{"id":3983,"date":"2026-02-23T12:21:10","date_gmt":"2026-02-23T11:21:10","guid":{"rendered":"https:\/\/pkf.hu\/?p=3983"},"modified":"2026-02-23T12:21:10","modified_gmt":"2026-02-23T11:21:10","slug":"vat-treatment-of-penalty-payments-cjeu","status":"publish","type":"post","link":"https:\/\/pkf.hu\/en\/2026\/02\/23\/vat-treatment-of-penalty-payments-cjeu\/","title":{"rendered":"CJEU Rules on VAT Treatment of Penalty Payments and Triple Royalties"},"content":{"rendered":"<p style=\"font-weight: 400;\"><strong>T\u2011643\/24. \u2013 Cristian General Serv SRL<\/strong><\/p>\n<p style=\"font-weight: 400;\"><em>The CJEU\u2019s recently published judgment provides another instructive example that payment obligations of a \u201cpenalty\u201d nature may also form part of the VAT taxable amount where they are linked to a service that has been supplied and received.<\/em><\/p>\n<p style=\"font-weight: 400;\">In a hotel located in Romania, music protected by copyright was played without the operator having obtained prior authorisation for such use or having paid the corresponding royalties. As a result, the national collective management organisation imposed on the hotel operator a charge amounting to three times the royalty that would have been payable in the event of authorised use. Although the principal subject matter of the dispute concerned the claim of the collective management organisation, the Bucharest Court of Appeal also raised the question whether VAT should be charged on the tripled royalty claim or whether the amount should be treated as compensation falling outside the scope of VAT.<\/p>\n<p style=\"font-weight: 400;\">The Court of Justice of the European Union drew a parallel with Case C-90\/20, Apcoa Parking Danmark, in which the Court held that a surcharge payable by a motorist for the irregular use of a car park constituted consideration subject to VAT. The Court concluded that the collective management organisation supplies a service to the user by granting authorisation for the use of the protected work in return for the royalty collected. This conclusion is not affected by the fact that the involvement of the collective management organisation is mandated by law, nor by the circumstance that the author of the work was unable to prevent the unauthorised use. Accordingly, there exists a direct link between the use of the work and the fee payable to the collective management organisation. The same reasoning applies in the case of unauthorised use: the user has likewise availed itself of the service, the only difference being the amount of the royalty payable. Consequently, the full amount of the tripled royalty due in respect of unauthorised use constitutes the taxable amount for VAT purposes.<\/p>\n<p style=\"font-weight: 400;\"><a href=\"https:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=CELEX:62024TJ0643\">Full English text of the judgement<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>T\u2011643\/24. \u2013 Cristian General Serv SRL The CJEU\u2019s recently published [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":3982,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[685],"tags":[802,965,688,840,784,693],"class_list":["post-3983","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecj-judgments","tag-cjeu","tag-copyright","tag-ecj-en-2","tag-ecj-judgement","tag-ecj-rule","tag-vat-en-2"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - 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