ECJ Rules on VAT Treatment for Electric Vehicle Charging

The Court of Justice of the European Union (CJEU) recently issued a significant ruling concerning the VAT treatment of electric vehicle (EV) charging services provided via charging networks. The judgment, delivered on October 17, 2024, in the case Skatteverket and Digital Charging Solutions GmbH (C-60/23), clarifies the VAT qualification of these services, particularly in situations involving multiple parties.

Case Overview

The case involved a German company providing Swedish customers access to a network of EV charging points. This access was facilitated through a mobile app and a dedicated card, while the charging points themselves were owned and operated by third-party providers under separate agreements with the company.

The Court's analysis addressed two primary questions:

1. Whether the supply of electricity at charging points constitutes a "supply of goods" under VAT law.
2. The nature of the transaction from a VAT perspective.

ECJ Conclusions on Digital Charging Case

The CJEU confirmed that the provision of electricity to recharge EVs at public charging points qualifies as a "supply of goods" (Article 14(1) of the EU VAT Directive). The transfer of electricity to a vehicle's battery therefore constitutes a supply of goods.

The Court also examined the legal and economic structure of the transaction, classifying it as a commission contract. Key considerations included:

• The agent must act on behalf of the principal in the supply of goods.

• The goods acquired by the agent and those supplied to the principal must be identical.

This structure led the Court to conclude that the intermediary (Digital Charging) operates as an agent in its own name but on behalf of the principal, the final users, even if they choose the quantity, time and place of that charging as well as the manner of use of the electricity. Therefore, Digital Charging activity fits the definition of a commission contract under Article 14(2)(c) of Directive 2006/112.

Finally, the Court's interpretation on whether the supply of electricity and access to the charging points network, constitute a single complex transaction or separate supplies depends on the economic reality reflected in the contractual agreements. In this regard, it is reminded that although each transaction must normally be regarded as distinct and independent, a transaction which comprises a single supply from an economic point of view should not be artificially split. In this case, the Court concluded that there is a single complex transaction, where the services provided by Digital Charging are considered to be indissociable from the supply of electricity or merely accessory thereto.

In conclusion, the ECJ's ruling provides valuable clarity for the e-mobility sector, particularly for businesses offering EV charging services through multi-operator networks. Key takeaways include:

• The charging of an electric vehicle at a network of public charging points to which the user has access through a subscription concluded with a company other than the operator of that network entails a commission contract.
• Ancillary services may either form part of a single transaction or be treated as separate supplies based on how they are offered and charged.

This decision underscores the importance of carefully structuring contractual and operational arrangements to align with VAT requirements.

How Can Marosa Help E-mobility Businesses?

Marosa’s services bring benefits to this type of business. Where multiple VAT registrations abroad must be kept, Marosa’s VAT compliance solutions empower businesses to manage filing requirements across various jurisdictions, ensuring timely and accurate filings. Also, we act as a source of knowledge so you can stay up to date with VAT rate changes or new requirements in the countries of registration.