OnlyFans loses EU court tax battle

OnlyFans, an online platform largely used by sex workers, lost a top European Union court battle that will require it to pay value-added tax on the entire amount paid by a subscriber and not just on its 20 percent fee.

The Court of Justice ruled Tuesday that the platform is, in tax terms, "the supplier of services provided" under the VAT Directive even though it is acting as intermediary for another person.

It backed the U.K. tax authority His Majesty’s Revenue and Customs which had asked OnlyFans owner Fenix to pay VAT on revenue between 2017 and 2020. The U.K. court handling Fenix’s challenge asked advice from the Court of Justice during the Brexit transition period on how EU law applies to the issue. The U.K.’s first-tier tribunal tax chamber will now make final decisions on the case.

Judges said the presumption that the platform is liable for VAT on all revenue can be rebutted "where that provider is explicitly indicated as being the supplier by the taxable person and where that is apparent from the contractual agreements between the parties."

OnlyFans runs monthly subscriptions for people to sell content directly to fans. While the site also has musicians and artists selling their work, it is best known for selling sexual content.

The case is C-695/20 Fenix International.