ECJ C-60/23 (Digital Charging Solutions) – Judgment – Charging electricity for electric vehicles at public points is a supply of goods

On October 17, 2024, the ECJ issued the Judgment in the case C-60/23 (Digital Charging Solutions).

Context: Reference for a preliminary ruling – Taxation – Value added tax (VAT) – Directive 2006/112/EC – Articles 14, 15 and 24 – Recharging points for electric vehicles – Provision of devices for recharging electric vehicles, supply of the necessary electricity, and provision of technical support and IT services – Classification as a ‘supply of goods’ or a ‘supply of services’ – Article 14(1), Article 14(2)(c) and Article 28 – Nature and role of the device provider in that supply

Summary

Overview of Digital Charging Solutions: Digital Charging Solutions, based in Germany, provides Swedish electric vehicle users with access to a charging point network, facilitating services like location tracking and price information while not operating the charging points themselves.
Tax Ruling Dispute: Digital Charging Solutions sought a tax ruling from Sweden’s Tax Law Commission, which characterized their services as a complex transaction primarily involving the supply of electricity, while Digital Charging Solutions contended it involved separate supplies of electricity and network access services.
Court’s Preliminary Ruling: The Högsta förvaltningsdomstolen referred questions to the Court of Justice regarding whether the electricity supplied for vehicle charging constitutes a supply of goods and if the contractual structure allows for multiple supplies or a single complex transaction.
Interpretation of VAT Directive: The Court ruled that the supply of electricity for charging electric vehicles at public points is considered a supply of goods and clarified that such transactions involve a chain of operations where electricity is delivered to the user through an intermediary company.
Legal Framework for Commission Contracts: The ruling emphasized that if the intermediary acts in its own name but on behalf of the user under a commission contract, it satisfies the conditions for VAT treatment under the applicable EU directives, determining how electricity is supplied and taxed in this context.

Relevant articles in the EU VAT Directive 2006/112/EC

Articles 14, 15, 24 and 28 of the EU VAT Directive 2006/112/EC.

Article 14
1. ‘Supply of goods’ shall mean the transfer of the right to dispose of tangible property as owner.

Article 15
1. Electricity, gas, heat or cooling energy and the like shall be treated as tangible property.
2. Member States may regard the following as tangible property:
(a) certain interests in immovable property;
(b) rights in rem giving the holder thereof a right of use over immovable property;
(c) shares or interests equivalent to shares giving the holder thereof de jure or de facto rights of ownership or possession over immovable property or part thereof.

Article 24
1. ‘Supply of services’ shall mean any transaction which does not constitute a supply of goods.

Article 28
Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.

Facts & background

DCS has its place of business in Germany with no fixed establishment in Sweden. That company supplies EV users in Sweden with access to a network of charging points. Via that network, users receive real-time information on prices, location and availability of charging points, in addition, to functions for locating charging points and route planning.
The charging points on the network are not operated by DCS but by charge-point operators (CPOs) with which DCS has entered into contracts. DCS provides EV users with a card and an application for authentication to enable them to charge their vehicles at the charging points (‘card/app users’). When the card or application is used, the charging session is registered with a CPO, which then invoices DCS for that session. Invoicing takes place on a monthly basis at the end of each calendar month and payment must be made within 30 days.
On the basis of the invoices received from the CPOs, DCS bills the card/app users, first for the quantity of electricity supplied on a monthly basis, and second for access to the network and adjacent services. The price for the electricity supplied varies depending on the quantity charged, but a fixed fee is levied for access and the service provided, which is charged regardless of whether the user actually purchased electricity during the relevant period or not. It is not possible only to purchase electricity from the company without at the same time paying for access to the network.
On 14 April 2021, DCS applied to the Skatterättsnämnden (Revenue Law Commission, Sweden) for a tax ruling. On 8 April 2022, that government agency issued a ruling stating that the supply made by DCS constituted a complex transaction principally characterised by the delivery of electricity to users and that the place of delivery was to be regarded as being in Sweden.
The Skatteverket (Swedish Tax Agency) brought an action before the Högsta förvaltningsdomstolen (Supreme Administrative Court), the referring court, requesting confirmation of that tax ruling. DCS also appealed to that court, requesting that the tax ruling be amended. That company argued before the national court that there were two separate supplies, namely a supply of electricity and a supply of services (the facilitation of access to the network of charging points), so that the only part of the supply that should be taxed in Sweden is the part consisting of the supply of electricity.
As is apparent from the request for a preliminary ruling, the Skatterättsnämnden (Revenue Law Commission) is divided. On the one hand, the majority takes the view that CPOs supply electricity to DCS, which in turn supplies it to the users. This is therefore a chain of operations in which CPOs are not contractually bound to those users.
On the other hand, a minority within the Skatterättsnämnden (Revenue Law Commission) takes the view that DCS provides users with a service consisting, in particular, of the provision of a network of charging points and subsequent invoicing, which implies that it grants them some form of credit for the purchase of electricity. (4) This approach takes particular account of the fact that users are free to choose among conditions such as the quality, quantity, time of purchase and manner of use of the electricity.

Questions

Question 1: Does a supply consisting of charging an electric vehicle in a charging station to the user of the vehicle constitute a supply of a good under Articles 14(1) and 15(1) of the VAT Directive?

Question 2: If the answer to question 1 is yes, then such a delivery must be considered to exist at all stages of a transaction chain that includes an intermediate company where the transaction chain is accompanied by agreements at each stage, but only the user of the vehicle has circumstances such as quantity, time and place for charging and how the electricity will be used?

AG Opinion

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

must be interpreted as meaning that the recharging of an electric vehicle at a network of charging points to which a user has access by means of a subscription concluded with a company other than the charging-point operator implies that the electricity consumed is delivered from that operator to that user, and the company offering access to those charging points acts, in that supply, as a commissionaire within the meaning of Article 14(2)(c) of that directive.

Alternatively, if the two conditions of Article 14(2)(c) of Directive 2006/112 are not met, it should be considered that the supply of electricity to the user is deemed to be made by the company which provides access to a network of charging points to users within the meaning of Article 14(1) of that directive.

Decision (unofficial translation)

1. Article 14(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2009/162/EU of 22 December 2009, read in conjunction with Article 15(1) of Directive 2006/112, as amended,

must be interpreted as meaning that:

The supply of electricity in order to charge an electric vehicle at a recharging point forming part of a public network of such points constitutes a supply of goods, within the meaning of the first of those provisions.

(2) Article 14 of Directive 2006/112, as amended by Directive 2009/162, read in conjunction with Article 15(1) of Directive 2006/112, as amended,

must be interpreted as meaning that:

the charging of an electric vehicle at a network of public recharging points to which the user has access by means of a subscription concluded with a company other than the operator of that network implies that the electricity consumed is deemed to be delivered, first, by the operator of that network to the company offering access to it and, secondly, by that company to that user, even if the latter chooses the quantity, time and place of recharging and the manner of using the electricity, where that company acts in its own name but on behalf of the user under a commission contract, within the meaning of Article 14(2)(c), of Directive 2006/112, as amended.

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