# C_2019025EN.01000801.xml

| 21.1.2019 | EN | Official Journal of the European Union | C 25/8 |
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21.1.2019

EN

Official Journal of the European Union

C 25/8

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Judgment of the Court (Fifth Chamber) of 22 November 2018 (request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD) — Portugal) — MEO — Serviços de Comunicações e Multimédia SA v Autoridade Tributária e Aduaneira

(Case C-295/17) (1)

((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’))

(2019/C 25/09)

Language of the case: Portuguese

Referring court

Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa — CAAD)

Parties to the main proceedings

Applicant: MEO — Serviços de Comunicações e Multimédia SA

Defendant: Autoridade Tributária e Aduaneira

Operative part of the judgment

| 1. | Article 2(1)(c) of 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 in the event of early termination by its client, or for a reason attributable to the latter, of a contract for the provision of services with a minimum commitment period, which amount corresponds to the amount that the operator would have received during the remainder of that period had it not been for such termination, this being a matter for the referring court to determine, must be regarded as consideration for a supply of services for consideration and, as such, must be regarded as being subject to VAT. |
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1.

Article 2(1)(c) of 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 in the event of early termination by its client, or for a reason attributable to the latter, of a contract for the provision of services with a minimum commitment period, which amount corresponds to the amount that the operator would have received during the remainder of that period had it not been for such termination, this being a matter for the referring court to determine, must be regarded as consideration for a supply of services for consideration and, as such, must be regarded as being subject to VAT.

| 2. | The fact that the objective of the lump sum is to dissuade customers from non- observance of 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 clause, are not decisive for the characterisation of the amount predetermined in the service contract which the customer is liable to pay in the event of early termination. |
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2.

The fact that the objective of the lump sum is to dissuade customers from non- observance of 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 clause, are not decisive for the characterisation of the amount predetermined in the service contract which the customer is liable to pay in the event of early termination.

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(1)  OJ C 256, 7.8.2017.

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