Comments on ECJ C-89/23 – New referral – sale of pledged goods – whether sale and commission are exempt

• Taxpayer grants secured loans using items such as gold, silver, and watches as collateral.
• If borrowers default, the pledged items are sold through a competitive bidding process, and the taxpayer always wins by bidding more than the outstanding loan value.
• The taxpayer then sells the goods and charges an 11% sales commission to compensate for expenses related to organizing and completing the sale.
• The tax authority questions whether the commission falls under the VAT Directive exemption, while the taxpayer argues that it is exempt as a service ancillary to credit granting.

Source KPMG

See also

• ECJ Case C-89/23 (Companhia União de Crédito Popular) – Questions – Whether the commission which the law grants to the lender for the sale at auction of pledged goods may be regarded as an ancillary service to the principal service

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