A bank securitised loans by entering into a sub-participation agreement with an investment fund (O. Fundusz). Under the agreement, the fund paid the bank a lump sum, and in return the bank would channel any amounts collected from borrowers to the fund. The agreement did not involve any assignment of the loans, and the fund was not entitled to pursue the borrowers for loan repayments. In the Opinion of AG Laila Medina, the agreement involved the advance of a capital amount, which was an essential component of a VAT-exempt grant of credit.
Source Deloitte
