The European Court of Justice answered in this case to two preliminary questions. To the first question the Court declared that a business which purchases debts, assuming the risk of the debtors’ default, and which, in return, invoices its clients in respect of commission pursues an economic activity for the purposes of Articles 2 and 4 of of the Sixth Council Directive (77/388/EEC) of 17 May 1977 , so that it has the status of taxable person and thus enjoys the right to deduct tax under Article 17 of the Sixth Directive (77/388/EEC).
To the second preliminary question the Court answered that an economic activity by which a business purchases debts, assuming the risk of the debtors’ default, and, in return, invoices its clients in respect of commission, constitutes debt collection and factoring within the meaning of the final clause of Article 13B(d)(3) of the Sixth Directive (77/388) and is therefore excluded from the exemption laid down by that provision

This entry was posted on Tuesday, November 22nd, 2005 at 8:06 pm and is filed under Judgments of the European Court of Justice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.