- The VAT treatment of payment processing services has been controversial and litigated.
- The main question is whether these services fall within the exemption for transactions concerning payments.
- The journey of litigation started in 1997 with the ECJ judgment in Sparekassernes Datacentre (‘SDC’ Case C-2/95).
- In 2000, FDR supplied credit card services and the Court of Appeal ruled that the services were exempt.
- In 2010, Axa Denplan operated a dental payment plan that was held taxable as debt-collection.
- In 2016, both Bookit and NEC charged card handling fees and the CJEU concluded that the service consisted of a taxable exchange of information.
- In 2018, DPAS did not qualify for exemption as it did not effect the legal and financial changes.
- In 2023, the Supreme Court ruled that the exemption must have a narrow interpretation and the services must have the effect of transferring funds and causing a change in legal and financial situation.
Source: mha.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
