In practice, the distinction between payment for damages and remuneration for a supply plays a recurring role. The ECJ recently ruled on this question in the case of Vodafone Portugal. In this ruling, the ECJ found that amounts paid by customers to their contractual partners in the event of premature termination of a contract, are subject to VAT. This ruling is significant for all companies which conclude contracts with a predetermined minimum period. However, as the German VAT Circular has, so far, taken a different view, the decision is likely to only have implications for the future.