Comments on ECJ Case T-184/25: VAT Exemption Likely Denied for Securitised Loan Management

• Advocate General Brkan opined that credit management services provided by the originator after transferring loans to a securitisation vehicle are not VAT-exempt under the EU VAT Directive.
• If the EU General Court follows this opinion, SPVs in securitisation or covered bond transactions will likely face irrecoverable VAT costs on credit management services, as they cannot deduct input VAT.
• Organisations involved in loan securitisation should review their arrangements and assess potential VAT impacts.
• This is an Advocate General’s opinion, not a binding judgment, but the EU General Court often follows such opinions.
• The case arose from a Finnish bank’s practice of selling loans to a subsidiary while continuing to manage them, with the VAT exemption for such management now in question.

Source: pwc.nl

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.

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