Alert: CJEU’s decision in its case MEO – Serviços de Comunicações e Multimédia SA

Qualification of an early termination payment for the purposes of VAT

The CJEU has decided that an early termination payment made by a client to a telecom service provider must be viewed as remuneration for a VAT taxed service, rather than a payment for damages. The latter would not be subject to VAT.

This decision could affect the VAT treatment of early termination payments received by utility companies, telecom services provider and the like.

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