Lebara Ltd v Commissioners for Her Majesty’s Revenue & Customs.
Date: 2012-05-03
23. Under Article 2 of the First Directive, the principle of the common system of VAT is the application to goods and services of a gen eral tax on consumption which is exactly proportional to the price of the goods and services, whatever the number of transactions which take place in the production and distribution process before the stage at which tax is charged (see, inter alia, Case C‑475/03 Banca popolare di Cremona [2006] ECR I‑9373, paragraph 21, and Case C‑49/09 Commission  v Poland  [2010] ECR I‑10619, paragraph 44).
24. However, VAT is chargeable on each transaction only after deduction of the amount of VAT borne directly by the costs of the various price components. The procedure for deduction is so arranged that taxable persons are authorised to deduct from the VAT for which they are liable the input VAT already charged on the goods or services and that the tax is charged, at each stage, only on the added value and is ultimately borne by the final consumer (see Banca popolare di Cremona , paragraph 22, and Commission  v Poland , paragraph 44).
25. It follows that VAT is intended to tax only the final consumer and to be completely neutral as regards the taxable persons involved in the production and distribution process prior to the stage of final taxation, regardless of the number of transactions involved (see, to that effect, Case C‑427/98 Commission  v Germany [2002] ECR I‑8315, paragraph 29).
26. Moreover, it follows from point (1) of Article 2 of the Sixth Directive that it is supplies of goods or services which are subject to VAT, rather than payments made by way of consideration for such supplies (see, to that effect, Case C‑108/99 Cantor Fitzgerald International  [2001] ECR I‑7257, paragraph 17, and Case C‑419/02 BUPA Hospitals and Goldsborough Developments [2006] ECR I‑1685, paragraph 50). However, under the second subparagraph of Article 10(2) of the Sixth Directive, where a payment is to be made on account, the VAT may become chargeable without the supply having yet taken place, provided that all the relevant information concerning the chargeable event — namely, the future delivery or future performance — are already known (see BUPA Hospitals and Goldsborough Developments , paragraph 48).
27. Lastly, it is settled case‑law that a supply of services is effected ‘for consideration’ for the purposes of point (1) of Article 2 of the Sixth Directive, hence taxable, only if there is a legal relationship between the service provider and the recipient, pursuant to which there is reciprocal performance, the remuneration received by the service provider constituting the value actually given in return for the service supplied to the recipient. There must therefore be a direct link between the service supplied and the consideration received (see, inter alia, Case C‑37/08 RCI Europe  [2009] ECR I‑7533, paragraphs 24 and 30; Case C‑246/08 Commission  v Finland  [2009] ECR I‑10605, paragraphs 44 and 45, and Case C‑93/10 GFKL Financial Services  [2011] ECR I‑10791, paragraphs 18 and 19).
38. The distributor resells the phonecards in its own name and on its own behalf and, as regards at least part of that resale, also uses other intermediary operators such as wholesalers or retailers. In addition, the amount which the end user actually pays at the time of purchasing the phonecard from the distributor or from an intermediary retailer is not necessarily the same as the price paid by the distributor to the telecommunications services operator or the face value of the card, and the telecommunications services operator is not in a position to know that amount. Moreover, the identity of the end user of a phonecard is not necessarily known at the time of the payment made by the distributor to the telecommunications services operator, in particular where the card is to be resold by another intermediary operator.
43. Consequently, the answer to the first question is that point (1) of Article 2 of the Sixth Directive must be interpreted as meaning that a telecommunications services operator which offers telecommunications services consisting in selling to a distributor phonecards which display all the information necessary for making international telephone calls by means of the infrastructure provided by that operator and which are resold by the distributor, in its own name and on its own behalf, to end users, either directly or through other taxable persons such as wholesalers or retailers, carries out a supply of telecommunications services for consideration to the distributor. On the other hand, that operator does not carry out a second supply of services for consideration, this time to the end user, where that user, having purchased the phonecard, exercises the right to make telephone calls using the information on the card.