Forum contributions: Case C-232/24 Kosmiro: The Court of Justice Excludes the ‘Financing’ Component in Its VAT Assessment of Factoring Transactions

Key Points

• To clarify the VAT treatment of factoring transactions and the applicability of exemptions under the VAT Directive.
• Review of court proceedings related to VAT assessment of factoring transactions
• Analysis of Article 135(1)(b) and (d) of the VAT Directive
• Examination of the notion of ‘debt recovery’ in relation to VAT exemptions.
• The court confirmed a broad interpretation of ‘debt recovery’.
• The decision limits the scope of existing VAT exemptions for factoring transactions.
• ‘Financing’ components are excluded from VAT assessments in these transactions.