Contractual penalties subject to VAT? News from the ECJ

In a recent decision (Case C-90/20, Apcoa Parking Danmark A/S, ECJ, judgment of 20.01.2022), the ECJ had to deal with the VAT treatment of a so-called "control fee", i.e. a fine (under private law) that is incurred for the use of a parking space in breach of contract. In the opinion of the ECJ, this is a consideration subject to VAT. The ECJ's decision has considerable significance beyond the specific case and may lead to a reassessment of the VAT treatment of contractual penalties.

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