Prepared by Luca Ghelli, Amélie Mammone and Andrea Casalini
On April 20, 2023, the Court of Justice of the European Union issued the judgment related to the case no. C-282/22 which stated that the transactions related to the charging of electric vehicles must be qualified as supplies of goods for VAT purposes.
This decision is particularly relevant since it represents the first official EU-wide qualification of the charging transactions and puts an end to uncertainties which characterized the activities of the operators active in this business.
Prior to this decision, in fact, at an European level only the VAT Committee published working papers commenting the qualification for VAT purposes of the recharging operations of electric vehicles, upon requests of France and Italy. However, the interpretation of the VAT committee is not binding for the Member States.
The same conclusions have been somehow anticipated by the Italian Tax Authorities with the ruling reply no. 27/2023, despite some circumstances related to the background analyzed are not fully clear.
With specific reference to the reasons behind the judgment, particularly relevant are the points no. 43 and 44, where the European Court specifies that:
“43 That finding is not called in question by the fact, referred to by that court, that, in order to calculate the amount due for the recharging of an electric vehicle, account may be taken not only of the quantity of electricity transferred, but also of a fee for the standing time during that recharging. In particular, this simply means that the unit price of the goods supplied – namely electricity – comprises not only the cost of those goods as such, but also the time during which the devices provided to the users concerned are in use.
44 Nor is the finding set out in paragraph 42 of the present judgment undermined where the operator concerned calculates the price solely on the basis of the duration of the recharging session. Indeed, in view of the fact that the quantity of electricity supplied is dependent on the power transferred during that time, such a calculation is also a reflection of the unit price of that electricity”.
With reference to the main implications of the judgment under discussion, they regard mainly the operators that entered into “interoperability” agreements with local charging point operators, in order to grant to their customers/drivers the possibility to recharge their vehicle in other territories.
In fact, the place of supply for VAT purposes of the supplies of energy to the final clients will be deemed in the Member State where the recharge is carried out.
Accordingly, each operator should have a VAT registration in each country where it grants the possibility to recharge electric vehicles (through the interoperability agreements) in order to comply with the related VAT obligations triggered from the related transactions.
In this respect, as discussed by the EU institutions, the challenges arising from this scenario could be managed and simplified extending the OSS mechanism to the e-mobility sector as well. However, the implementation of this mechanism could take a very long time.
In the meantime, operators will necessarily have to adopt tools and procedures in order to properly manage the VAT compliance in a capillary manner and as efficiently as possible, considering the peculiarities of each jurisdiction with regard to VAT obligations.
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PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti