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Flashback on ECJ Cases – C-381/09 (Gennaro Curia) – Activity of providing usury loans falls within the scope of the Sixth Directive

On July 7, 2021, the ECJ issued its decision in the case C-381/09 (Gennaro Curia).

Context: Article 104 (3), first subparagraph, of the Rules of Procedure – Sixth VAT Directive – Scope – VAT exemptions – Article 13, B, point (d), point 1 – Granting, negotiation and management of loans – Loans usurious – Illicit activity according to national law

Article in the EU VAT Directive

Article 13B(d)(1) of the Sixth EU VAT Directive (Article 135(1)(b) of 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;


  •  The Rossano office of the Agenzia delle Entrate issued against Mr Curia a corrective opinion concerning the VAT due for the fiscal year 1994. This opinion notes the omission of declarations concerning a taxable amount of 629,220,964 ITL, which represented a main tax debt of 96,844,000 ITL, which plus interest and penalties brought the total amount claimed to 255,690,000 ITL.

  • The sums which Mr Curia had not declared for VAT purposes came from usurious lending activities, which are considered unlawful under the codice penale. As a result of these activities, Mr. Curia was sentenced, in 2002, to four years of detention for usury.

  • Mr Curia brought an action against the corrigendum, arguing that the undeclared sums did not come from his commercial activity and that they were, in any event, exempt from VAT, like the financial transactions provided for in Article 10, first paragraph, point 1, of Decree No. 633.

  • Following the rejection of that appeal, Mr Curia appealed against that decision. The Commissione tributaria regionale di Calabria rejected this appeal. In particular, it ruled that the proceeds from illicit activities could not be assimilated to the income from financial activities provided for in Article 10 of Decree No. 633 so that the tax administration and the judge of first instance had properly considered entitle all bank credit balances as unreported income from taxable business activities.

  • Mr Curia lodged an appeal with the Corte suprema di cassazione against the decision rendered on appeal, reiterating that the interest received in respect of usurious loans was covered by the exemption from VAT provided for in Article 10, first paragraph, point 1, of Decree No. 633. This conclusion would be confirmed by Article 14, fourth paragraph, of Law No. 537 providing for the equal treatment of income derived from facts, acts or activities constituting either legal transactions, be illegal.

  • The referring court considers that the main applicant’s complaints alleging a contradiction between, on the one hand, the classification of a usurious loan as a service subject to VAT and, on the other hand, the interpretation of the scope of the VAT exemption provided for in Article 10, first paragraph, point 1, of Decree No. 633 are not without merit. This court notes in particular that it cannot be excluded that the usurious loan, constituting an illicit activity, is in competition with the “corresponding” lawful activity of granting money lending.


In accordance with the Community law principles set out in the Sixth VAT Directive of the neutrality of VAT and exemption from VAT, under conditions laid down by the Member States, for transactions entailing the granting and the negotiation of credit and the management of credit by the person granting it, can exorbitant lending activities, which are a criminal offence under national law, be subject to VAT where, in economic terms, they may be envisaged as being in competition with the corresponding lawful activities of granting money loans, which fall within the scope of VAT under national law but are deemed exempt thereunder whenever they may be regarded as ‘finance transactions’?

AG Opinion



Usurious lending activity, constituting an offense under national criminal law, falls, despite its unlawful nature, within the scope of the Sixth Council Directive 77/388 / EEC of 17 May 1977 on harmonization of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform base. Article 13 (B) (d) (1) of that directive must be interpreted as meaning that a Member State may not subject that activity to value added tax when the corresponding activity of granting lending money at non-excessive interest benefits from the exemption from this tax.


The activity of providing usury loans (punishable under national law), even if it is illegal, falls within the scope of the Sixth Directive.

A Member State cannot subject that activity to VAT while the corresponding activity whereby loans are provided at non-excessive interest is exempt from VAT.


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