Advocate General: VAT Exemption for Credit Management Applies Only to Current, Not Original, Lender

• The Advocate General opines that after a credit portfolio is transferred, the original bank’s servicing fee is not exempt from VAT under Article 135(1)(b) of the VAT Directive.
• The VAT exemption for credit management applies only to the current lender, not the original lender.
• Once credits are transferred, the originating bank provides a taxable service to the new lender.
• The opinion is based on fiscal neutrality and the prevention of abuse, ensuring the exemption is not misused based on historical lender status.

Source: vat-consult.be

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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