VAT exemption of intermediation services

At a glance

A recent European decision may affect the VAT treatment of intermediary services. Affected parties should review their current position and any agreements they have concluded.

A closer look

On 26 November 2025, the General Court of the European Union¹ (“GCEU” or the “Court”) issued its decision in the Versãofast case, T -657/24, concerning the application of the VAT exemption for credit intermediation services (CURIA - Documents).

The main takeaway of this case is that even if the intermediary has neither the power to act on behalf of the credit institutions nor any influence on the terms of the credit offers (i.e. there is no negotiation on the terms and conditions), it does not preclude the application of the VAT exemption for credit intermediation services.  

Given that the EU VAT Directive uses similar language for the intermediation of other financial assets, such as receivables, shares and securities, the decision is also relevant to the intermediation in these assets. Considering the importance of financial services in the Luxembourg economy, the clarification is welcome.

Facts and the General Court’s decision

Mr. Versãofast, the claimant at the origin of this case, concluded tie-in agreements with several Portuguese credit institutions.

In accordance with these agreements, he:

• Identified potential customers seeking mortgage loans;
• Informed them of the applicable loan conditions (e.g., interest rates and affordability ratios);
• Assisted them in gathering and analyzing the documentation required for their credit applications;
• Transmitted the applications to the relevant credit institutions;
• Presented the resulting credit offers to the customers; and
• Communicated the credit institutions’ final decisions.

These activities went beyond purely material or administrative tasks, such as merely providing brochures or forwarding credit-institution replies, which, in previous CJEU case law, clearly do not qualify for VAT exemption.

However, Mr. Versãofast was not authorized to conclude credit agreements on behalf of the credit institutions, nor did he participate in determining the terms of the offers, and consumers independently chose between the available offers and institutions

The General Court found that these limitations do not preclude the application of the VAT exemption. Taken as a whole, the services provided were intended to take all necessary steps to enable a credit institution to enter into credit agreements with potential customers.
 

Impact

Clarification of the scope of VAT exemptions is always welcome. It is noteworthy that the Luxembourg District Court, in a decision of 11 November 2020², adopted a similar approach in a case concerning the negotiation of shares.

Nonetheless, the judgment also illustrates that the boundaries of EU VAT exemptions remain imprecise, and that implementation of EU case law can vary across Member States. As a result, certain intermediaries established elsewhere in Europe may continue to treat their services as taxable and report them in their European Services listing. This may imply overpayment of VAT by Luxembourg beneficiaries if they also consider these services as subject to VAT. If not, this may lead to questions of the Luxembourg VAT authorities.

This decision may also affect the VAT treatment of services applied by Luxembourg intermediaries, their associated VAT deduction rights, and the treatment of services received by investment funds, particularly marketing and distribution services relating to the fund shares to potential investors.

Ultimately, the case underscores the importance of a careful factual analysis and proper documentation when determining the correct VAT treatment of intermediation services.

The Deloitte Luxembourg Indirect Tax team remains at your disposal to discuss the potential impacts on your organization.

¹ The General Court of the European Union (GCEU) replaces the Court of Justice of the European Union (CJEU) on VAT matters since October 2024.

² Jugement civil 2020 TALCH01 / 00339, Numéro TAL -2018-07469 du rôle, 20201111-TALux1-TAL-2018-07469a-accessible.pdf