Comments on ECJ C-622/23: Compensation for dissolved service is subject to VAT levy

• The Court of Justice of the European Union (CJEU) determined that the remuneration received by rhtb is considered payment for a service rendered.
• Rhtb had initiated work on a €5.4 million project but was later informed by Parkring 14-16 Immobilienverwaltung GmbH that they no longer wanted rhtb to continue the project.
• An Austrian court initially ruled that rhtb was entitled to the full remuneration agreed upon but questioned whether the VAT included should be classified as remuneration.
• The CJEU clarified that the amount owed to rhtb corresponds to the full contractual amount for the service, rather than as a flat-rate compensation for damages.
• The ruling emphasizes that the remuneration is linked to the service performed and not merely a compensation for potential losses.

Sources

• Taxlive
• BTW jurisprudentie

See also

• ECJ VAT Case C-622/23 (RHTB) – Judgment – VAT Implications in Work Contract Cancellations

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