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05 July 2016
Issue: 4557 / Categories: Tax cases

Bookit Ltd v CRC (C-607/14), Court of Justice of the EU, 26 May 2016

VAT treatment of payment handling service

Bookit which was wholly owned by Odeon charged a fee for processing debit and credit card payments for customers. It claimed the fees were an exempt supply of financial services under VATA 1994 Sch 9 group 5 (Art 135(1)(d) of the VAT Directive). HMRC disagreed. The taxpayer appealed.

The First-tier Tribunal (TC3972) referred the issue to the Court of Justice of the EU.

The CJEU said under Art 135(1)(d) the exemption did not apply to a card-handling service such as Bookit’s which consisted in essence of an exchange of information between a trader and its merchant acquirer with a view to receiving payment for a product or service offered for sale. The settlement files were nothing other than a request to receive a payment electronically. The transmission could not be regarded as executing the payment or transfer or having...

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