- The purchase of receivables without taking over their collection is not considered a factoring service but a tax-exempt transaction in the business of receivables under § 4 Nr. 8c UStG.
- The court (FG Düsseldorf) ruled that only when the assignee relieves the assignor from actual collection does a factoring service exist.
- The mere acquisition of receivables with assumption of default risk, without collection, is a tax-exempt transaction, not a taxable factoring service.
- The plaintiff’s claim for full input VAT deduction was rejected; input VAT must be proportionally reduced according to the share of tax-exempt transactions.
- This interpretation aligns with prevailing legal opinion and administrative practice.
Source: datenbank.nwb.de
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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