Background

Svalner Atlas has represented a company that is a so-called E-Mobility Service Provider (EMSP) offering a charging service to people with electric vehicles. The service includes access to and information about a network of charging stations, as well as administration and payment for individual drivers’ charges. In order to provide its service, the company has entered into agreements with so-called Charge Point Operators (CPOs) who operate, manage and administer one or more charging stations.

The Supreme Administrative Court and the European Court of Justice have previously stated that the supply of electricity can be considered to take place in two stages, i.e. from the CPO to the EMSP, and from the EMSP to end customers. In the same ruling, it was also stated that the EMSP’s offer should be divided into two supplies: a supply of electricity and a supply of services. This assessment is based on the agreements and contractual terms that were relevant to the case. For more information, see here.

As a final step, the Supreme Administrative Court has now confirmed that the company’s service falls within the definition of an electronic service. In short, this means that the service is taxable in the country where the customers are established in B2C relationships.

Comment

The ruling puts an end to a long process that has been going on for several years. The outcome is surprising in many respects when compared to the interpretation at the start of the process.

The most important conclusion is that the courts have placed great emphasis on the wording of agreements and contractual terms to ensure that VAT treatment is in line with the “economic reality”.

That said, the case concerns an industry whose conditions and circumstances are changing rapidly. We would therefore be cautious about drawing parallels between the court’s conclusions and new business models, business relationships and products that have been developed in recent times.

If you are interested in hearing more about the case and our thoughts on its possible significance, please feel free to contact one of our experts.