Credits
Transactions relating to the granting and brokering of credits and the management of credits by the grantor of the credit are exempt from tax (Article 135 (1) (b) of the VAT Directive). The provisions correspond to ch. § 9 first paragraph ML where it is stated that banking and financing services are exempt from tax.
Services that consist of granting credits are covered by the exemption from tax liability. The Swedish Tax Agency considers that the term “granting of credit” also includes the takeover of a credit when a new person enters as a creditor in the credit relationship with the borrower.
Management of credits provided by the person who granted the credit is covered by the exemption from tax liability. The Swedish Tax Agency considers that the term “the person who has granted the credit” also includes the person who takes over a credit and enters as a new creditor in the credit relationship with the borrower. However, management provided by someone other than the creditor in the credit relationship or, in the case of so-called syndicated loans, by a credit agent who is not at the same time one of the lenders is not covered by the exemption. Syndicated loans refer to a special form of credit which means that several lenders merge and grant one credit. See the Swedish Tax Agency’s position Exemption from tax liability for services relating to credits as well as credit guarantees and other collateral
Credit guarantees and other collateral
The tax exemption also covers intermediation and other services relating to credit guarantees and other collateral, as well as the management of credit guarantees by the person granting credit (Article 135 (1) (c) of the VAT Directive). The provisions correspond to ch. § 9 first paragraph ML where it is stated that banking and financing services are exempt from tax.
Services relating to credit guarantees and other collateral are exempt from tax. This means that the issuance of credit guarantees and other collateral is covered by the exemption from tax liability. In this context, a credit guarantee refers to a security issued by a third party to cover a credit. Anyone who issues a credit guarantee for a fee has provided a service for a fee. Such fees may be charged as long as the warranty is not terminated. The sale of the service is exempt from tax.
Another type of security that has great similarities with credit guarantees is when a third party undertakes to secure or strengthen some form of obligation in an agreement. The Swedish Tax Agency considers that only the issuance of collateral, which by its nature is a financial transaction, is covered by the exemption from tax liability. The provision of security must therefore entail a monetary obligation to be covered by the exemption. This applies, for example, when the person exhibiting the security undertakes to ensure that payment for a good or service takes place. If, on the other hand, the undertaking consists of an obligation to provide a good or service, it is not a question of a monetary obligation. Such security is not covered by the tax exemption ( C455 / 05, Velvet & Steel Immobilien ).
Management of credit guarantees provided by the person who has granted credit is covered by the exemption from tax liability. The Swedish Tax Agency considers that when the administration is provided by someone other than the creditor in the credit relationship, the service is not covered by the exemption.
The exemption from tax liability only covers services of an administrative nature and which relate to the management of the credit guarantee. This could be, for example, registering the guarantees and monitoring their value. The Swedish Tax Agency considers that the term “the person who has granted credit” also includes the person who takes over a credit and enters as a new creditor in the credit relationship with the borrower. This means that administration provided by the person who enters as a new creditor in the credit relationship is also exempt from tax.
See the Swedish Tax Agency’s position Exemption from tax liability for services relating to credits as well as credit guarantees and other collateral .
Source: skatteverket.se
