IDT Card Services Ireland Ltd, R (on the application of) v HM Customs & Excise

IDT Card Services Ireland Ltd, R (on the application of) v HM Customs & Excise

The UK is not entitled to charge VAT on telecommunications services supplied from Ireland to UK end-users via multifunctional cards, as the place of supply under Article 9(1) of the Sixth Directive is Ireland, and there is no principle in the Directive or UK law permitting the UK to tax such supplies in these circumstances. The structure does not constitute abuse or tax avoidance under EU law, and ICSIL and Interdirect cannot be treated as the same person for VAT purposes under UK law.

Parties
Claimant: IDT Card Services Ireland Limited; Defendant: HM Customs and Excise
Jurisdiction
England and Wales
Judgment Date
21 December 2004
Procedural Posture
Judicial Review / High Court Judgment
Outcome
Application succeeds for the claimant; UK not entitled to charge VAT on the supply in question.
Legal Topics
Value Added Tax (vat), Interpretation of Directives, Tax Avoidance, Place of Supply Rules
Tax Law European Union Law Value Added Tax (vat) Interpretation of Directives Tax Avoidance Place of Supply Rules

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 19 Party arguments 2
Sign in to unlock

Parties

IDT Card Services Ireland Limited

Claimant

HM Customs and Excise

Defendant

Procedural Posture

Judicial Review / High Court Judgment

Legal Issues

  1. 1 Whether the UK is entitled to charge VAT on telecommunications services supplied from Ireland to UK end-users via multifunctional cards under Schedule 10A of the Value Added Tax Act 1994, interpreted in light of the Sixth Directive.
  2. 2 Whether the supply structure constitutes tax avoidance or abuse under EU law.
  3. 3 Whether ICSIL and Interdirect are to be treated as the same person for VAT purposes under UK law.

Ratio Decidendi

The UK is not entitled to charge VAT on telecommunications services supplied from Ireland to UK end-users via multifunctional cards, as the place of supply under Article 9(1) of the Sixth Directive is Ireland, and there is no principle in the Directive or UK law permitting the UK to tax such supplies in these circumstances. The structure does not constitute abuse or tax avoidance under EU law, and ICSIL and Interdirect cannot be treated as the same person for VAT purposes under UK law.

Court Disposition

Application succeeds for the claimant; UK not entitled to charge VAT on the supply in question.

Orders

  • Costs awarded to the claimant, to be assessed if not agreed.
  • Permission to appeal granted; time for serving Notice of Appeal extended to 31st January.