On 2 May 2019, the Advocate General (AG) in Finanzamt Trier v Cardpoint GmbH opined that the outsourced operation of ATMs is not within the scope of the VAT exemption (Article 135(1) (d) of Directive 2006/112/EC).

The services in question consisted in operating and maintaining the ATMs, replenishing them, installing computer hardware and software to enable the reading of bank card data, and sending withdrawal authorisations requests to the appropriate bank.

In light of the fact that the VAT exemptions must be interpreted strictly, the AG’s view was that none of the services in question (i) had the effect of transferring a sum of money, or (ii) entailed legal and financial changes characterising a transfer of money. Rather, in the AG’s view, the services were merely of a physical, technical or administrative nature.

Accordingly the AG opined that the VAT exemption for transactions concerning payments was not available to the services in question. Whether the ECJ follows the AG’s opinion or not will be closely watched by the European financial outsourcing industry.

The decision can be viewed here