- The ECJ ruled that both the variable factoring commission and the fixed arrangement fee in factoring agreements are VAT‑taxable as consideration for debt collection services.
- This applies to both trade factoring (assignment with risk transfer) and invoice factoring (financing secured by invoices).
- The court clarified that the “debt collection” exclusion in article 135(1)(d) of the EU VAT Directive has direct effect.
- The fees are considered a single, indivisible service of debt collection, not exempt as credit granting, and are subject to VAT.
Source: pwc.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.
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