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European Union

ECJ C-909/24 (InvestCapital) – Questions – VAT Treatment of Late Payment Penalties and Clauses

10 hours ago
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– Treaty on the Functioning of the European Union Union: Article 56;
– Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts: Article 3;
– Directive (EU) 2018/1972 of the European Parliament and of the Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code: Articles 101, 102, 105 and 107;
– Directive 2002/22/EC of the European Parliament Council of 7 March 2002 on universal service and user rights in relation to electronic communications networks and services: Article 20.

Article in the EU VAT Directive

Article 2(1)(c) of the EU VAT Directive 2006/112/EC.

Article 2
1. The following transactions shall be subject to VAT:
(c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;

Facts

C-909/24
The applicant ‘InvestCapital’ has brought an action against defendant ‘PN’, for the payment of the of outstanding mobile telephone service bills, fines for late payment, statutory interest and damages for Early termination of a contract. The amount of the fine (0.5% per day) was considered unfair by the court of first instance and not awarded, as well as the damages for premature termination of the contract. The applicant is on appeal against the court’s decision, and argues that the clauses not be dishonest.

C-872/24
The facts and considerations of the present case are substantially the same as those in Case C-909/24.

Consideration:
The referring court considers it necessary to relationship between the rules of EU law and the on the free movement of services, and the provisions of Union law consumer protection rules (specifically the abolition of consumer protection unfair terms). The reason for the referring court’s doubts court that there is a need for a rules with varying content as regards the level of compensation for late payment. The question is in extent to which consumer protection rules also apply assessment of contractual terms relating to the damages for late payment in contracts for electronic communication.

Questions

(1) Is the fact that the national legislation which imposes a certain restriction on the compensation for late payment has been set for legal relationships which do not arise from the operation of a legal relationships arising from the operation of an undertaking is subject to other provisions, as a result of which a limit is not imposed on the penalties applicable to the legal relationships between a provider of electronic communications services (mobile telephony and internet) and but for other legal relationships, such as banking activities are considered to be an essential part of the freedom to provide services provided for in Article 56 et seq. Treaty on the Functioning of the European Union, as set out in the law in the field of electronic communications is governed by Directive 2002/22 on universal service and users’ rights in relation to electronic communications networks and services (Universal Service Directive) and Directive 2018/1972 laying down European Electronic Communications Code, or may a limits the fines to consumers, on the other hand, through the case-law are implemented on the basis of Article 3(3) of the Directive 93/13 on unfair terms in the consumer contracts, in particular point (e) of the Annex to this Regulation. which provides that a term conferring on the seller or supplier the right to to provide a consumer who fails to fulfil his obligations with a disproportionately high damages if it can be unfair to the ?

(2) Do the interpretation and application of Article 3(3) of the Directive 93/13 on unfair terms in the consumer contracts, in particular point (e) of the Annex to this Regulation. Directive, in the context of the assessment of the potentially unfair penalty clause in which the amount of compensation is not due to late payment owed by a consumer because of the invoices for electronic communications services (mobile phones) telephony and internet) by the due date, the set at 0,5 % per day of delay, the following in: – the obligation for the court to take into account the amount of this compensation calculated over a year at an interest rate of 182.5% per year, so that the unfairness of those fines can only be determined by comparing it with the level of the statutory interest rate that would apply if the parties does not pay a certain amount for damages for have established late payment, or – must the court also take into account the actual duration for which a fine of 0.5 %, namely the number of days on which that claim is and the assessment of the actual amount of the penalty claimed in relation to the amount of the principal sum in the take into account?

(3) Is the court, in interpreting and applying Article 3(1)(a) Directive 93/13 on unfair terms in the context of the consumer contracts, and in particular point (e) of the Annex to the Directive, in the context of the assessment of the potential for unfairness of a penalty clause which increases the amount of the damages for late payment incurred by a consumer because he has not received the invoices for electronic communications services (mobile telephony and internet) on due date shall be set at 0,5 % per day of the delay, in addition to the amounts paid by the consumer also take into account the possible damage to the seller, who in turn is a legal relationship in which, in view of the amount of the compensation for late payment similar to obligations if he does not meet his payment obligations?

(4) Can a specific amount of a fine for the be considered unfair where the exceeds the amount of principal payable by a consumer?

(5) Has the classification made by the [Court of Justice] in its judgment of 22 November 2018, MEO — Serviços de Comunicações e Multimédia (C-295/17, EU:C:2018:942),] of the predetermined amount that an economic operator in the event of early termination by its customer, or in order to attributable to his customer, of a service agreement with a minimum contract duration, where this amount corresponds to the amount that that operator will receive during the remaining contract duration if the contract had not been would have ceased if the remuneration for a supply of services for consideration and as such subject to tax on the added value, an autonomous character, so that this classification is relevant only to the interpretation and application of the VAT Directives, or can it also be taken into account in the interpretation and application of Article 4(2) of Directive 1993/13 on unfair terms in consumer contracts, in order to obtain a clause fixing such costs of the scope of this Directive after the adoption of the that that clause concerns the determination of the subject-matter of the agreement and the appropriateness of the price or consideration in relation to the services provided for that purpose or the services provided goods, in so far as it is deemed to be clear and intelligible ?

(6) If the answer to the [previous] question is that the interpretation of the given by the [Court] in the judgment cited above is autonomous and that that interpretation is therefore applicable only in relation to the VAT Directives: may the interpretation of Article 3(1)(EC) (1) and (3) of Directive 93/13 on unfair terms in the consumer contracts, read in conjunction with Article 20 of the Directive 2002/22 on universal service and users’ rights in relation to electronic communications networks and services (Universal Service Directive), with Articles 101, 105 and 107 of the Directive 2018/1972 laying down the European Labour Code electronic communications, and with the provisions of Annex VIII, point 3(iv) of Part A and point 2.4 of Annex IX to this Regulation. a contractual term may be regarded as unfair – and, if so, to what extent – that is included in an agreement for electronic communications services (mobile telephony and internet) that are falls within the scope of Directive 2002/22 or Directive 2018/1972 and which sets an amount to be paid by a economic operator can be recovered as compensation in the situation of that an agreement with a minimum contract duration which is 24-month limit set out in Article 105 of Regulation (EU) Directive 2018/1972, by the customer-consumer, or for a attributable to him is terminated early, and that the corresponding to the amount that that operator would not have to pay in the absence of a would have given such notice during the remaining period – as regards the amount of that amount and on the basis of the assessment that that amount is disproportionate to the damage suffered by the communication service provider, or – on the basis of finding that there is a legal imbalance in the between the rights and obligations of the parties in that a imposed only on the consumer and not on the consumer and not on the communications service provider, in the circumstances where the agreement obliges the provider to pay compensation to the equal to the consideration for the non-payment or the improper service provided when it exceeds the predetermined quality levels does not observe?

(7) To what extent is the examination of the previous question relevant to the that the consumer who has received a agreement to provide electronic communications services to (mobile telephony and internet), certain special offers consisting of price reductions at the purchase of a device or service, while the factual situation established in the present case, it is apparent that the reduction was included in the subscription fee that has been calculated for the entire contract term?

Cited (recent) case law

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