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Comments on ECJ C-250/21: VAT exemption for financial services based on the sub-participation agreement

  • The European Court of Justice (ECJ) recently ruled on a case involving the application of VAT exemption for financial services.
  • The case concerned Fund O, which planned to enter into agreements with banks or other investment funds.
  • The agreements involved the transfer of revenue from receivables to Fund O, up to a specified financial sum.
  • The difference between the amount paid to the originator and the amount received by Fund O represented Fund O’s reward.
  • Fund O sought a tax opinion to confirm VAT exemption for the services, but the Ministry of Finance rejected the exemption.
  • The case reached the ECJ, which determined that the services provided by Fund O fell under the concept of credit provision exempt from VAT.

Source Accace

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