Where to locate the service (and hence where to pay VAT) when the online service uses suppliers all over the world, and is marketed throughout the EU? In the context of adult webcams, the CJEU clarifies the principles and confirms, in passing, that porn is “entertainment” within the meaning of the VAT rules.
We know the importance that European Union law attaches to VAT, which is an important source of revenue for States.
In a dematerialized world in which suppliers and customers can be located all over the world, locating the transaction subject to VAT is a complex process.
Example: you are a musician and you also offer CDs and T-shirts to your fans. You should not charge VAT for your performances, as they are exempt from it, but you should charge it on the sale of your CDs and T-shirts.
I am the subject, what should I do?
Are you subject to VAT? There are certain obligations to be observed. You must make a timely declaration of your activities and you must keep correct accounts. Here you will find the precise obligations to be respected. Make the entire calculation for the same is important there with the use of the business calculator.
Activate your VAT number: before starting your activity, you must using your business number.
Introduce a customer list: each year, before March 31, you must enter a specific list of customers to whom you have supplied goods or services.
The VAT rate? For most products and services, a VAT of 21% is applied, with a few exceptions (12% or 6%). Check here the possible rates and the one that applies to you.
VAT administration: you must submit a periodic VAT return to the public authorities. Depending on your activities and your turnover, this declaration must be made on a monthly or quarterly basis.
Initially, this provision was designed for shows, which generally implies a provision of services carried out at a specific location, and for a specific period. The Court reiterates that the EU legislature considered that, to the extent that the provider provides his services in the State in which such services are physically performed and that the organizer of the event collects VAT in that same State paid by the final consumer, the VAT being based on all the services the cost of which is included in the price of the overall service paid by this consumer had to be paid to this State, regardless of the place where the service provider has established its registered office of its economic activity.
But what happens when the service is dematerialized, accessible via the Internet at the time chosen by the recipient? This is the whole point of this case.