Decision of the European Court of Justice on the VAT treatment of Electric Vehicle Charging Service

November 2024

ECJ Decision in Case C-60/23

In its decision, the ECJ affirmed its earlier position that, for VAT purposes, the sale of electricity is treated as a supply of goods. The court held that, based on the economic substance of the transactions, the operators do not directly supply electricity to electric vehicle users. Instead, electricity is supplied to the end user via an intermediary—DCS, which purchases the electricity from the operator in its own name but at the user's expense (acting as a purchasing agent) and subsequently supplies it to the user. These successive supplies of electricity are taxable.

Additionally, the ECJ ruled that the provision of network access and related services by DCS to customers constitutes a separate transaction from the supply of electricity.

In a situations where a transaction comprises a bundle of elements and acts, regard must be had to all the circumstances in which that transaction takes place in order to determine, whether the transaction gives rise, for the purposes of VAT, to two or more distinct supplies or to one single supply and whether that single supply is to be regarded as a ‘supply of goods’ or a ‘supply of services’. If transaction could be considered as a single supply (i.e. additional services as indivisible from or as auxiliary services to supply of electricity) the VAT treatment of the main supply (sale of electricity) would apply to the entire transaction (see the European Court of Justice decision C 282/22).

Authors: Kätlin Klaos, Tatjana Kriisa