Comments on ECJ C-622/23: European Court Confirms VAT on Contract Termination Fees in RHTB Case

• Court of Justice confirms VAT applies to termination fees in RHTB case
• RHTB case follows recent trends including contractual compensations in VAT scope
• Importance emphasized on reviewing contracts for VAT implications
• RHTB, an Austrian company, had its contract terminated by a client leading to legal action for compensation
• Austrian High Court questioned if VAT should be applied to termination fees
• Court of Justice ruled termination fees are within VAT directive scope
• Direct link between service and consideration must exist for VAT on termination fees
• RHTB case provides guidance on VAT treatment of predetermined sums in contracts
• Businesses advised to review contracts for VAT implications due to potential impact of ECJ case law on termination fees

Source: loyensloeff.com

See also

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

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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.