- Court Ruling: The Hague Court of Appeal determined that the outsourced services provided by X to Bank B qualify for the VAT payment system exemption under Article 11(1)(j) of the VAT Act 1968, as they fulfill essential functions necessary for payment services.
- Service Scope: X performs comprehensive payment processes, including the transfer and receipt of funds for account holders, effectively taking over the entire payment transaction process, despite not owning the funds or being directly liable to account holders.
- Regulatory Compliance: X’s operations are subject to oversight by the Dutch Central Bank (DNB) and the European Central Bank (ECB), emphasizing that their services extend beyond mere administrative functions to encompass significant legal and financial responsibilities.
Source Taxlive
Court of Appeal The Hague: VAT Exemption for Payment Services by A B.V. Upheld
- The case was heard at the Court of Appeal in The Hague on June 24, 2025, and published on July 17, 2025.
- The case number is BK-23/365 and it involves tax law in a higher appeal.
- The main issue is whether the payment services provided by A B.V. qualify as exempt payment transactions under specific tax laws and EU directives.
- It is agreed that the services are essential for the exempt transactions, but it is disputed if they are characteristic of such transactions.
- A B.V. argues that their services fulfill essential functions of a money transfer, referencing EU court cases.
- A B.V. handles all operational payment tasks without B N.V.’s involvement, except in rare cases of insufficient funds.
- A B.V. processes 99.9 percent of transactions independently.
Source: uitspraken.rechtspraak.nl
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.
