The “Free” Access to Online Platforms – Can personal data be treated as consideration from a VAT perspective?

Abstract: Nowadays, many digital platforms, such as searching engines, social networks and multiple applications serving the needs of private individuals, provide their users with free access to its resources and functions. Such generosity, together with the fact that these companies are highly capitalised, leads to the question: is there any consideration paid by the users, which the platform can subsequently convert into monetary profits? The present thesis examines the assumption that the users “pay” with their personal data for the e-services provided by platforms, which results in the taxable transaction for VAT purposes. The relevant VAT rules together with the CJEU case law are applied to analyse whether this hypothesis fits into the existing VAT system. The results of the analysis indicate that while the status of platforms and the classification of the supply in question do not pose significant difficulties, there are concerns about the expression of personal data in monetary terms. Furthermore, the real-life examples illustrate the lack of binding nature in the relationships between platforms and its users, which challenges the presence of the direct link, necessary for VAT purposes. Besides, the potential VAT taxation of such supply of e-services is discussed from the practical point of view, with the focus on the business reality of the analysed platforms as well as the nature and role of personal data in the modern economy.