- The CJEU clarified the VAT treatment of factoring transactions in the Kosmiro case (C-232/24).
- The Court confirmed a broad interpretation of ‘debt recovery’, limiting the scope of VAT exemptions under Article 135(1)(b) and (d) of the VAT Directive.
- The ‘financing’ component of factoring transactions is excluded from VAT exemption.
- Factoring services, including both invoice factoring and the sale of receivables, are generally subject to VAT when they involve debt recovery activities.
Source: kluwerlawonline.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.
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