The Court of Justice of the European Union (CJEU) recently issued its ruling in the case of Skatteverket v. Digital Charging Solutions GmbH (C-60/23), which deals with the supply of electricity to electric vehicle charging stations, in the context of the VAT framework.
The decision deals with the framework for complex transactions involving the supply of goods (in this case, electricity) and services (such as access to the charging station network) when there is an intermediary.
Digital Charging Solutions (DCS) is a German company that provides its customers with access to a network of charging stations (in Sweden), but does not directly operate these stations, which belong to independent operators.
The question before the CJEU was whether DCS should be considered a supplier of electricity, or whether it merely facilitated access to the network, and whether the fixed monthly fee, which guarantees access to the network independent of electricity consumption, should be treated separately from the charge for energy consumption.
The CJEU ruled that, due to the structure of the contractual relationship between DCS and the charging station operators, DCS acted as an intermediary and that such a model implies that electricity is first supplied to the charging station operators and subsequently invoiced to the end customer by DCS as a supply of goods.
The fixed monthly fee charged by DCS was classified as relating to a provision of services other than the supply of electricity, since this fee is charged independently of any use of electricity and bears no relation to the amount of energy consumed by the customer.
This decision has important repercussions for the location of transactions, i.e. determining the country in which VAT is due. In this case, the decision is that VAT on the tax is due in Germany, where DCS is established, while VAT on the supply of electricity is due in Sweden. This decision reinforces the need for a careful analysis of VAT obligations for digital services and complex business models, especially those involving cross-border transactions.
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