European Union: Issued CJEU Preliminary Ruling on Implementing Regulation of Taxation Rules for Online Platforms Operators (Fenix International v HMRC)

On 28 February 2023, the Court of Justice of the European Union (CJEU) issued a preliminary ruling in the matter of Fenix International v HMRC (Case C-695/20) that the Council of the European Union did not exceed its authority when it specified that online platform operators are assumed to be the suppliers of the services they offer assuming that they are able to unilaterally determine essential conditions of supply of services. In the referred case, HMRC argued that, following the Council's Implementing Regulation, Fenix International, who operate the content creator platform Only Fans, should be required to pay VAT on the entire sum received from a fan rather than just the 20% levy that Fenix charges creators. The CJEU determined that the Council's implementation of this regulation did not alter or expand the VAT Directive, but merely clarified it. As a result, the CJEU found no grounds for invalidating the regulation's contested provision.