Judgment of the Provincial Administrative Court of June 9, 2022 (reference number I SA / Po 866/21)
In a situation where obtaining payment from the contractor becomes extremely difficult, entrepreneurs decide to sell the receivables. The question then arises whether such sales will be subject to VAT.
This was the question that the Company asked for as part of its application for an individual interpretation. In it, it indicated that it would purchase claims against a Polish capital company (debtor) from a foreign entity in respect of the loans granted. The receivables will be purchased for a specified amount, the price of the paid assignment will be specified in the agreement for the sale of receivables and the indicated price will be lower than the market value and nominal value of the receivables. Thus, the Company will purchase receivables with a certain surplus between their purchase amount and the market and nominal value. The foreign entity from which the Company will acquire receivables is a taxpayer within the meaning of Art. 28a of the Act and has a registered office or a permanent place of business in a country within the territory of the EU – in Denmark.
Source MDDP
See also
- C-93/10 (GFKL Financial Services) – Purchases of defaulted debts at a price below their face value is not a taxable transaction/economic activity
- Roadtrip through ECJ Cases – Focus on ”Exemption – Financial transactions – Credits and transfer of Credits” (Art. 135(1)(b))
Join the Linkedin Group on ECJ VAT Cases, click HERE
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