The Court of Justice of the European Union (CJEU) on 22 November 2018 in case C-295/17 issued a judgment that may have great practical significance for Polish telecommunications companies (it may or may not, as described below). The judgment concerns VAT taxation of a levy calculated in connection with the unilateral termination of a contract for the provision of telecommunications services.
I. Discounts and their return
We would like to remind you that under Polish law it is possible to grant concessions to subscribers in connection with the conclusion of timely contracts and to request the return of part of them in the event of a unilateral termination of the contract. According to art. 57 clause 6 of the Telecommunications Law:In the event of concluding a contract for the provision of telecommunications services, including ensuring connection to the public telecommunications network, related to the relief granted to the subscriber, the amount of the claim for unilateral termination of the contract by the subscriber or by the service provider due to the subscriber's fault before the expiry of the period for which the contract was concluded , may not exceed the value of the discount granted to the subscriber minus its proportional value for the period from the date of the contract to the date of its termination. The claim is not due if the consumer terminates the contract before the commencement of the service, unless the subject of the discount is the telecommunications terminal equipment.
The discount is the difference between the price for the service if the contract is concluded for an indefinite period and the price for the service in connection with the conclusion of the contract for a fixed period. In the provisions of the Telecommunications Law, the legislator limited the amount of the claim of a telecommunications service provider in the event of a unilateral termination of the contract, however, it introduced a compensation claim regarding only contracts for the provision of telecommunications services.
A claim for reimbursement of a part of the relief is a special type of compensation claim, similar in nature to a contractual penalty (this is not a contractual penalty), which telecommunications service providers are entitled to only when concluding a contract with a subscriber on promotional terms, in exchange for concluding a contract for a specified period . The top-up fee differs from the conventional contractual penalty, among others premises for the creation, calculation and circle of persons concerned.
It is widely used on the market to grant subscribers discount and conclude timely contracts on promotional terms. In the event of a unilateral termination of the contract, subscribers shall be charged the equivalent of a (reduced) discount.
The amount of the top-up fee is usually not equal to the benefits lost by the operator and is closely related to the amount of concessions. The granting of concessions results from the specifics of telecommunications services and a number of factors that have an impact on telecommunications activities (it is not only about compensating benefits lost by the operator). Generally, the amount of discounts is set by the operator, but should be stipulated in the contract and result from objective criteria.
