O Fundusz Inwestycyjny Zamknięty reprezentowany przez O S.A

In O Fundusz Inwestycyjny Zamknięty reprezentowany przez O S.A (Case C-250/21) (6 October 2022) the CJEU rejected the advocate general’s opinion and held that the sub-participation agreements were VAT exempt credit transactions.   

A sub-participation agreement exists when a lender that has provided a loan sub-contracts all or part of its risk to another financial institution – the sub-participant. In the case here a number of Polish banks securitised loans with O. Fundusz Inwestycyjny Zamknięty reprezentowany przez O S.A (O. Fundusz) acting as the sub-participant.  

The arrangement was that O.Fundusz advanced an upfront payment to the lenders and following this any payments made against the loan by the original borrower were passed to O. Fundusz. O Fundusz was effectively taking on the risk and reward of the loans made by the banks. The point being considered by the CJEU was the VAT treatment of...