Recently, the Court of Justice of the European Union (CJEU) has ruled that the term "supply of services" includes subscription contracts for the supply of consulting services from an EU VAT perspective.


Asparuhovo Lake Investment Company OOD (ALIC) is a Bulgarian company whose business is mainly concerned with agriculture and related activities. ALIC entered into subscription contracts regarding consulting services with four other companies ("service providers"), for the provision of services relating to corporate finance, commercial development, legal advice and information security. The four service providers assured ALIC that they did not enter into comparable contracts with competitors of ALIC. ALIC paid these service providers on a weekly basis in the form of a lump sum and deducted the input VAT in this regard.

After a tax inspection, the Bulgarian Tax Authorities imposed an additional tax assessment, considering the fact that ALIC deducted input VAT on the provided services of its service providers.

The Bulgarian Tax Authorities took the view that no proof had been provided as to the type, quantity and nature of the services actually provided and that no information had been given on how service prices had been set.

The referring court states that it nevertheless has doubts as to whether a subscription contract may constitute a "supply of services" or whether only the supply of specific consulting services may constitute such a supply and give rise to the right to deduct VAT. In the first case, the referring court also asks when the taxable event and the chargeability of the tax take place.


The CJEU states that the term "supply of services" includes subscription contracts for the supply of consulting services to an undertaking, in particular those of a legal, commercial or financial nature, under which a supplier has agreed to be available to the customer during the term of the contract. This is irrespective of the amount of time and work provided by the service provider. Referred to was the Kennemer Golf case where the mere permanent availability of the service provider is an important element of the service itself.

In addition, the chargeable event and the chargeability of the tax occur upon the expiration date of the period in respect of which the payment has been agreed, irrespective of whether and how often the customer has actually made use of the supplier's services.