The CJEU has delivered its judgments in these cases concerning the VAT liability of card handling and payment processing services.
The taxpayers’ disputes, leading to these two references to the CJEU, concern the VAT liability of charges to consumers, which are described as ‘card handling fees’ and ‘booking fees’. The references seek guidance as to whether debit and credit card handling services are exempt under Article 13B(d)(3) of the Sixth Directive, now Article 135(1)(d) of VAT Directive, which exempts: ‘transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection.’ The CJEU has now released almost identical judgments, finding that the fees charged by the taxpayers are not exempt transactions regarding transfers and payments. This is likely to result in a narrowing of the UK’s exemption for payment handling services.
To access further technical analysis of the judgments, click here.