Important EU VAT developments for platforms

Aiki Kuldkepp
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Our article “Information obligation for online platforms” of 21 July 2022 provided an overview of VAT obligations of platforms and new requirements for platforms to provide information about their sellers (DAC7).

In this article, we not only take a look at the proposed EU rules for platforms, but also explain the recent EU Court of Justice (ECJ)  decision over VAT liability of platforms. We begin with an high-level overview of the existing VAT rules for platforms. 


Platforms are gaining an increasing role in the economy. The platforms connect  (underlying) sellers and buyers. These platforms are not only used to sell goods via the internet (e-commerce), but also to provide various services (a so-called ‘sharing economy’).

First, an overview is given of the VAT obligations of an online platform that facilitates sales of goods or services. Second, the recent Fenix case (C-695/20) of the ECJ is explained. Last, the article briefly looks at the new proposed VAT rules for platforms, which are supposed to become effective from 2025 if approved by the EU institutions and the member states. 

The VAT liability of platforms

Whether a platform seller or the platform facilitating the sale becomes liable for VAT, depends on the business model used by them. For example, if a platform acts in its own name when facilitating a sale of goods or provision of services to the customer, the platform is generally the one who becomes liable for the payment of VAT. In addition, a platform can become liable for VAT on the underlying sale, if it is considered to be a deemed supplier of the goods or services. 

A platform as a deemed supplier

In certain cases the EU VAT rules provide that a platform, instead of an actual seller, becomes responsible for VAT. In that case, the platform is considered a supplier of goods or services by fiction or in other words: becomes a deemed supplier. 

According to this fiction, the platform acquires the goods or services from the actual supplier and re-sells them to the customer. This fiction makes the platform responsible for VAT collection on the supply to a customer; even where  the platform is not contractually a party to that supply.

This fiction currently affects platforms which facilitate the provision of digital services or sales of goods through their platform.

Supply of digital services

The VAT Directive establishes that a taxable person who, in the context of a supply of services, acts as an intermediary in his or her own name but on behalf of another person, is presumed to be the supplier of those services and thus liable for the payment of VAT on those services. 

Article 9a of Council Implementing Regulation No 282/2011 provides that the platforms facilitating supplies of digital services are ‘presumed to be acting in their own name, but on behalf of the provider of those services’. That presumption can be rebutted where that provider is explicitly indicated as being the supplier by the taxable person and where that is apparent from the contractual agreements between the parties. Furthermore, this presumption can be rebutted only if the platform is not involved in the delivery of the service and not doing any of the following:

  • issuing the invoices or receipts to the customer;
  • setting the terms and conditions of the supply;
  • authorising the charge for the payment made by the consumer.

This means that platforms are presumed to be the suppliers of digital services, unless they do not do any of the above.

ECJ in its decision in C-695/20 confirms VAT liability of platforms

Fenix International (‘Fenix’), a company registered in the United Kingdom for VAT purposes, challenged the validity of the EU provisions making platforms liable for VAT.


Fenix operates on the internet a social media platform known as Only Fans (‘the Only Fans platform’). That platform is offered to ‘users’ throughout the world, who are divided into ‘creators’ and ‘fans’. Fenix provides not only the Only Fans platform, but also the device enabling the collection and distribution of the payments made by fans. Fenix remits those payments (minus its commission) to the creators, using a third-party payment service provider. Fenix also sets the general terms and conditions for the use of the platform.

The United Kingdom's tax authority, His Majesty's Revenue and Customs (HMRC), took the stand that Fenix had to be deemed to be acting in its own name and consequently had to pay VAT on all of the sum received from a fan and not only on the sum which it levied by way of commission. Fenix filed an appeal before a UK court. By that appeal, Fenix essentially challenged the validity of the legal basis for the tax assessments, namely a provision of an implementing regulation of the Council seeking to clarify the VAT Directive. The court hearing the case brought by Fenix referred a question for a preliminary ruling to the ECJ before the end of the transition period following Brexit, so that the ECJ remains competent to respond to that question. The referring court sought to determine  whether the contested provision is invalid in so far as the Council may have supplemented or amended the VAT Directive, thus exceeding the implementing powers conferred on it.


In its judgement, the ECJ retained that the presumption of EU VAT liability of platforms based on Article 9a of Council Implementing Regulation (EU) No 282/2011 should be considered valid. After its examination, the ECJ held that, by adopting the contested provision of the implementing regulation, the Council merely clarified the VAT Directive, without supplementing or amending it. The ECJ ruled that the Council did not exceed the limits of its implementation powers in specifying that the operator of a platform is presumed to be the supplier of the services provided. This means that a platform can be held liable for VAT due, as it is seen as a (deemed) supplier of services to a final customer.

Supply of goods

From 1 July 2021, the facilitating platforms are considered deemed suppliers if the following conditions are met:

  • non-Union goods not exceeding 150 euros are imported and shipped directly to a customer in the EU, irrespective of where the seller is established;
  • Union goods, irrespective of their value, are supplied to customers in the EU from a location in the EU, if the underlying seller is not established in the EU.
  • If a platform is considered a deemed supplier, the platform instead of an underlying supplier is liable to charge VAT from customers and to report and pay this VAT to the tax authorities. 

New rules proposed by the ViDA

The proposal of the European Commission “VAT in the Digital Age” (ViDA) of 8 December 2022 contains new VAT rules for platform economy and e-commerce. Please find a general overview of all proposed changes in our recent The European Commission proposes ambitious VAT reforms.
The ViDA proposal contains following major changes in the VAT rules for platform economy and e-commerce. 

Providing rental services and passenger transport via platforms

Platforms will be made liable for charging and remitting the VAT when they facilitate a supply of passenger transport or short-term accommodation if their underlying suppliers will not charge VAT because they are, for example, individuals acting in their private capacity (i.e. non-entrepreneurs for VAT purposes) or exempted small businesses (e.g. operating under the VAT registration threshold). 

Sale of goods via platforms (e-commerce)

E-commerce marketplaces will be responsible for the collection of VAT when they facilitate the supply of goods via their platforms. A deemed supplier rule will apply to all (both B2B and B2C; domestic and cross-border within the EU) sales of goods via platforms who facilitate those sales. This means that the facilitating platform, instead of an underlying supplier, becomes liable for VAT. As explained above, a deemed supplier provision currently only applies to B2C supplies by underlying suppliers who are not established in the EU. 

The Import One Stop Shop (IOSS) scheme will become obligatory

It will be obligatory for platforms to make use of the IOSS scheme when they facilitate low-value imports of goods to consumers in the EU. This was introduced as an optional scheme for facilitating marketplaces in July 2021. However, the platforms who exclusively facilitate domestic supplies in their MS of establishment would fall outside the scope of the measure.

Platform facilitation services

If the proposal is adopted, from 2025, the facilitation service provided by a platform will be regarded as an intermediary service. Consequently, the place of supply of the B2C facilitation services would follow that of the underlying transaction. This would bring changes in MSs who currently treat those services as electronic services for VAT purposes.

For more detailed information about proposed EU VAT rules for platform economy and e-commerce, please consult our article ViDA – new VAT rules for platform economy and e-commerce.

For more general information about other proposed EU VAT rules, please consult our article The European Commission proposes ambitious VAT reforms.


Under the current rules, platforms facilitating the sales of goods or services become liable for the payable VAT if it:

  • acts in its own name when facilitating a sale of goods or provision of services to the customer; or
  • is considered a deemed supplier under the EU VAT legislation.

The liability of platforms is further extended under the proposed ViDA rules by making them deemed suppliers when they facilitate through their marketplaces:

  • short-term accommodation or passenger transport services; or
  • sale of goods within the EU (e-commerce).

VAT rules applicable to platforms can be very complicated and we recommend to review your current and future VAT position.

Please contact your consultant for more detailed information