- The CJEU previously considered VAT treatment of factoring in MKG-Kraftfahrzeuge-Factoring, ruling fees as consideration for services.
- A Oy case allows the court to revisit this and consider VAT rules for quasi or trade factoring without debt purchase.
- AG suggests all factoring forms involve VATable services, with quasi or invoice factoring as a single VATable supply of debt collection services.
- The case involves a Finnish company providing two types of factoring: invoice factoring and trade factoring.
- Invoice factoring involves granting credit based on unpaid debts, with A responsible for debt collection but not acquiring debts.
- Trade factoring involves purchasing debts and transferring default risk to A.
- A charged clients factoring commission and arrangement fee, seeking a tax ruling on VAT treatment.
- Finnish tax authorities viewed fees as partly VAT exempt, but A argued all fees should be subject to VAT.
- Finnish court referred questions to CJEU on correct VAT application for factoring arrangements.
- AG opined trade factoring position is covered by previous decisions.
Source: simmons-simmons.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
