Spain: Services supplied by agent for performing artists, transactions subject to VAT (CJEU judgment)

A CJEU judgment concerning transactions subject to VAT for performing artists.

A CJEU judgment concerning transactions subject to VAT for performing artists.

The Court of Justice of the European Union today issued a judgment holding that when an agent for performing artists attempts to conceal income from such services and transactions, the taxable amounts paid are regarded as including value added tax (VAT).

According to the CJEU, for purposes of determining the VAT liability for concealed transactions, the amounts paid and received (as reconstituted by the tax authority) must be regarded as already including VAT, and any other interpretation would be contrary to the principle of VAT neutrality.

The case is: CB v. Tribunal Económico Administrativo Regional de Galicia (C-521/19, 1 July 2021)


According to a CJEU release [PDF 241 KB], an agent responsible for managing performers and orchestras for patron saint feast days and village festivals in Galicia (Spain) would negotiate performances by orchestras with the municipal festival committees. The festival committees paid in cash, and there were no invoices. These payments were not declared to the tax authority for corporate tax or VAT purposes. The agent would receive 10% of this income. Payments to the agent were also made in cash, with no invoices, and were not declared. Since the agent did not issue invoices, he did not complete VAT returns.

The tax authority asserted the amounts received by the agent as remuneration (approximately €65,000 in 2010, €67,500 in 2011 and €61,000 in 2012) did not include VAT and that the tax base for income tax purposes also was subject to VAT assessments. 

The agent disagreed and asserted that application of VAT to the amounts which the tax authority treated as income was contrary to the case law of the Tribunal Supremo (Supreme Court, Spain) and of the CJEU. It was contended that when there are transactions subject to VAT—but VAT was not declared or invoiced—then the amount of VAT must be regarded as having been included in the transaction price agreed upon by the parties. In other words, VAT was included in the price of the services provided.

The Spanish court (Tribunal Superior de Justicia de Galicia) referred the case to the CJEU for an interpretation of the VAT Directive provisions relating to the determination of the taxable amount of a transaction between taxable persons for VAT purposes in such instances when invoices were not issued and there were no returns filed reporting the income. The Spanish court asked whether the amounts paid and received must be regarded as already including VAT.

The CJEU in today's judgment, held that under these circumstances, the amounts paid and received for the transactions must be regarded as a price already including VAT, unless under national law, it would be possible for the taxable persons to subsequently pass on and deduct the VAT at issue (notwithstanding the fraud).


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