European Court of Justice Issues Preliminary Ruling on Finnish VAT Rules for Factoring Services

The European Court of Justice (ECJ) Oct. 23 issued a preliminary ruling in Case No. C-232/24, on Finnish VAT rules for factoring services. The taxpayer, a Finnish company, provided invoice factoring and trade factoring services in exchange for commissions and a flat-rate assignment fee. The Finnish Central Tax Board found that the taxpayer’s commissions and service fees were subject to VAT. Upon request for a preliminary ruling, the ECJ held that EU Directive 2006/112/EC on the common system of VAT must be interpreted as meaning that: 1) factors supply taxable services by charging factoring commissions that vary with payment terms ...