We would like to draw your attention to the recent judgment of the Court of Justice of the EU C-282/22, where the Court considered the preliminary question of whether or not the recharging of electric cars constitutes a supply of goods or services for VAT purposes. Considering that for VAT purposes, electricity is considered to be a tangible asset, i.e. goods, and that the essence of the supply is the provision of electricity to the battery of an electric vehicle, the court assessed the recharging itself as a supply of goods. Related services, such as the provision of charging facilities, technical support or digital applications for booking connectors, etc., then constitute either the minimum provision of services necessary for the supply of electricity or an ancillary supply serving to improve the use of the main supply. As a result, all of these transactions constitute a single comprehensive transaction, which is the supply of goods.

The court’s decision itself undoubtedly complies with the provisions of the EU VAT Directive, however, it will lead to certain complications for operators in the case of e-roaming. If it were a service, the operator, which also serves its customers in other countries and usually purchases electricity for recharging from a local provider, would tax the transaction as a receipt of a service in its own country and subsequently invoice its customers with the VAT of “its” country. In the case of delivery of goods, however, the situation is more complicated, as the place of delivery will always be at the place, where recharging takes place. The local supplier will supply electricity to the operator with local VAT, or he can also use the reverse charge regime, if the operator is considered an electricity trader and the EU Member State concerned uses the reverse charge regime for these cases. In the case of e-roaming, the operator will thus be obliged to register for VAT in each country, where its customers can recharge, and invoice them for recharging with local VAT. If the customer is a taxpayer, who uses the electricity for business trips, he can then claim a VAT refund in the respective country.

However, the above will only apply, if it can be argued that the local supplier delivers the electricity to the operator, which then resells it to its customer as part of the recharging process. In this context, we would like to draw your attention to the ongoing discussions on re-fuelling using the so-called CCS cards, where it is not clear, in which situation the card issuer resells fuels to its customers and in which situation the customers refuel directly from the primary supplier (petrol station), with the card issuer providing only VAT-exempt financing.

Author: Richard Knobloch