall ensure that, in respect of the following, an invoice is issued, either by himself or by his customer or, in his name and on his behalf, by a third party:
(1) supplies of goods or services which he has made to another taxable person or to a non-taxable legal person;
Facts
- SAWP requested the Minister for Finance to adopt a position as to whether fees on blank media and recording and reproduction devices paid by producers and importers of such devices and media pursuant to Article 20 of the Law of 4 February 1994 on copyright and related rights are subject to VAT.
- By an individual opinion of 20 August 2012, the Minister for Finance stated that the sums paid to SAWP by producers and importers of blank media and recording and reproduction devices constitute a payment for the use of the copyright or related rights that are connected with the sale of equipment for copying and recording works and that, therefore, those sums must be regarded as remuneration for the services supplied by the holders of copyright or related rights and must, as such, be subject to VAT.
- SAWP then brought an action before the Wojewódzki Sąd Administracyjny w Warszawie (Regional Administrative Court, Warsaw, Poland) and requested that the individual opinion be annulled.
Questions
Do authors, performers and other rightholders supply services, within the meaning of Articles 24(1) and 25(a) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, 1 to producers and importers of audio recorders and similar devices and blank media, on whom collective management organisations levy on behalf of those authors, performers and other rightholders, but in their own name, fees on those devices and media by virtue of their sale?
If the answer to Question 1 is in the affirmative, are collective management organisations, in levying a fee on devices and media by virtue of their sale by producers and importers, acting as taxable persons, within the meaning of Article 28 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), who are required to document those activities by means of an invoice for the purposes of Article 220(1)(1) of that directive, issued to producers and importers of audio recorders and similar devices and blank media, showing VAT as due by virtue of the fees, and, at the time at which the fees levied on behalf of the authors, performers and other rightholders are distributed to them, are the latter required to document receipt of the fees by means of an invoice indicating that VAT issued to the collective management organisation levying the fee?
AG Opinion
None
Decision
Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010, must be interpreted as meaning that holders of reproduction rights do not make a supply of services, within the meaning of that directive, to producers and importers of blank media and of recording and reproduction devices on whom organisations collectively managing copyright and related rights levy on behalf of those rightholders, but in their own name, fees in respect of the sale of those devices and media.
Summary
The VAT Directive, as amended by Council Directive 2010/45/EU of 13 July 2010, must be interpreted as meaning that holders of reproduction rights do not provide a service within the meaning of that directive to producers and importers of blank media and of recording and reproduction establishments from which collective management organizations for copyright and related rights, on behalf of these rightholders, but in their own name, collect a levy on the sale of these establishments and media.
Source:
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