EU Court rules on VAT treatment of goods auctioned by credit provider with collateral

• The European Court of Justice ruled that auctioning goods given as collateral by a credit provider is not an additional service compared to the main service of providing credit
• The auctioning activities do not share the same VAT treatment as the main service of providing credit
• Companhia União de Crédito Popular SA provides loans secured by movable goods, with a VAT exemption for credit activities
• The Portuguese tax authority argued that sales commissions from auctions are not part of the main service of providing credit and therefore not VAT exempt
• The European Court of Justice emphasized that auctioning collateral goods is not a usual result of providing a loan with collateral
• The case was brought before the European Court of Justice by the Portuguese court after a dispute between Companhia União de Crédito Popular SA and the tax authority.

Source: taxlive.nl

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