Non Performed Contracts in European VAT in the Light of the Newest Jurisprudence of the CJEU

Sammanfattning: The European system of VAT was developed in the 1950s. The majority of transactions involved the supply of goods, and suppliers and consumers used to meet face by face. Nowadays many service providers offer the possibility to the customer, that the consumer pays before the actual service is provided. In many cases the customer does not use the right attributed from the agreement between the parties and the money is kept by the service provider. In some scenarios, there is a termination of the contract and the service is no longer provided to the final consumer. As VAT aims to be general tax, consumption is a crucial element for the taxable transactions. How does the Court of Justice of the European Union understand the consumption in the context of non-performed contracts? Should money kept by the service provider be subject to VAT? Or do such transactions fall outside the scope of VAT? The relevant VAT rules together with the Court of Justice of European Union case law are applied to analyze and get a uniform answer.