In Case C-60/23, Digital Charging Solutions, the Supreme Administrative Court of Sweden (Högsta förvaltningsdomstolen) has asked the Court of Justice of the European Union to clarity the VAT Directive on links in the supply of electricity to charge an electric car at a charging point. Recently, Advocate General Ćapeta delivered her Opinion.
The applicant before the referring court in this case is a German company (not established in Sweden) that offers consumers access to a network of charging points for electric vehicles. It does not operate the charging points itself, but rather, enters into contracts with charge-point operators.
It is challenging a decision of the issued by the Swedish revenue board (Skatterättsnämnden), which had decided that the supply made by the applicant constituted a complex transaction principally characterised by ‘the delivery of electricity to users and that the place of delivery was to be regarded as being in Sweden’. The Swedish tax authority (Skatteverket) agreed with this decision.
Digital Charging Solutions, however, disagreed. For it, there was two separate issues here. First, the ‘supply’ of electricity, and second, the ‘supply’ of a service (access to the network of charging point). Thus, the company was of the view that only the supply of the electricity, the former, was to be taxed in Sweden.
This case falls, on the basic of the facts therein, on a needed interpretation of the appropriate provision of the VAT Directive (Directive 2006/112/EC).
Whilst analysing the various lines of technical case-law here under EU VAT law, Advocate General Ćapeta argued that two potential models sit the situation at hand.
First is the ‘buy and sell model’. For her, this is
‘implies successive sales…[and]…requires recourse to the fiction that the right to dispose of electricity as owner was transferred from the [charging point operatiors] to [Digital Charging Solutions], which enables the latter to then sell the goods at issue.’ (para. 50).
Second however, she found the ‘commissionaire model’ to be also suited to present case. This is where a transaction involves an agent as the intermediary between a consumer and charge-point operators, noting that there are two types within this model: a ‘sales commissionaire model’ and a ‘purchase commissionaire model’.
In finding that Digital Charging Solutions was engaging in a ‘purchase commissionaire model’, she stated that,
‘it appears that both conditions – the presence of agency and the identity of supplies – are fulfilled in the circumstances of the present case and, consequently, the transactions at issue fit…[that]…model‘. (para. 69).
Given that two models were thus available, she then had to ponder which model applied. For her, she concluded that,
‘for the business model such as the one in the present case, the commissionaire model as described in Article 14(2)(c) of the VAT Directive is the most suitable VAT treatment.’ (para. 73).
Therefore, she proposed to the Court that it respond to the Supreme Administrative Court of Sweden that Article 14(2)(c) of the VAT Directive applies to the case at hand, and that reading the VAT Directive as a whole, means that,
‘it must be interpreted as meaning that the recharging of an EV at a network of charging points to which a user has access by means of a subscription concluded with a company other than the CPO implies that the electricity consumed is delivered from that operator to that user, and the company offering access to those charging points acts, in that supply, as a commissionaire within the meaning of Article 14(2)(c) of that directive.’
Article 14(2)(c) of the VAT Directive states that,
‘the transfer of goods pursuant to a contract under which commission is payable on purchase or sale.‘
The Opinion of Advocate General Ćapeta in Case C-60/23, Digital Charging Solutions is available here.