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ARTICLE · 03 DECEMBER 2024

RHTB Case: Where VAT And Contract Law Disagree?

Loyens & Loeff
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On 28 November 2024, the Court of Justice delivered its judgment in the RHTB case (C-622/23). This judgment, eagerly awaited by tax professionals, confirmed the trend of recent years...

BelgiumTax
Bert Gevers
Bert Gevers
Ninon Van Hecke
Ninon Van Hecke
Arno Van den Bosch
Arno Van den Bosch

On 28 November 2024, the Court of Justice delivered its judgment in the RHTB case (C-622/23). This judgment, eagerly awaited by tax professionals, confirmed the trend of recent years to include contractual 'compensations' within the scope of VAT.

Facts

In March 2018, RHTB – an Austrian company – entered into a works contract for the construction of a drywall. However, after the works had commenced, the client informed RHTB that it no longer required its services and terminated the contract.

RHTB brought an action for unjustified termination before the court and sought compensation of the contractually agreed amounts from the client. After confirming the obligation to pay the termination fees, the question before the court remained whether VAT should be applied to these amounts.

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