- Services for outsourced payment transactions are exempt from VAT due to their essential and characteristic functions that bring legal and financial changes.
- A fiscal unit including A B.V. provides IT services and business processes for financial sector clients.
- Since 2007, bank B N.V. outsourced its entire operational payment transactions to a predecessor of A B.V.
- A B.V. performs tasks like processing payments, managing customer data, and providing e-banking for B N.V.
- A B.V. processes 99.9 percent of payment orders without B N.V.’s intervention, despite lacking a banking license.
- The question was whether A B.V.’s services qualify as VAT-exempt payment transactions.
- The court initially ruled A B.V.’s services were technical and administrative, not leading to legal or financial changes, thus not VAT-exempt.
- The tax authority agreed, stating A B.V. did not perform characteristic services as no ownership transfer or legal and financial changes occurred.
- A B.V. argued it performed essential functions by approving payments and altering account balances, leading to legal and financial changes.
- The Court of Appeal ruled A B.V.’s services are VAT-exempt as they perform all necessary actions for transferring and receiving money, causing legal and financial changes.
- The court emphasized that ownership of funds or direct legal relation with the end customer is not required for VAT exemption.
- The tax authority must refund €100,640 in VAT and cover legal costs.
- The ruling referenced cases like Bookit and Cardpoint to support that a service is exempt if it fulfills essential functions of a transfer, leading to legal and financial changes.
Source: btwjurisprudentie.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.
