The issue involves a referral from Poland about the proper VAT treatment of a sub-participation agreement. The taxpayer was a non-standard securitization fund that looked into sub-participation agreements with banks or other securitization funds as a sub-participant.
According to the taxpayer, the services provided under the sub-participation agreement help with cash flow and should be seen as a credit or loan in order to avoid VAT. The Polish Finance Minister dismissed what the taxpayers said and kept the VAT rate at 23%.
The originator gets the money based on the terms of the original loan agreement with the primary debtor. In this case, the cash flow and risk are moved from the originator’s balance sheet to that of the investment fund, but the originator still has legal ownership of the assets.
Source GVC
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