Online platforms connecting users with digital content creators represent one of the fastest-growing business models in the virtual world. Users pay for access to exclusive materials behind a paywall, while the platform mediates payments, charging a commission. When a user confirms a subscription or accepts another service, and the platform collects a fee and forwards part of it to the creator, the question arises: what service does the platform provide and how should it be taxed?
Fees charged by online platforms
Fees charged by online platforms can take various forms – from transaction commissions, through subscription fees, to fees for accessing certain features or content. Determining the nature of the platform’s service has specific tax implications, particularly regarding Value Added Tax (VAT). The following business models may be encountered:
Platform acting as service provider
If the platform acts in its own name, merely utilizing the creator’s services (e.g., acquiring content or sublicensing), it is the platform that provides the service to the consumer.
The creator, meanwhile, is a subcontractor for the platform. According to Article 9a of Regulation 282/2011, if a platform enables the purchase of electronic services and mediates payments, it is presumed to be the supplier of these services unless proven otherwise.
The platform may be recognized as a VAT payer for the full value paid by the user if it:
- mediates payments (handling cards, money transfers);
- determines the terms of service (e.g., price, access, refund policy);
- technically controls the service provision (e.g., provides the transmission);
- does not clearly disclose the creator’s details to the user (the user does not know who provides the service).
The platform must demonstrate active agent behavior to avoid being considered the service provider (Art. 9a(2) Regulation 282/2011). In this model, the platform settles VAT on the entire user fee, even if most (e.g., 70-90%) is forwarded to the creator. A platform that mediates payments and controls service provision is regarded as providing the entire service, even though the creator is the formal executor (see CJEU judgment of 28 February 2023, case C695/20 Fenix International Ltd.).
If the platform settles VAT on the entire user fee and users are spread across the European Union, it must:
- settle VAT according to the rates of the country of consumption;
- register for the OSS (One Stop Shop) procedure, enabling consolidated reporting of sales to EU consumers without local registration in each country.
If the creator operates independently and settles VAT themselves, they may also be obliged to register for OSS when providing electronic services to EU consumers.
Platform acting as intermediary
In this model, the platform merely mediates the transaction, with the creator remaining the service provider to the consumer. In this scenario, the creator is responsible for issuing the invoice (if a VAT payer) and settling VAT on the entire amount received from the end-user.
The platform, in turn, charges a commission, treated as remuneration for intermediary services. The platform settles VAT on this commission (see individualtax ruling of the Director of the National Revenue Information of November 15, 2024, No. 0111-KDIB3-1.4012.535.2024.1.KO).
Importantly, the platform may be required to apply the OSS procedure if it collects payments itself and serves end customers.
Example
In more complex cases, the platform might provide technical services (hosting, access, provision of tools), while the creator provides substantive services – e.g., online meetings, lessons, consultations via video calls. The end-user registers on the platform, chooses an expert, and pays PLN 300 for a 60-minute meeting. The platform charges 20% for infrastructure, hosting, and payment processing, forwarding the remaining PLN 240 to the creator. In this model:
- the expert using the platform settles VAT on PLN 240 for the advisory service;
- the platform settles VAT on PLN 60 for access, hosting, or intermediary services to the expert.
In practice, tax authorities might challenge this division, indicating that from the user’s perspective, there’s only one service (the online meeting), which should be settled by the entity handling the entire payment and providing access (the platform). Users do not receive two separate services, but one composite service, which should be taxed collectively by one entity.
Therefore, a situation may arise where the creator settles VAT on PLN 240 (formally as the service provider), whereas tax authorities determine that the platform should also charge VAT on the entire PLN 300 as the primary service provider (according to Art. 9a Regulation 282/2011).
Summary
For services provided by platforms connecting users with content creators, a correct analysis of the business model is crucial. Platforms seemingly performing solely technical functions may be treated by tax authorities as actual service providers.
For purchasers of platform services, proper qualification of services is equally important – especially when acquired from abroad, as the place of supply for VAT purposes and settlement obligations lie with the purchaser.
