- Contract and Termination: In March 2018, rhtb: project gmbh entered into a contract with Parkring 14-16 Immobilienverwaltung GmbH for a building project worth EUR 5,377,399, including VAT. In June 2018, Parkring terminated the project for reasons not attributable to rhtb.
- Payment Dispute: rhtb requested payment from Parkring as per Austrian law, minus the costs saved from the contract termination. Parkring did not pay, leading rhtb to file a civil claim for EUR 1,540,820, including VAT, which Parkring contested.
- Austrian Court Ruling: The Austrian courts ruled that Parkring was liable to pay for the works not carried out due to the contract termination but referred the VAT applicability question to the CJEU.
- CJEU Decision: The CJEU determined that the amount due for the partially completed services constituted remuneration for a supply of services for consideration. A supply is made when the recipient is placed in a position to benefit from it, regardless of actual use.
- VAT Applicability: The CJEU held that the payment due to rhtb was for the supply of services, not compensation for loss, creating a direct link between the service supply and payment, making it subject to VAT.
Source: taxscape.deloitte.com
See also
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
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.
