On 3 October 2019, the ECJ10 held that the provision and maintenance of cashpoint machines did not fall within the VAT exemption at Article 135(1)(d) of Directive 2006/112/EC for financial services transactions.

Article 135(1)(d) refers to “transactions, including negotiation, concerning deposit and current accounts, payments, transfers, debts, cheques and other negotiable instruments, but excluding debt collection and factoring”.

In this case the services provided to banks by the taxpayer comprised the supply and maintenance of cashpoint machines. The taxpayer verified bank card data, requested bank authorisation and dispensed the cash. The ECJ took the view that these were merely ‘functional’ services, rather than the approval of transactions. The ECJ held that, in order to constitute a “payment transaction” for the purposes of the VAT exemption, the services had to have the effect of transferring funds, and effecting legal and financial change. 

The decision (French version) can be viewed here.