OnlyFans should pay UK VAT on full amount paid by subscribers, EU court adviser says

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BRUSSELS, Sept 15 (Reuters) – OnlyFans, an online platform known for adult content, should pay UK value added tax (VAT) on the full amount paid by subscribers, not just a discounted sum, in line with EU VAT rules for online platforms, an EU court adviser said on Thursday.

Founded in 2016 and with more than 100 million users, OnlyFans flourished during the pandemic as a way for creators to earn money by selling content directly to paying subscribers.

OnlyFans operator Fenix took its grievance to a UK tribunal after UK tax authorities ordered it to pay VAT on all the money paid by fans and not just the amount minus 20% paid to creators.

The tribunal subsequently sought advice from the Court of Justice of the European Union (CJEU), Europe’s highest. The request was made before Britain withdrew from the European Union in 2020.

CJEU Advocate General Athanasios Rantos said the court should confirm that the VAT rules apply to OnlyFans.

“The provision of the regulation implementing the VAT Directive providing that an online intermediary platform is, in principle, liable to pay VAT is valid,” he said in a non-binding opinion.

“The relevant provision of the VAT Directive does not contain any restrictions as to its scope or its extent. Accordingly, no category of services is excluded from the substantive scope of that provision,” he said.

The CJEU, which follows such advice in four out of five cases, will rule in the coming months.

The case is C-695/20 Fenix International.

(Reporting by Foo Yun CheeEditing by Mark Potter)

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