Highlights & Insights on European Taxation (H&I) – Year 2022, no. 4

News & Media
Please find below a selection of articles published this month (March 2022) in Highlights & Insights on European Taxation (H&I), plus one freely accessible article.

Highlights & Insights on European Taxation (H&I) is a publication by Wolters Kluwer Nederland BV.

The journal offers extensive information on all recent developments in European Taxation in the area of direct taxation and state aid, VAT, customs and excises, and environmental taxes.

To subscribe to the Journal’s page, please click HERE


Year 2022, no. 4




–    Press release on ECOFIN Council’s agreement on the Carbon Border Adjustment Mechanism (CBAM)

(comments by the Editorial Board) (H&I 2022/115)

–    ECOFIN Council fails to reach political agreement on the latest draft of the EU Pillar Two Directive

(comments by the Editorial Board) (H&I 2022/114)

–    Opinion of the European Economic and Social Committee (EESC) on the proposed Unshell/ATAD 3 Directive

(comments by the Editorial Board) (H&I 2022/117)

–    Opinion of the European Economic and Social Committee (EESC) on the Commission’s Communication on Business Taxation for the 21st Century

(comments by the Editorial Board) (H&I 2022/116)


– UBS Real Estate (C-479/19)Tax advantage granted only to closed-ended real estate investment funds. EU law precludes difference in treatment. Court of Justice

(comments by Daniël Smit) (H&I 2022/84)



–    European Parliament resolution on a European Withholding Tax framework

(comments by the Editorial Board) (H&I 2022/119)


–    X-Beteiligungsgesellschaft (C-324/20)Chargeability of VAT. Service supplied on a single occasion remunerated by way of instalment payments. Court of Justice

(comments by Andrea Rottoli) (H&I 2022/112)

–    Termas Sulfurosas de Alcafache (C-513/20)VAT exemption. Thermal treatment. Amount charged for compiling an individual file including the user’s clinical history. Court of Justice

(comments by Sérgio Vasques and Mariana Rapoula) (H&I 2022/108)

–   Finanzamt A (C-515/20)Reduced VAT rate for supplies of wood for use as firewood. Concept of wood. Court of Justice

(comments by Giorgio Beretta) (H&I 2022/111)


–    Commission v UK (C-213/19)Lack of systematic customs controls by UK. Imports of textiles and footwear from China. Court of Justice

(comments by Piet Jan de Jonge) (H&I 2022/83)



–    SS’ SIA (C-175/20)Application of GDPR to tax authority information requests. Court of Justice

(comments by Edwin Thomas) (H&I 2022/81)



–    Report of the High-Level Group on post-COVID economic and social challenges

(comments by the Editorial Board) (H&I 2022/123)

–    Commission presents fiscal policy guidance for 2023   

(comments by the Editorial Board) (H&I 2022/121)

–    Commission’s Communication on the European Growth Model 

(comments by the Editorial Board) (H&I 2022/122)

–    Q&A document on the Commission’s Communication on fiscal policy guidance for 2023 

(comments by the Editorial Board) (H&I 2022/118)

–    Factsheet on the Commission’s Communication on the European Growth Model 

(comments by the Editorial Board) (H&I 2022/120)

… and much more on Highlights & Insights on European Taxation (H&I)!




–    X-Beteiligungsgesellschaft (C-324/20)Chargeability of VAT. Service supplied on a single occasion remunerated by way of instalment payments. Court of Justice

(comments by Andrea Rottoli) (H&I 2022/112)


The case in the main proceedings concerns a supply of services executed in full in 2012, for which the consideration was paid in five yearly installments as from the end of June 2013.

According to the competent tax authorities, the supply of service carried out by X should have been levied with VAT on the total amount of the consideration at the time of its execution. However, the Federal Tax Court in Germany asked the CJ to clarify if making VAT chargeable on one-time services when the supplies took place complies with the role of tax collector attributed to the supplier by the VAT Directive, if the latter agreed to be paid in several installments.

The pivotal issue raised by the referring court is linked to the fact that if the chargeability of VAT were tied to the execution of the service, X would be required to prefinance the VAT due over five years. In this respect, the Court of Justice of the European Union (‘CJ’) is asked to rule on whether the scope of Article 64(1) of the VAT Directive also encompasses a service supplied on a single occasion and remunerated by way of instalment payments.

Pursuant to Article 64(1) of the VAT Directive, supplies of services (or goods) involving successive payments or instalments payments shall be regarded as being completed on the expiry of the period to which the payment relates. In the Opinion of AG Szpunar, Article 64(1) shall not be construed as a derogation to the main rule laid down by Article 63 of the VAT Directive as regards the determination of the time in which VAT becomes chargeable (AG Szpunar 1 July 2021, C-324/20 XBeteiligungsgesellschaft, ECLI:EU:C:2021:532, para. 42).

Article 64(1) should be aimed at determining the chargeable event for those transactions where there could be a doubt if the completion of the service could be hard to be determined, in particular, because the service concerned is continuous (AG’s Opinion in X-Beteiligungsgesellschaft, C-324/20, para. 43)). However, it is worthy of note that according to part of VAT academic literature, Article 63 of the VAT Directive shall be regarded as the main rule for determining the taxable event and the chargeability of VAT (See: Ad van Doesum, Herman van Kersteren, Simon Cornielje and Frank Nellen, Fundamentals of EU VAT Law (second edition), Kluwer Law International, Alphen aan den Rijn, 2020, p. 207-208).

The relationship between Article 63 of the VAT Directive and Article 64 does not seem to be ultimately solved by the CJ in the case at issue, even if there are arguments to maintain that the first constitutes a landmark principle according to which the other provisions shall be construed. That stated, the CJ focused on how Article 64(1) should be construed and what should be meant for ‘transactions giv[ing] rise to successive … payments’. Such wording could, in principle, refer either to:

– Include one-time supplies for an agreed consideration paid in several instalments; or

– Concern only supplies of services whose nature requires payments in instalments since they are not performed on a single occasion but throughout a period on a continuative basis.

The CJ clarified that the wording of Article 64(1) of the VAT Directive suggests that, for the chargeable event of a supply of services to be linked to the expiry of the period to which an instalment payment refers, that supply of service must be spanned over a period of time. Article 64(1) implicitly requires a relationship between the nature of the service and the payment in instalments. It cannot be applied to one-time supplies for the sole fact that the consideration of the latter is paid in instalments.

Moreover, differently from Article 63 of the VAT Directive, which does not specify which event shall be considered for determining the chargeability of VAT, Article 64(1) ties the chargeable event and the chargeability of VAT to the expiry of each period to which each instalment payment refers. Article 64(1) provides for a legal fiction that allows taxpayers to link the chargeability of VAT to a specific moment without the need to investigate when the supply should be deemed as actually supplied.

Consequently, it is the opinion of the CJ that Article 64(1) of the VAT Directive can only apply if the completion time of a supply is uncertain and can give rise to potentially different interpretations. For one-time supplies, where the time in which a service is supplied can be determined precisely, the application of Article 64(1) on the ground that the consideration is paid in instalments would lead to an outcome contrary to Article 63 of the VAT Directive.

Article 64(1) cannot be turned into an optional regime for taxpayers supplying one-time supplies that is opted in or out, based on the nature of the consideration. If a Member State wishes to link the chargeability of VAT to the payment of the consideration, Article 66(1)(b) of the VAT Directive must be implemented. In such an event, VAT becomes due on a given transaction when the payment of the consideration is received. However, it is clear from the wording of the VAT Directive that Article 66(1)(b) is a derogation to Article 63 and 64, meaning that it cannot be deemed as complying with the VAT Directive an interpretation of Article 64(1) which leads to the same results of Article 66(1)(b) if the latter provision has not been implemented.

For the reasons mentioned above, the CJ concluded that Article 64(1) of the VAT Directive applies to services supplied during specific periods based on contracts that provide for obligations of a continuous nature. The fact that a taxpayer could be in the position to prefinance part of the VAT due does not change the conclusion reached by the Court. As far as the issue of prefinancing VAT is concerned, it is worth noting that the referring Court asked the CJ whether the application of VAT on the instalment payments received by X could have also been grounded on Article 90(1) of the VAT Directive.

The rationale behind the question raised by the referring Court is that, for one-time supplies of services whose consideration is paid by instalments, one may argue that a partial non-payment exists and, as such, the taxpayer has the right to reduce the tax base accordingly. However, the CJ clarified that Article 90(1) of the VAT Directive applies only to those situations where the customer fails to pay, or only pays in part, a debt it owes in full based on the contractual arrangement (CJ 2 July 2015, C-209/14 NLB Leasing, ECLI:EU:C:2015:440, para. 36 and case law cited). In this respect, the payment of the consideration according to an instalment plan cannot fall within the meaning of ‘partial non-payment’ as laid down by Article 90(1) of the VAT Directive. Indeed, the existence of an instalment plan does not affect the overall consideration that the supplier will receive for its obligations. Consequently, X should have issued an invoice for EUR 1,000,000 upon completing its service.

The outcome of the judgment would have been different in the case Germany had implemented the derogation laid down by Article 66(1)(b) of the VAT Directive, according to which, the chargeability of VAT is postponed until the consideration is received. It is worth noting that, Article 66(1)(b) refers only to the chargeability of VAT. This means that for a one-time supply of services, the taxable event must still be linked to the execution of the transaction while the cash outflow connected to the payment of VAT is postponed since the tax becomes due only at the time in which the consideration is paid. In the lack of the implementation of Article 66(1)(b) of the VAT Directive, the CJ is of the opinion that cases where the taxpayer is required to prefinance VAT to the Treasury are not contrary to the principles enshrined by the VAT Directive.

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