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ECJ – C-692/17 – Paulo Nascimento Consulting – Judgment – VAT on assignment of debt recognised in enforcement proceedings

Source Curia

The decision of the Court of Justice of the European Union (CJEU) on the Portuguese case Paulo Nascimento Consulting (Case C-692/17) recently became available. Diogo Ortigão Ramos and Mário Silva Costa of Cuatrecasas explain the details of the case and the possible consequences of the decision.


Article 135(1)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the exemption laid down by it in respect of transactions concerning the granting, negotiation or management of credit does not apply to a transaction which, for the taxable person, consists in assigning, to a third party, for consideration all the rights and obligations deriving from the taxable person’s position in enforcement proceedings for recovery of a debt recognised by a judgment, a debt the payment of which was secured by a right over immovable property awarded to that taxable person and made the subject of attachment.


Exemption for transactions relating to (negotiation of) the granting of credit – Transfer for consideration to a third party of position occupied in proceedings for enforced recovery of a claim established by law

The exemption for transactions relating to the granting of credit and the negotiation of credit, as well as the management of credit, does not apply to a transaction whereby the taxable person has all the rights and obligations attached to the position he occupies in a procedure for the enforced recovery of a debt which has been established by law and the payment of which is guaranteed by a right to a property allocated to that taxpayer and which has been seized, transfers to a third party for consideration.




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