Transactions concerning payments and transfers EU VAT case law

7 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2010 to 2018.

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Provisions these cases interpret most

Article 13 of Sixth Directive 77/388/EEC Exemptions · 5 of these cases
Article 135 of Directive 2006/112/EC Exemptions for other activities · 2 of these cases

The 7 cases, most recent first

Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-5/17 DPAS

Judgment · 25 July 2018 · United Kingdom

Direct debit administration is not an exempt payment transaction

The exemption does not apply. Only services which themselves effect the legal and financial changes characteristic of a transfer of money qualify. Instructing banks to execute direct debits is administrative and merely a preparatory step, comparable to the card handling in Bookit. That the service is essential to the payments being made does not make it exempt. AXA UK, which addressed only debt collection, does not widen the concept. The debt collection question was left unanswered. Relevant to payment plan administrators, membership and subscription scheme operators, bureaux and outsourced billing providers who collect by direct debit and remit onward.

C-607/14 Bookit

Judgment · 26 May 2016 · United Kingdom

Card handling fees and the payments exemption

The exemption does not apply. The service is technical and administrative assistance. An exchange of information between a trader and its merchant acquirer to obtain payment. The provider neither debits nor credits accounts, nor instructs any debit, has no control over the authorisation code, and assumes no liability for the change in the legal and financial situation. Being essential to the payment is not enough. Whether the code comes directly or via the acquirer is irrelevant. The referring court must still decide whether the fee is a single supply with the ticket sale. Merchants and their agents charging separate card handling or booking fees, in ticketing, travel, events and online retail, cannot treat those fees as exempt payment handling merely because their file transmission triggers settlement.

C-130/15 National Exhibition Centre

Judgment · 26 May 2016 · United Kingdom

Card handling booking fees and the payments exemption

The exemption does not apply. The provider neither debits nor credits accounts, nor orders any debit or credit, nor assumes responsibility for the legal and financial changes. It merely applies technical and administrative means, exchanging information with its merchant acquirer to obtain payment. Indispensability to the payment, automation, and whether the authorisation code comes directly or via the acquirer are all irrelevant. The Court also questioned the referring court's premiss that the card handling is a separate supply rather than ancillary to the ticket sale, leaving that to the national court. Booking and card handling fees charged by merchants, ticket agents, venues and other retailers on card payments are taxable, and any historic repayment claims built on the SDC functional test fail where the trader does not itself effect the entries or bear responsibility for the transfer.

C-464/12 ATP PensionService

Judgment · 13 March 2014 · Denmark

Occupational pension funds as special investment funds

Such pension funds may be special investment funds where they are funded by the beneficiaries, the assets are invested on a risk-spreading basis and the pension customers bear the investment risk. That is the decisive distinction from Wheels. Employer payment, collective agreements, payout form, income tax deductibility and an ancillary insurance element are irrelevant. "Management" covers opening accounts and crediting contributions, plus Annex II accounting and account information services. Those same crediting services, and anything ancillary or forming a single supply with them, are also exempt payment or transfer transactions. For third party pension administrators and their fund clients the ruling unsettles the treatment of contribution processing where the scheme is defined contribution and the members carry the investment risk.

C-350/10 Nordea Pankki Suomi

Judgment · 28 July 2011 · Finland

Electronic messaging services for financial institutions and the finance exemptions

Those services do not fall within either exemption. The services are supplied for consideration and are taxable. They merely transmit information and do not themselves effect any transfer of funds or securities, so they produce none of the legal and financial changes characterising an exempt transaction. That an element is essential, or the only one available on a market, is not enough. The supplier's contractual responsibility, however large in money terms, covered only secure and legible transmission, so it was technical and not specific and essential. Confirms that outsourced infrastructure supporting payments and securities settlement is taxable unless the provider assumes responsibility for the specific, essential elements of the financial transaction.

C-276/09 Everything Everywhere

Judgment · 2 December 2010 · United Kingdom

Payment handling charges as ancillary to the principal supply

The charges are not consideration for a distinct and independent supply. Handling the payment is ancillary to the principal supply of telecommunications services. Enabling customers to choose a convenient payment method is not an aim in itself and offers nothing independent of the telephone service. Seeking and processing payment is intrinsic to any supply for consideration. Separate contractual pricing and separate invoicing are not decisive. The exemption questions therefore did not need to be answered. Confirms that payment handling fees charged by a supplier to its own customers follow the tax treatment of the main supply, whatever the payment channel.

C-175/09 Axa UK

Judgment · 28 October 2010 · United Kingdom

Payment collection services and the debt collection exclusion

The various acts formed a single indivisible supply whose economic purpose was to move the monthly sum from patient to dentist. In principle a transaction concerning payments, it nonetheless fell within the debt collection exclusion, which is construed broadly. The service was designed to obtain payment of debts and relieved creditors of work they would otherwise do. It was irrelevant that the debts were collected on their due date and that no coercive recovery measures were involved. Outsourced collection of recurring customer payments is taxable, whoever supplies it and whatever technology is used.