A telecommunications service provider renders mobile telecommunication services to end-users via a prepaid system. In this regard, the telco issues top-up vouchers, which it sells to distributors for an amount under the face value of the voucher. The distributors in turn sell the vouchers to end-users. The top-up vouchers qualify as so-called multipurpose vouchers under Dutch VAT law.
The matter of dispute is the taxable amount; the telco pleads for the amount it actually receives from its distributors (i.e., the face value minus the discount), whilst the tax inspector argues that the taxable amount is equal to the face value of the vouchers.
The Lower Court and the Court of Appeal both ruled in favor of the telco. According to the Dutch Supreme Court, the taxable amount is equal to the amount the telco actually receives from its distributers, provided that there is no direct link between the telecommunication services provided by the telco to the end-user and the amount which the end-user pays to the distributor for the voucher. The Dutch Supreme Court refers the matter to another Court of Appeal to examine the legal relationships between the telco and its distributors; the telco and the end-users and between the distributors and the end-users. Important in this case, is in which capacity the distributor sells the vouchers to the end-user (e.g., as an agent or in its own name and for its own risk and account).