Case C‑295/17

MEO — Serviços de Comunicações e Multimédia SA

v

Autoridade Tributária e Aduaneira

(Request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa))

(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Scope — Taxable transactions — Supply for consideration — Distinction between non-taxable damages and interest and the taxable supply of services provided in return for ‘compensation’)

Summary — Judgment of the Court (Fifth Chamber), 22 November 2018

1. Harmonisation of fiscal legislation — Common system of value added tax — Taxable amount — Reduction in the case of cancellation, refusal or where the price is reduced — Absence of actual recovery of the amount payable in the case of early termination of the contract — Adjustment of the corresponding tax

   (Council Directive 2006/112, Art. 73)

2. Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Supply of services effected for consideration — Contract for the supply of services with a minimum commitment period — Remuneration for the supply of services — Concept of remuneration — Predetermined amount received in the event of early termination which corresponds to the amount relating to the remainder of the contractual period — Included

   (Council Directive 2006/112, Art. 2(1)(c))

3. Harmonisation of fiscal legislation — Common system of value added tax — Taxable transactions — Supply of services effected for consideration — Contract for the supply of services with a minimum commitment period — Predetermined amount received in the event of early termination — Classification of that amount as remuneration for the supply of services — Purpose of deterrence and remedy — Higher amount than that of a contract concluded for an indefinite period and regarded under national law as a penalty — No effect of those factors on that classification

   (Council Directive 2006/112, Art. 2(1)(c))

1.  See the text of the decision.

   (see paras 53-56)

2.  Article 2(1)(c) of the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the predetermined amount received by an economic operator where a contract for the supply of services with a minimum commitment period is terminated early by its customer, or for a reason attributable to the customer, which corresponds to the amount that the operator would have received during that period in the absence of such termination — a matter which it is for the referring court to determine — must be regarded as the remuneration for a supply of services for consideration and subject, as such, to VAT.

   (see para. 57, operative part 1)

3.  The fact that the objective of the lump sum is to discourage customers from not observing the minimum commitment period and to make good the damage that the operator suffers in the event of failure to observe that period, the fact that the remuneration received by a commercial agent for the conclusion of contracts stipulating a minimum period of employment is higher than that provided for under contracts which do not stipulate such a period, and the fact that the amount invoiced is classified under national law as a penalty, are not decisive for classifying the amount predetermined in the services contract which the customer is liable to pay in the event of its early termination.

   In this respect, it should be noted that the concept of ‘supply of services’ within the meaning of the VAT Directive must be interpreted without regard to the purpose or results of the transactions concerned (see, to that effect, judgment of 20 June 2013, Newey, C‑653/11, EU:C:2013:409, paragraph 41).

   On the other hand, as has been held in paragraph of 43 the present judgment, it is essential to take into account the economic reality of the transaction at issue, which constitutes a fundamental criterion for the application of the common system of VAT (see, to that effect, judgment of 20 June 2013, Newey, C‑653/11, EU:C:2013:409, paragraphs 42, 48 and 49 and the case-law cited).

   The Court of Justice has consistently held that the terms of a provision of EU law which makes no express reference to the law of the Member States must normally be given an autonomous and uniform interpretation (see, to that effect, judgment of 16 November 2017, Kozuba Premium Selection, C‑308/16, EU:C:2017:869, paragraph 38 and the case-law cited).

   (see paras 60, 61, 67, 70, operative part 2)