# C_2017014EN.01002601.xml

| 16.1.2017 | EN | Official Journal of the European Union | C 14/26 |
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16.1.2017

EN

Official Journal of the European Union

C 14/26

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Reference for a preliminary ruling from First-tier Tribunal (Tax Chamber) (United Kingdom) made on 28 October 2016 — Marcandi Limited, trading as ‘Madbid’ v Commissioners for Her Majesty's Revenue & Customs

(Case C-544/16)

(2017/C 014/32)

Language of the case: English

Referring court

First-tier Tribunal (Tax Chamber)

Parties to the main proceedings

Applicant: Marcandi Limited, trading as ‘Madbid’

Defendant: Commissioners for Her Majesty's Revenue & Customs

Questions referred

| 1. | On the correct interpretation of articles 2(1), 24, 62, 63, 65, and 73 of Council Directive 2006/112/EC (1) of 28 November 2006 on the common system of value added tax, and in circumstances such as those in the main proceedings:






  a) | is the issue of Credits to users, by Madbid, in return for a money payment:






  i. | a ‘preliminary transaction’ outside the scope of article 2(1), of the sort identified by the Court in MacDonald Resorts Ltd v Revenue and Customs Commissioners (C-270/09) [2010] ECR I-13179 ECLI:EU:C:2010:780, at paragraphs 23-42; or |
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1.

On the correct interpretation of articles 2(1), 24, 62, 63, 65, and 73 of Council Directive 2006/112/EC (1) of 28 November 2006 on the common system of value added tax, and in circumstances such as those in the main proceedings:

a)

is the issue of Credits to users, by Madbid, in return for a money payment:

i.

a ‘preliminary transaction’ outside the scope of article 2(1), of the sort identified by the Court in MacDonald Resorts Ltd v Revenue and Customs Commissioners (C-270/09) [2010] ECR I-13179 ECLI:EU:C:2010:780, at paragraphs 23-42; or

| ii. | a supply of services by Madbid within the meaning of article 2(1)(c), namely the grant of a right to participate in online auctions; |
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ii.

a supply of services by Madbid within the meaning of article 2(1)(c), namely the grant of a right to participate in online auctions;

| b) | if the grant of a right to participate in online auctions is a supply of services by Madbid, then is it a supply made ‘for consideration’ within the meaning of article 2(1)(c), namely the payment for it (i.e. the money received by Madbid from a user in return for Credits); |
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b)

if the grant of a right to participate in online auctions is a supply of services by Madbid, then is it a supply made ‘for consideration’ within the meaning of article 2(1)(c), namely the payment for it (i.e. the money received by Madbid from a user in return for Credits);

| c) | is the answer to (b) different if the payment for the Credits also serves as an entitlement for the user to acquire goods to the same value in the event of the user not succeeding in the auction; |
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c)

is the answer to (b) different if the payment for the Credits also serves as an entitlement for the user to acquire goods to the same value in the event of the user not succeeding in the auction;

| d) | if Madbid does not make a supply of services for consideration when it issues Credits to its users in return for a money payment, does it make such a supply at any other time; |
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d)

if Madbid does not make a supply of services for consideration when it issues Credits to its users in return for a money payment, does it make such a supply at any other time;

and what principles should be applied in determining the answer to those questions?

| 2. | On the correct interpretation of articles 2(1), 14, 62, 63, 65, 73 and 79(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax what, in circumstances such as those in the main proceedings, is the consideration obtained by Madbid in return for the supplies of goods that it makes to users, for the purposes of articles 2(1)(a) and 73? In particular, and taking into account the answer to Question 1:






  a) | is the money paid by a user to Madbid for Credits a ‘payment...on account’ for a supply of goods within the scope of article 65, so that VAT is ‘chargeable’ on receipt of that payment, and such that the payment received by Madbid from the user is consideration for a supply of goods; |
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2.

On the correct interpretation of articles 2(1), 14, 62, 63, 65, 73 and 79(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax what, in circumstances such as those in the main proceedings, is the consideration obtained by Madbid in return for the supplies of goods that it makes to users, for the purposes of articles 2(1)(a) and 73? In particular, and taking into account the answer to Question 1:

a)

is the money paid by a user to Madbid for Credits a ‘payment...on account’ for a supply of goods within the scope of article 65, so that VAT is ‘chargeable’ on receipt of that payment, and such that the payment received by Madbid from the user is consideration for a supply of goods;

| b) | if a user buys goods through the Buy Now or Earned Discount features, is the value of Credits used in placing bids in auctions and, where the bid is unsuccessful, has the effect of generating Earned Discount or reducing the Buy Now price:






  i. | a ‘price discount’ within the meaning of article 79(b), such that the consideration for Madbid's supply of the goods is the money actually paid to Madbid by the user at the time of purchasing the goods and no more; or |
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b)

if a user buys goods through the Buy Now or Earned Discount features, is the value of Credits used in placing bids in auctions and, where the bid is unsuccessful, has the effect of generating Earned Discount or reducing the Buy Now price:

i.

a ‘price discount’ within the meaning of article 79(b), such that the consideration for Madbid's supply of the goods is the money actually paid to Madbid by the user at the time of purchasing the goods and no more; or

| ii. | part of the consideration for the supply of goods, such that the consideration for Madbid's supply of goods includes both the money paid to Madbid by the user at the time of purchasing the goods and the money paid by the user for Credits used in placing unsuccessful bids in auctions; |
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ii.

part of the consideration for the supply of goods, such that the consideration for Madbid's supply of goods includes both the money paid to Madbid by the user at the time of purchasing the goods and the money paid by the user for Credits used in placing unsuccessful bids in auctions;

| c) | if a user exercises the right to buy goods after winning an online auction, is the consideration for the supply of those goods the stated auction winning price (plus shipping and handling charges) and no more, or is the value of the Credits that the winner used to bid in that auction also part of the consideration for the supply of those goods by Madbid to the user; |
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c)

if a user exercises the right to buy goods after winning an online auction, is the consideration for the supply of those goods the stated auction winning price (plus shipping and handling charges) and no more, or is the value of the Credits that the winner used to bid in that auction also part of the consideration for the supply of those goods by Madbid to the user;

or what principles should be applied in determining the answer to those questions?

| 3. | Where two Member States treat a transaction differently for the purposes of VAT, to what extent should the courts of one of those Member States take into account, when interpreting the relevant provisions of EU law and national law, the desirability of avoiding:






  a) | double taxation of the transaction; and/or |
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3.

Where two Member States treat a transaction differently for the purposes of VAT, to what extent should the courts of one of those Member States take into account, when interpreting the relevant provisions of EU law and national law, the desirability of avoiding:

a)

double taxation of the transaction; and/or

| b) | non-taxation of the transaction; |
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b)

non-taxation of the transaction;

and what bearing does the principle of fiscal neutrality have on this question?

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

OJ L 347, p. 1

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