1.

There is a steady increase in the number of registered electric vehicles (EV) in the European Union. ( 2 ) That is in line with the European Green Deal aimed at making the European Union a climate-neutral continent by the year 2050. The use of EVs inherently requires an accompanying infrastructure, such as charging points.

2.

In parallel with the changes in the real world, it is necessary to adopt or (re)interpret the laws that already exist in order to govern the new relationships that emerge with such change. The present case addresses that topic, as the national court seeks the interpretation of the VAT Directive ( 3 ) when applied to the transactions that arise out of the use of the EV charging devices (such as a card or an application).

3.

The present reference has arisen from a dispute before the Högsta förvaltningsdomstolen (Supreme Administrative Court, Sweden) between Digital Charging Solutions GmbH (‘DCS’), a company incorporated under German law, and the Skatteverket (Swedish Tax Agency, Sweden) concerning the validity of the latter’s tax ruling dated 8 April 2022 (‘the tax ruling’).

4.

DCS has its place of business in Germany with no fixed establishment in Sweden. That company supplies EV users in Sweden with access to a network of charging points. Via that network, users receive real-time information on prices, location and availability of charging points, in addition, to functions for locating charging points and route planning.

5.

The charging points on the network are not operated by DCS but by charge-point operators (CPOs) with which DCS has entered into contracts. DCS provides EV users with a card and an application for authentication to enable them to charge their vehicles at the charging points (‘card/app users’). When the card or application is used, the charging session is registered with a CPO, which then invoices DCS for that session. Invoicing takes place on a monthly basis at the end of each calendar month and payment must be made within 30 days.

6.

On the basis of the invoices received from the CPOs, DCS bills the card/app users, first for the quantity of electricity supplied on a monthly basis, and second for access to the network and adjacent services. The price for the electricity supplied varies depending on the quantity charged, but a fixed fee is levied for access and the service provided, which is charged regardless of whether the user actually purchased electricity during the relevant period or not. It is not possible only to purchase electricity from the company without at the same time paying for access to the network.

7.

On 14 April 2021, DCS applied to the Skatterättsnämnden (Revenue Law Commission, Sweden) for a tax ruling. On 8 April 2022, that government agency issued a ruling stating that the supply made by DCS constituted a complex transaction principally characterised by the delivery of electricity to users and that the place of delivery was to be regarded as being in Sweden.

8.

The Skatteverket (Swedish Tax Agency) brought an action before the Högsta förvaltningsdomstolen (Supreme Administrative Court), the referring court, requesting confirmation of that tax ruling. DCS also appealed to that court, requesting that the tax ruling be amended. That company argued before the national court that there were two separate supplies, namely a supply of electricity and a supply of services (the facilitation of access to the network of charging points), so that the only part of the supply that should be taxed in Sweden is the part consisting of the supply of electricity.

9.

As is apparent from the request for a preliminary ruling, the Skatterättsnämnden (Revenue Law Commission) is divided. On the one hand, the majority takes the view that CPOs supply electricity to DCS, which in turn supplies it to the users. This is therefore a chain of operations in which CPOs are not contractually bound to those users.

10.

On the other hand, a minority within the Skatterättsnämnden (Revenue Law Commission) takes the view that DCS provides users with a service consisting, in particular, of the provision of a network of charging points and subsequent invoicing, which implies that it grants them some form of credit for the purchase of electricity. ( 4 ) This approach takes particular account of the fact that users are free to choose among conditions such as the quality, quantity, time of purchase and manner of use of the electricity.

11.

In those circumstances, the Högsta förvaltningsdomstolen (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

12.

Written observations were submitted to the Court by DCS, the Skatteverket (Swedish Tax Agency), the Hungarian Government and the European Commission.

13.

A hearing was held on 7 February 2024 at which the Swedish Government and the Commission presented oral argument.

14.

Article 14(1) of the VAT Directive states that ‘“supply of goods” shall mean the transfer of the right to dispose of tangible property as owner’.

15.

Article 14(2) of that directive reads:

‘In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:

…

16.

Article 28, which deals with the provisions of services, provides:

‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’

17.

The Court considered that the reasoning applied to the interpretation of Article 28 of the VAT Directive applies also to the supply of goods based on a contract under which commission is payable on purchase, in accordance with Article 14(2)(c) of the VAT Directive. ( 5 )

18.

Article 15 of the VAT Directive provides that, for the purpose of VAT, electricity is a good.

19.

The Court considers that a complex transaction consisting of the supply of electricity to the battery of a vehicle and access to charging devices and necessary technical and IT support constitutes a supply of goods within the meaning of Article 14(1) and Article 15(1) of the VAT Directive. ( 6 )

20.

That seems to settle the first question of the referring court. Therefore, at the request of the Court, the present Opinion is limited to the analysis of the second question.

21.

By the second question, the referring court essentially wishes to find out how the VAT Directive applies to each stage of the transaction involved in charging an EV through the use of a card or app.

22.

To answer that question, it is important to stress at the outset that the fundamental criteria for the application of the common system of VAT are economic and commercial realities. The Court has repeated this on multiple occasions. ( 7 )

23.

It is therefore necessary to begin the analysis by asking how the transaction(s) at issue in the present case take(s) place.

24.

It is my understanding that DCS performs two different supplies: a supply of services and a supply of goods.

25.

The supply of services consists in providing an EV driver with a card or an app which provides information about, and allows access to, the network of charging points. For that supply of services, DSC issues a (monthly) invoice with a fixed fee, regardless of whether electricity is bought or not. On the basis of Article 43 of the VAT Directive, the place of ‘supply’ of that service is in Germany, because that is where the service provider is established.

26.

The supply of goods, namely electricity, is a separable supply from that of services. For the former, an invoice is issued at the end of each month, depending on the quantity of electricity used.

27.

If separate invoices do not necessarily exclude a single complex supply and thus a single transaction, ( 8 ) when two supplies do not appear to be so closely linked that they would constitute an indivisible economic supply, it would be artificial not to keep them separate. Consequently, they must, in principle, be considered to be distinct and independent transactions for VAT purposes. ( 9 )

28.

To consider supplies in the main proceedings as one complex supply rather than two separate supplies would, in my view, disregard the relevant contractual arrangements and thus neglect economic and commercial realities. ( 10 )

29.

Acknowledging that access to the network is autonomous from the supply of electricity would, in my view, be the most realistic legal representation for the purpose of the VAT treatment of the legal relationships involved. Therefore, DCS’s argument before the referring court (see point 8 of the present Opinion) seems to be correct.

30.

Both the Commission and the Swedish Government agreed at the hearing that the supply of services consisting of access to the network, invoiced separately, is not of interest for the present case. Therefore, the focus here is on the legal qualification of the transactions in the second supply, the supply of electricity.

31.

The transactions involved in the supply of electricity concern the relationship between the CPO and DCS and the relationship between DCS and the card/app user. No direct relationship between the CPO and the card/app user exists; nor is that disputed in the present case.

32.

There are three possible ways the relationships involved could be characterised for VAT purposes.

33.

The first follows from the Auto Lease Holland line of case-law. ( 11 ) This line of case-law treats the transaction between DCS and the card/app user as a supply of services granting credit (thus exempted from VAT by Article 135(1)(b) of the VAT Directive). I do not find such an approach appropriate for the treatment of the present transactions. Nevertheless, as that approach is proposed by a minority within the Skatterättsnämnden (Revenue Law Commission), I will analyse that option first (A).

34.

The second option is the treatment of the two transactions as successive sales, both submitted under Article 14(1) of the VAT Directive; this is the so-called buy-sell model. That is the position of the majority within the Skatterättsnämnden (Revenue Law Commission), as well as all the participants in the present procedure. I will analyse that option under (B).

35.

The third possibility is to understand the transactions involved as being based on a commission model under Article 14(2)(c) of the VAT Directive. That option, despite not being raised by either the reference for a preliminary ruling or the participants in the written part of the procedure, was discussed at the hearing. Said option is, to my mind, the most appropriate characterisation of the transactions involved in the present case. I will deal with the application of Article 14(2)(c) of the VAT Directive under (C).

36.

The judgments in Auto Lease Holland and Vega International concerned the VAT treatment of transactions involved in the use of fuel cards. The circumstances of those two cases are not identical, but they bear some common features. They both involved multiple actors beyond the card user, the card supplier and the energy supplier, and both concerned successive sales through a financial transaction. In those judgments, the Court placed its emphasis less on the supply of goods (fuel) than on the modalities of payment of that supply. ( 12 )

37.

The result in Vega International, which is only the logical consequence of Auto Lease Holland, was the finding that the transaction between the card issuer and the card user amounted to a credit-granting service.

38.

However, as illustrated by scholarly writings ( 13 ) and discussions within the framework of the VAT Committee, ( 14 ) those cases raised different concerns. Many critics reproached the fact that the proposed interpretation led to the invisibility of the intermediary.

39.

To my mind, it is doubtful that the concrete circumstances of those cases are comparable to the circumstances of the present case. More generally, the business model of EV charging is not the same as the one of fuel charging, at least not at the moment. While it is possible to charge a non-electric vehicle using the fuel card or any other card or cash and to do so at any fuel station, that is not the case for EV charging. EVs use different charging systems and can only be charged at the charging points included in the network at issue. Charging cannot be carried out without the use of a card/app which allows access to the network. Finally, it is common ground that EV cards/apps are not payment instruments.

40.

Furthermore, if the transaction between the card issuer and the card/app user is a different, non-taxable transaction (grant of a credit), the user will not be able to deduct VAT if it is a taxable person, as the invoice for electricity is only issued by the CPO to the card issuer.

41.

Therefore, the findings of the Auto Lease Holland line of case-law are not automatically transposable to different business models and operations of EV charging devices, and should not therefore be used outside of the circumstances in which those rulings were issued. ( 15 )

42.

The buy-sell model sees the transactions at issue as successive sales with a single horizontal chain of deliveries. DCS buys electricity from the CPO and then sells it to the card/app user.

43.

For VAT purposes, that model relies on Article 14(1) of the VAT Directive. Each transaction is a separate supply of goods, which, according to that provision, means the transfer of the right to dispose of the tangible property as owner.

44.

As explained by the Court, the transfer of ownership covers any transfer of tangible property by one party that empowers the other party actually to dispose of it as if he or she were its owner. ( 16 )

45.

This might be seen as requiring that some form of control over the goods needs to be transferred in order for a transaction to qualify as a supply of goods. ( 17 ) This is particularly difficult when the good supplied is energy, such as in the main proceedings, which cannot be transferred or stored easily. ( 18 )

46.

Indeed, in comparison to other goods (as illustrated by Article 15(1) and Articles 38 and 39 of the VAT Directive), electricity is of a specific nature, one of the characteristics being that it is much more difficult than any other goods to trace its physical flow. ( 19 )

47.

If applied to the circumstances of the present case, it would be necessary to transfer the ownership of electricity from the CPO to DCS in order for the latter to be able to then sell it to the card/app user. That is, of course, not the circumstances of the present case. Rather, the goods are transferred directly from the CPO to the card/app user. Thus, neither the actual possession of electricity, nor the legal title over it, are formally transferred from the CPO to DCS.

48.

Nevertheless, the law allows for a fictional legal transfer of ownership to happen without an actual transfer.

49.

Indeed, according to the case-law, there can be lawful reasons as to why goods have not been received directly from the issuer of the invoice such as, inter alia, the existence of two successive sales of the same goods which, on instructions, are transported directly from the first vendor to the second person acquiring the goods, with the result that there are two successive supplies within the meaning of Article 14(1) of the VAT Directive, but a single actual transport. In addition, it is not necessary for the first person acquiring the goods in question to have become the owner of those goods at the time of that transport, given that the existence of a supply within the meaning of that provision does not presuppose the transfer of the legal ownership of the goods. ( 20 )

50.

Therefore, the circumstances in the main proceedings may be construed as falling under the buy-sell model, which implies successive sales. It requires recourse to the fiction that the right to dispose of electricity as owner was transferred from the CPO to DCS, which enables the latter to then sell the goods at issue.

51.

For VAT purposes, both transactions are taxable transactions. As the invoice for electricity is issued from the card issuer to the card/app user, the latter may deduct VAT if it is a taxable person.

52.

Nevertheless, in the circumstances of the present case, DCS neither promises to the CPO nor decides to buy an amount of electricity. It is actually the card/app user’s action that initiates the buying process when he or she decides which charging point the electricity is ordered from and what quantity of electricity is to be transferred, and it is in that user’s vehicle where the supply occurs.

53.

Thus, except for the risk of not being paid by the card/app user, DCS does not take any entrepreneurial risk in that supply of electricity because it is all already sold and delivered when it invoices the user.

54.

It is therefore worth exploring whether the other option, that is, of subsuming the transactions at issue under Article 14(2)(c) of the VAT Directive, does not fit better the economic reality of EV charging.

55.

The commissionaire model would describe the transaction at issue in the present case as involving an agent as an intermediary between the CPO and the card/app user.

56.

There can be two types of commissionaire model: the sales commissionaire model and the purchase commissionaire model. ( 21 )

57.

In the sales commissionaire model, the principal is the CPO, whilst the agent is the device issuer (such as DCS). In that model, the device issuer sells electricity in its own name but on behalf of the CPO to the card/app user.

58.

In the purchase commissionaire model, the principal is the card/app user and the agent is DCS. In that model, the device issuer (DCS) buys electricity from the CPO in its own name but on behalf of the card/app user. That model best describes the situation in the present case, as the buying of electricity happens, as I have already stated (see point 52 of the present Opinion), on the initiative of the card/app user.

59.

Legally speaking, both commissionaire models build on Article 14(2)(c) and Article 28 of the VAT Directive. ( 22 ) Article 28 provides that in a situation where a person acts as an agent, that is, in his or her own name but on behalf of somebody else, that person shall be deemed to have received and supplied the service at issue himself or herself. Even if Article 28 of the VAT Directive only deals with the supply of services, the Court has held that the same may be applied also to the supply of goods. ( 23 )

60.

The Court has further considered that Article 14(2)(c) of that directive creates the legal fiction of two identical supplies of goods made consecutively, which fall within the scope of VAT. ( 24 )

61.

Therefore, to fall within the commissionaire model, the transactions involved must fulfil two requirements. First, there has to be an agency in performance of which the commission agent acts on behalf of the principal in the supply of goods and/or services and, second, the supplies of goods and/or services acquired by the commission agent and the supplies of goods and/or services sold or transferred to the principal must be identical. ( 25 )

62.

At the hearing, the Swedish Government and the Commission agreed that both those conditions were met in the circumstances involved in the main proceedings.

63.

I agree.

64.

Regarding the first condition of agency, the situation at issue can more accurately be described as a transfer of goods based on the agency contract, in which a card/app user is a principal and DCS is the agent, rather than as a succession of bilateral agreements. Even the wording of the question referred to the Court acknowledges that DCS appears as an intermediary.

65.

It is true that there is no explicit request from the card/app user to DCS to purchase electricity on its behalf at the occasion of each charging. However, the Court has already ruled that the buyer does not explicitly have to give a mandate to the commissionaire. ( 26 ) Alternatively, the presentation of the card/app at the charging point may be understood as a mandate to the agent to buy a specific amount of electricity.

66.

Concerning the second condition, it has been argued that the supply of electricity by the CPO to the card device is not identical to the supply of electricity by the device issuer to the user because, in the latter case, there are elements additional to the supply of electricity. ( 27 )

67.

That might be true in some circumstances. ( 28 )

68.

However, in the present case, the supply of the services related to the use of the card/app is separate from the supply of electricity (see point 29 of the present Opinion). The remaining supply of electricity does not differ between the transaction between the CPO and DCS and the transaction between DCS and the card/app user.

69.

Therefore, it appears that both conditions – the presence of agency and the identity of supplies – are fulfilled in the circumstances of the present case and, consequently, the transactions at issue fit the model of the purchase commissionaire.

70.

Finally, the application of the commissionaire model to a situation such as the one in the present case would allow the card/app user that is a taxable person to deduct VAT, given that it receives the invoice with VAT from DCS.

71.

It follows from the foregoing that the transactions involved in the business model at issue in the present case can be described by both Article 14(1) and Article 14(2)(c) of the VAT Directive. Both the buy-sell model and the commissionaire model are capable of describing such successive transactions and chain deliveries.

72.

The question is, which provision should be applied?

73.

In my view, for the business model such as the one in the present case, the commissionaire model as described in Article 14(2)(c) of the VAT Directive is the most suitable VAT treatment.

74.

As far as the relationship between Article 14(1) of the VAT Directive and Article 14(2)(c) thereof is concerned, it may be observed that the definition of the transaction that is the subject of Article 14(2)(c) does not make any reference to the ‘right to dispose of tangible property as owner’, as referred to in Article 14(1). Thus, the Court considered that, while grouping them under the same concept of a ‘supply of goods’, the EU legislature intended to distinguish the transaction referred to in Article 14(2)(c) of the VAT Directive from that referred to in Article 14(1) thereof, as those two transactions are not defined in the same terms. ( 29 ) Hence, though they both deal with the concept of ‘supply of goods’, Article 14(2)(c) of the VAT Directive is autonomous from Article 14(1) thereof. ( 30 )

75.

It is apparent from the wording and scheme of Article 14 of the VAT Directive – and confirmed by the case-law – that paragraph 2 of that provision constitutes, in relation to the general definition set out in paragraph 1 thereof, a lex specialis, the conditions for the application of which are independent of those of paragraph 1. ( 31 )

76.

When a transaction can fall both within the scope of the general rule and within the scope of lex specialis, it should be subject to the latter, otherwise there is no reason for having the specific rule.

77.

Furthermore, describing the relationship at issue by referring to Article 14(2)(c) of the VAT Directive would be less of a ‘fiction’ than relying on Article 14(1) of that directive. Relying on the latter provision requires the assumption that the electricity is successively supplied, but only transported once, and yet each of the involved parties had the possibility to dispose of it as the owner. The commissionaire model, under Article 14(2)(c) of the VAT Directive in conjunction with Article 28 thereof, provides that it is to be deemed that the intermediary received and supplied the electricity himself or herself (see point 59 of the present Opinion). It would thus only be necessary additionally to assume that the card/app user gave the mandate to DCS to buy electricity on his or her behalf, but in his or her own name, every time he or she uses the card/app (see point 65 of the present Opinion).

78.

To ground the reasoning in Article 14(2)(c) of the VAT Directive would avoid any difficulties with regard to disposing of the tangible property as owner. ( 32 )

79.

In addition, to base the reasoning on that same provision would better reflect the true nature of economic and commercial transactions involving charging EV devices, such as those in the main proceedings.

80.

It is true that the VAT Committee issued guidelines on EV charging devices, suggesting the application of Article 14(1) of the VAT Directive. ( 33 ) However, those guidelines are not as straightforward or as exhaustive as one may think or expect.

81.

First, those guidelines cover, for the most part, the relationship between the CPO and the device issuer ( 34 ) and do not necessarily cover all business models of EV charging.

82.

In a model in which there are, as in the present case, two separate supplies and therefore two separate transactions – that is, one supply of service, which is charged with a fixed fee, irrespective of whether electricity is bought or not, and one supply of goods, namely electricity, which is invoiced at the end of each month – it is also possible to apply Article 14(2)(c) of the VAT Directive.

83.

It is, in my view, indicative that DCS does not act as a real supplier of electricity because it does not take any entrepreneurial risk in that supply. Conversely, that company plays an economic role in the supply of goods in the main proceedings and can therefore be regarded as an intermediary. ( 35 )

84.

It thus appears to me to be more accurate in terms of the economic and commercial realities that if there are different sales of the same goods so that the given goods which, on instruction, are transported directly from the first vendor to the person acquiring the goods, with the result that there are two successive supplies, the one in the middle acts only as an intermediary.

85.

Last but not least, if Article 14(2)(c) of the VAT Directive is chosen to govern the transaction of the kind in the present case, the right to deduction ( 36 ) would be transparently secured to the card/app user. Consequently, the proposed solution would be consistent with the principal of fiscal neutrality. ( 37 )

86.

I therefore consider the option based on Article 14(2)(c) of the VAT Directive to be the best-suited solution for the circumstances such as those in the main proceedings.

87.

Only if the two conditions of Article 14(2)(c) of the VAT Directive (agency and identity of supplies) were not met would Article 14(1) of that directive be applicable in the main proceedings. Whether the conditions are met is for the national court to verify.

88.

If Article 14(1) of the VAT Directive is applied, as suggested by the VAT Committee’s guidelines on EV charging devices (see point 80 of the present Opinion), then DCS would qualify, within the meaning of Article 38(2) of that directive, as a ‘taxable dealer’ and the supply of electricity by the CPO to DCS would be deemed to take place where the taxable dealer (DCS) has established its business in accordance with Article 38(1) of that directive. In the circumstances of the present case, that would be in Germany.

89.

In any event, following Article 39 of the VAT Directive, the supply of electricity by DCS to a card/app user who charges his or her EV must be deemed to be made at the place where the driver actually uses and consumes the electricity, that is, at the place where the charging point is located. In the present case, that would be in Sweden.

90.

On the basis of the foregoing, I am of the view that the VAT Directive must be interpreted as meaning that the recharging of an EV at a network of charging points to which a user has access by means of a subscription concluded with a company other than the CPO implies that the electricity consumed is delivered from that operator to that user, and the company offering access to those charging points acts, in that supply, as a commissionaire within the meaning of Article 14(2)(c) of that directive.

91.

Alternatively, if the two conditions of Article 14(2)(c) of the VAT Directive are not met, it should be considered that the supply of electricity to the user is deemed to be made by the company which provides access to a network of charging points to users within the meaning of Article 14(1) of that directive.

92.

In the light of the above, I propose that the Court of Justice answer the questions referred by the Högsta förvaltningsdomstolen (Supreme Administrative Court, Sweden) as follows:

Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax

must be interpreted as meaning that the recharging of an electric vehicle at a network of charging points to which a user has access by means of a subscription concluded with a company other than the charging-point operator implies that the electricity consumed is delivered from that operator to that user, and the company offering access to those charging points acts, in that supply, as a commissionaire within the meaning of Article 14(2)(c) of that directive.

Alternatively, if the two conditions of Article 14(2)(c) of Directive 2006/112 are not met, it should be considered that the supply of electricity to the user is deemed to be made by the company which provides access to a network of charging points to users within the meaning of Article 14(1) of that directive.