Welmory: The Service Recipient's Fixed Establishment and Place of Supply
A service recipient has a fixed establishment in another member state within Art. 44 of the VAT Directive only if that presence is characterised by a sufficient degree of permanence and a structure of human and technical resources capable of receiving the services and using them for its own economic activity. Merely using an independent company's infrastructure does not of itself suffice.
Facts
Poland's Welmory sp. z o.o. supplied services to a Cypriot company operating an auction portal; the two cooperated so closely that the Polish administration inferred a fixed establishment of the Cypriot company in Poland and sought to tax the services there. The dispute turned on whose resources — one's own or a contractual partner's — can constitute the recipient's establishment.
Legal assessment
The Court started from the rule that the primary connecting point is the recipient's place of business; a fixed establishment is an exception requiring permanence and a suitable structure of human and technical resources enabling receipt and use of the service. The criteria are assessed from the recipient's perspective, not the supplier's. Where a foreign company uses the technical and personnel infrastructure of another, legally independent person, an establishment can arise only if it has comparable command over that infrastructure as if it were its own — which the national court must verify.
Practical impact
Practically: for cross-border B2B services, obtain the customer's written confirmation of which establishment you supply (seat vs. fixed establishment), verify their VAT ID in VIES, and invoice accordingly — without tax under the reverse charge, or with the establishment state's tax. A customer's establishment is not created by merely using a contractual partner's warehouse, IT or staff; what matters is whether the customer commands those resources as its own. For ongoing contracts, refresh and file the check annually (contract, org chart, customer confirmation) — a wrong place-of-supply call risks assessments in two states at once.