ECJ C-250/21 (O. Fundusz lnwestycyjny zamknięty reprezentowany przez O) – AG Opinion – Exemption for the granting of credits apply does not apply to sub-participation agreements

On May 12, 2022, the ECJ issued the AG Opinion in the case C-250/21 (O. Fundusz lnwestycyjny zamknięty reprezentowany przez O).

Context: Reference for a preliminary ruling – Value added tax (VAT) – Directive 2006/112/EC – Article 2(1)(c) – Taxation of the services for consideration – Direct link between the services supplied and the consideration received by the taxable person – Article 135(1)(b) – Exemption for the ‘granting … of credit’ – Synthetic securitisation – Sub-participation agreement

Article in the EU VAT directive 2006/112/EC

Article 135(1)(b) of the EU VAT Directive 2006/112/EC

Article 135 (Exemption)
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 Applicant is a non-standardized securitization fund and is considering entering into sub-participation agreements with banks or other securitization funds in the future, whereby he would act as a sub-participant. The originator of a sub-participation hereby undertakes to transfer all income from the claims specified in this agreement to its co-contractor (the sub-participant).
  • Already at the conclusion of the agreement, the originator receives a compensation from the co-contracting party to improve its liquidity. In addition, the claims that are the subject of the sub-participation (for example, claims from loan agreements) remain in the hands of the originator. According to the applicant, the transactions described should be exempt from VAT. 
  • The applicant considers that securitization services, and in this context also sub-shareholdings, should be regarded from an economic point of view as financial instruments comparable to credits or loans, which are exempt from VAT.
  • In his individual interpretation, the minister has ruled that the position taken by the applicant is incorrect. The services concerned cannot be classified as exempt services. Consequently, the Minister has determined that the services provided by the applicant in the context of the sub-participation agreement must be taxed at the basic rate of 23% applicable to VAT.
  • On the appeal of the applicant, the administrative court of first instance annulled the individual interpretation by judgment of 25-05-2017. In short, this court ruled that sub-participation agreements must be considered to fall within the scope of the exemption, as they have the same purpose as loan agreements and include the main aspects thereof.
  • The Minister lodged an appeal in cassation with the referring court and referred to a different decision of the administrative court in a case with facts very similar to those of the present case.


The referring court takes the view that the resolution of the appeal in cassation requires the Court to answer the question of the interpretation and method of application of Article 135(1)b) of the VAT Directive. Since the case-law of the national courts is not uniform and the substantive issue must be settled uniformly in the European Union for VAT purposes, the referring court considered it necessary to refer a question to the Court for a preliminary ruling.



Is Article 135(1)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1, as amended) so be interpreted as meaning that the exemption provided for in that provision for the granting of credits, the intermediation of credits or the management of credits applies to the sub-participation agreement described in the main proceedings?

AG Opinion

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 which it lays down for transactions relating to the granting, negotiation and management of credit does not apply to the supply of services provided under the sub-participation agreement at issue in the main proceedings, whereby the sub-participant agrees to pay to the originator an upfront amount in return for obtaining throughout the duration of that agreement the proceeds of the receivables of the principal loan granted to the principal debtor, since point (b) does not cover the credit risk transferred by the originator to the sub-participant, which, subject to verification by the referring court, is an essential part of that transaction.


Similar ECJ Cases



VAT news


  • VAT news
  • VAT News
  • VAT news
  • VAT news
  • VAT news