VAT exemption for credit intermediaries has scope widened
VAT exemption for credit intermediaries has scope widened
On 26 November 2025, the CJEU confirmed in the Versãofast judgment that the VAT exemption for credit intermediaries can still apply if the intermediary cannot bind or influence the credit institution(s). This judgement provides guidance to mortgage, credit and loan providers to verify whether their service package falls under the VAT exemption.
The CJEU determined that the credit intermediation exemption could be applied to Versãofast ’s services. Although Versãofast did provide some merely technical, physical and administrative services, as a whole its services did do everything necessary for the credit institution to enter into a contract with potential customers.
Versãofast being unable to bind the credit institutions had no bearing on whether the credit intermediary exemption applies. It also did not matter that customers remained free to choose which credit institution (if any) they conclude an agreement with. It was also clear that Versãofast acted as an intermediary, as they had an indirect interest in contracts being entered into from the method of remuneration agreed with the credit institutions.
The intermediary’s services should be looked at as a whole, as it is likely there will be taxable administration services provided as part of the bundle. As long as the aim of the service provided is to facilitate two parties entering into an agreement of credit, the whole bundle would be an exempt supply.
This will result in a beneficial VAT position for many banks and other financial institutions who will now not need to pay (likely irrecoverable) VAT on the fees paid to intermediaries who help them enter into contracts with potential customers.
Background – case summary
A Portuguese company (“Versãofast”) is a licenced credit intermediary. Versãofast concluded agreements with several Portuguese credit institutions. Versãofast ’s activities as set out in these agreements was:- seeking and canvassing potential customers for mortgages;
- assisting customers with gathering relevant documentation, checking the documentation provided and forwarding it to credit institutions; and,
- providing customers with information about the mortgage offer(s) received and informing customers of the final decision of the chosen credit institution.
The CJEU determined that the credit intermediation exemption could be applied to Versãofast ’s services. Although Versãofast did provide some merely technical, physical and administrative services, as a whole its services did do everything necessary for the credit institution to enter into a contract with potential customers.
Versãofast being unable to bind the credit institutions had no bearing on whether the credit intermediary exemption applies. It also did not matter that customers remained free to choose which credit institution (if any) they conclude an agreement with. It was also clear that Versãofast acted as an intermediary, as they had an indirect interest in contracts being entered into from the method of remuneration agreed with the credit institutions.
Clarification on the VAT exemption
This CJEU judgment expands and clarifies the scope of the credit negotiation exemption. The exemption can still be applied if the intermediary cannot bind the credit institution(s) and potential customers remain free to choose which credit institution (if any) they conclude an agreement with.The intermediary’s services should be looked at as a whole, as it is likely there will be taxable administration services provided as part of the bundle. As long as the aim of the service provided is to facilitate two parties entering into an agreement of credit, the whole bundle would be an exempt supply.
Practical consequences
Intermediaries for mortgages, loans, credit cards and other supplies of credit will need to review the services they provide (as a whole) to ascertain whether the exemption would apply for them. This case highlights that the role carried out by the intermediary is important, rather than the intermediary’s ability to bind or act on behalf of a credit institution.This will result in a beneficial VAT position for many banks and other financial institutions who will now not need to pay (likely irrecoverable) VAT on the fees paid to intermediaries who help them enter into contracts with potential customers.
