VAT Treatment of Intragroup Receivables Purchase and Financing Charges

• The Central Tax Board held that A Oy’s purchase of receivables from operating companies at face value was a definitive sale of receivables, not a loan or credit relationship.
• As a result, the interest and commitment fee charged by the bank to A Oy could not be treated as consideration for a VAT-exempt grant of credit, a receivables transaction, or payment services under Finnish VAT law / VAT Directive article 135(1)(d).
• The arrangement was not a taxable factoring service either, because A Oy did not assume responsibility for managing or collecting the receivables; that remained with the operating companies.
• A Oy’s recharges of the bank’s interest and commitment fee to the operating companies were also not considered consideration for any identifiable service supplied by A Oy.

Source: vero.fi

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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