Judgment in Case C-695/20 Fenix International

Tuesday 28th February 2023

Judgment in Cases C-695/20 Fenix International

(VAT)

Fenix International, a company registered in the United Kingdom for VAT purposes, operates a social networking platform on the Internet known as Only Fans (hereinafter the “Only Fans platform”). This platform is offered to “users” from all over the world, who are divided into “creators” and “fans”. Fenix provides not only the Only Fans platform but also the mechanism for the collection and distribution of payments made by fans. Fenix takes 20% of every payment made to a creator and charges the creator for the amount. Fenix charges VAT at a rate of 20% on the amount deducted, which appears on the invoices it issues.

HM Revenue & Customs issued tax notices to Fenix in respect of the VAT payable for a period between 2017 and 2020, taking the view that Fenix should be regarded as acting in its own right and should therefore pay VAT on the full amount received from a fan and not just on the 20% of that amount, which it was charging as remuneration. Fenix brought an action before a court in the United Kingdom. In this action, Fenix is essentially challenging the validity of the legal basis for the tax notices, namely a provision in an EU Council implementing regulation to clarify the VAT Directive. The Fenix court referred a question to the Court of Justice for a preliminary ruling before the end of the transitional period following Brexit, so that the Court still has jurisdiction to answer it. It wishes to know whether the disputed provision is invalid in so far as the Council has supplemented or amended the VAT Directive, thereby exceeding the implementing powers conferred on it.

Background Documents C-695/20