The CJEU delivered its judgment on 27 October 2022 in the case of Climate Corporation Emissions Trading GmbH (“Climate Corporation”) v Finanzamt Österreich C‑641/21. The tax office in Austria imposed VAT on transactions carried out by Climate Corporation that comprised the transfer of greenhouse gas emission allowances. The case dealt with the place-of-supply rules for services under Article 44 and whether those rules could be changed in circumstances involving VAT avoidance. Article 44 of the EU VAT Directive provides the general rule in relation to supplies of services between businesses and stipulates that the place of supply is the place where the recipient is established/has a fixed establishment/has his/her permanent address or usually resides. In line with the recitals of Directive 2008/08, the place of supply of services should, in principle, be where the actual consumption occurs, and in the case of business-to-business supplies it should be where the recipient is established.
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