General Court Case T-657/24 (Versãofast) – Questions – VAT Exemption for Credit Intermediation

Facts and questions have been released in the General Court case T-657/24 (Versãofast).

Summary

The applicant, providing intermediary services for Caixa Geral de Depósitos, seeks a VAT refund but faces corrections after the tax authorities found improper deductions in 2019 and 2023. The national court questions whether the applicant’s services qualify as “credit intermediation” under Article 135(1)(b) of the VAT Directive, particularly regarding the scope of “negotiation of credit.” The court seeks clarification on the applicability of this exemption to services that assist potential mortgage customers without mediating transaction terms or acting on behalf of the bank.

Relevant article in the EU VAT Directive 2006/112/EC

Article 135
1. Member States shall exempt the following transactions:
(b) the granting and the negotiation of credit and the management of credit by the person granting it;

Facts & Background

The applicant provides intermediary services for the credit institution ‘Caixa Geral de Depósitos’ (hereinafter: CGD), and its services consist of notifying and explaining information mortgage loans from the bank to potential customers. Requesting party has requested a refund of VAT in the regular tax return after which the tax authorities carried out an inspection. On on the basis of that verification, it was established that the applicant had wrongly deducted VAT in the years 2019 and 2023, and the The Tax and Customs Administration then drew up a number of corrections.

Pursuant to Article 135(1)(b) of the Treaty on the VAT Directive, Member States exempt, inter alia, the granting of credit and the negotiation of credit. The national court has doubts as to the meaning and scope of the the concept of ‘credit intermediation’, and in particular whether the services (as an intermediary between purchasers of mortgage loans and CGD) fall within this definition, as the For example, the applicant does not mediate on the terms of the transaction.

Questions

(1) Is Article 135(1)(b) of the Sixth Regulation VAT Directive, as regards the concept of ‘negotiation of credits’, applicable to services provided by customers for a credit institution mortgage loans are recruited by a taxpayer, who is a related credit intermediary who is established and operates in accordance with the legislation on the access to and exercise of the activity of credit intermediary, where those services cumulatively provide the following (a) proactively searching for potential customers for mortgage loans through a real estate intermediation network (REMAX); (b) making available to potential customers of information prospectuses provided by the bank containing financial information on the mortgage credit products; (c) assisting these potential customers in identifying the documentation needed to create a credit offer, as well as in the preparation and preparation of the checking that documentation; (d) the transmission of the request for quotation to the bank; (e) receiving the replies of the bank; (f) the drawing up of comparative tables of the different banks, and the organisation of meetings with potential customers to discuss the conditions and essential aspects of financing (such as spreads, annual percentage of cost, the effort ratio) and to assess the clarify; (g) the communication of the Bank’s decision to the potential customer, and (h) a remuneration model based on a ‘success fee” (success commission), where the consideration is payable only to the when a credit agreement is actually concluded and where the amount of that consideration depends on the volume of in loans closed/mediated?

(2) Does the classification ‘negotiation of credit’ also apply to where the intermediary is not authorised to act on behalf of the bank and has no effect on the determination of the conditions laid down in the prospectuses and credit offers, and the potential borrower is free to decide whether or not to grant the financing to the and to choose the institution with which he will conclude the contract?

Source

Cited ECJ Cases