Subjection to VAT of the payment of fees applicable to the recording and reproduction devices of works protected by copyright. Judgment of the ECJ of January 18, 2017. SWAP


In the present case, the Court of Justice of the European Union (ECJ) is asked about the VAT applicable to the fee payable over recording and reproducing devices of works protected by copyright or benefits protected by rights related to copyright and the supports used to fix such works or services.

The question arises as a result of a consultation submitted by SWAP (a collective rights management organization) to the Tax Administration in Poland as regard the subjection to VAT of the fees paid by the producers and importers of these devices, which affirmative answer was appealed to the Court in order to request the cancelation of that opinion. Having considered this claim, the Administration appealed to the next court, which referred the following question to the ECJ: “Do authors, performers and other rightholders supply services, within the meaning of Articles 24(1) and 25(a) of the VAT Directive, to producers and importers of audio recorders and other similar devices and of blank media on whom collective management organisations levy on behalf of those authors, performers and other rightholders, but in their own name, fees on those devices and media by virtue of their sale?”.

The ECJ provides that, without prejudice to assessing whether the aforementioned transaction may constitute a transfer of an intangible asset and, therefore, be classified as a service provision for VAT purposes, it must first be assessed whether the transaction is carried out for consideration, because only in such case will be a transaction subject to VAT. In that regard, based in the Court’s own case-law, it recalls that a provision of services is provided for consideration “only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient”, which occurs if there is a direct link between the service and the consideration received.

In the present case, such conditions do not exist because there is no legal relationship between the authors or the collecting organization and importers since the obligation to pay this fee is established by law, nor does such payment constitute a direct consideration of the service as far as this is a payment linked to the damage caused to the rightholders by the reproduction of their works without authorization. Therefore, since this transaction is not carried out for consideration, it is not subject to VAT.

A copy of Judgment C-37/16 is attached.

Click here if you want more information about our VAT services or you can contact us at

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

Not readable? Change text. captcha txt
Logotipo de Diligens Tax ConsultingLogotipo de Diligens Tax Consulting