Supplies of goods to customers fraudulently using a bank card are subject to VAT where the card provider pays for those goods
By Michael Cant
The Court of Justice of the European Union (CJEU) has ruled in the case of Dixons Retail plc v Commissioners (C-494/12) that a supplier must account for output VAT on payments received from third-party card providers for supplies made to customers who bought goods using a fraudulent card.
It should be noted that this decision: turned on the specific facts of the case — in particular the fact that Dixons had agreements with card issuers under which the issuers agreed to pay Dixons for all transactions made with their cards, provided Dixons followed set procedures; means retailers will not be able to recover any output VAT already accounted for in respect of payments received from card providers for goods bought using fraudulent cards; and does not come as a big surprise given the decisions in Loyalty Management UK and Redrow Group, which held that payment by a third party to a supplier for goods or services supplied to a customer could amount to ‘third-party consideration’ for VAT purposes…
Click on the link below to read the rest of the Nabarro briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Analysis from The Lawyer
Nabarro senior partner and self-confessed “IT geek” Graham Stedman is heralding a major set of investments in technology ahead of the firm’s move to 125 London Wall this year.
Clients are more willing to bring claims against professional service providers but the risk to defendants is not as dramatic as it might seem