April 01
Dolores Utrilla
25th March 2020

CJEU to rule on the status of audiovisual media services by public television broadcasters under the VAT Directive

Publication has been made of a request for a preliminary ruling (C-21/20) made by the Administrative Court of the City of Sofia, Bulgaria (Administrativen sad Sofia-grad) on the interpretation of the VAT Directive 2006/112 when applied to the supply of audiovisual media services by public television broadcasters.

Specifically, the referring court poses four questions to the Court of Justice:

  • Firstly, whether the supply of audiovisual media services to viewers by a public television broadcaster must be regarded as a ‘service supplied for consideration’ within the meaning of Article 2(1)(c) of the VAT Directive (therefore falling within the scope of the Directive), if it is financed by the State in the form of subsidies, with the viewers paying no fees for the broadcasting.
  • Secondly, and if the first question is answered in the affirmative, whether these services can be regarded as exempt supplies for the purposes of Article 132(1)(q) of the VAT Directive. Consequently, the referring court asks whether national rules exempting this activity solely on the basis of the payment from the State budget received by the public television broadcaster, regardless of whether that activity is also of a commercial nature, are or are not permissible.
  • Thirdly, whether Article 168 of the VAT Directive precludes a practice which (i) makes a full right of input tax deduction for purchases dependent not solely on the use of the purchases (for taxable or non-taxable activity), but also on the way in which those purchases are financed (namely on the one hand from self-generated income, and on the other hand from State subsidisation), and which (ii) grants the right to full input tax deduction only for purchases financed from self-generated income and not for those financed through State subsidies, with the delimitation thereof being required.
  • Fourthly, and in the event that it is considered that the activity of the public television broadcaster consists of taxable and exempt supplies, the referring court asks, having regard to the broadcaster’s mixed financing, about the scope of the right to input tax deduction in respect of those purchases and about the criteria to be applied for the determination thereof.

The request is available here.


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