Geelen (Case C-568/17): What VAT if the ‘Unity of Action, Time and Place’ Is Broken Up?

Abstract

On 8 May 2019, the Court of Justice of the European Union (CJEU) released its decision in the Geelen case, C-568/17 (NL: CJEU, 8 May 2019, Case C-568/17, Geelen, ECLI:EU:C:2019:388). In this case, the CJEU ruled that a complex service that consists of offering interactive sessions of an erotic nature that are filmed and broadcast live on the Internet constitutes an ‘entertainment activity’ and must be considered as being ‘physically carried out’ within the meaning of Article 52(a) of the Value Added Tax (VAT) Directive (Council Directive 2006/112/EC of 28 November 2006 on the Common System of Value Added Tax (with subsequent amendments), OJ L 347/1 (11 December 2006)) (as of 1 January 2011, Article 54(1) of the VAT Directive) in the place where the service provider has established his place of business. The decision in Geelen is remarkable in that it shows that even services such as those relating to entertainment activities that, in the past, required the simultaneous physical presence of the supplier and the customer so that there was an obvious ‘unity of action, time and place’ (NL: Opinion Advocate General Szpunar, 12 February 2019, Case C-568/17, Geelen, ECLI:EU:C:2019:109, paragraph 17 (authors’ unofficial translation), recalling the three ‘Aristotelian’ or ‘classical’ unites of drama) can now be provided from a distance so that this unity is eventually broken up and, hence, assessing VAT has become much less straightforward. This note will attempt to elucidate this issue.