In its Resolution of 19 March 2012 (I FPS 5/11), the
Supreme Administrative Court (“SAC”) composed
of seven judges held that under the provisions of the
Act on Tax on Goods and Services it is possible to
make the following statement: Acquisition of a
money receivable (which must be stressed, at one’s
own risk) for the purposes of recovery in one’s own
name and on one’s own account is not a service
provided against consideration within the meaning
of Article 5(1)(1) in conjunction with Article 8(1) [of
the Act on Tax on Goods and Services of 11 March
2004 (“VAT Tax”)] if the difference between the
nominal value of such receivables and their selling
price reflects the actual economic value of such
receivables at the time of sale.
As further pointed out by SAC: the fundamental and
necessary prerequisite for a transaction to be treated
as a service provided against consideration, that is a
taxable transaction, is the presence of consideration
directly relating to such transaction, actually
received (or payable), as mutual performance for the
service provided.
The findings of the above ruling are driven by the
decision of the Court of Justice of the European
Union of 11 October 2011 rendered in case no. C-
93/10 and by the binding nature of the interpretation
of the EU regulations presented in it, which
regulations in the case under review coincided with
the provisions of national law.
SAC pointed out that a transaction of purchase, at
one’s own risk, of a non-performing receivable, at a
price below its nominal value could not be treated as
a service provided by the purchaser of the receivable
exempt from tax on goods and services (VAT). In
that particular situation the service provider did not
undertake to recover debt against consideration. The
key considerations in determining whether a
transaction could be at all treated as a service
provided against consideration within the meaning
of Article 5(1)(1) in conjunction with Article 8(1) of
the VAT Act included: firstly, actual payment of the
price or other consideration and, secondly, the
existence of a direct connection between the
consideration received and the service provided.
SAC subscribed to the view that pursuant to Article
509 § 1 of the Civil Code relating to the assignment
of receivables, the purchase of a money receivable
was effected in the purchaser’s own name and on
his/her own account, such purchaser entering in the
place of the creditor, and what subsequently
happened to the receivable, e.g. its recovery, was
beyond the scope of the transaction. Recovery by a
party of its own receivables, on its own account, is a
natural
component
of
business
dealings.
Consequently, such transaction cannot be treated as
provision of a service, as there is no party to which
the service would be provided, and at the same time
there is no agreement for provision of the service
against consideration. Therefore, the purchase of a
money receivable is not a “debt recovery” service
exempt from tax on goods and services (VAT).
Thus, SAC held that in the case before it, there had
been no provision of a service constituting a
transaction subject to VAT, and so there could be no
exemption of such transaction from VAT. The SAC
Resolution under review can without doubt affect
the currently prevailing interpretation and case-law
and make receivable purchase transactions subject to
transfer tax.
SAC indicated that examination of a specific
transaction should involve looking for such potential
direct consideration that the purchaser/assignee
would seek as mutual performance for a potential
service provided to the seller/assignor. SAC clearly
stated that if a receivable sale transaction does not
involve provision of a service by the purchaser of the
receivable to its seller against direct consideration
received by the purchaser, no provision of a service
against consideration takes place and consequently
no transaction of purchase at one’s own risk of a
non-performing receivable below its nominal value
can be treated as a service provided by the purchaser
of the receivable within the meaning of Article
5(1)(1) of the VAT Act.
MILLER, CANFIELD,
W. BABICKI, A. CHEŁCHOWSKI I WSPÓLNICY SP.K.
ul. Batorego 28-32
81-366 Gdynia
Tel. +48 58 782-0050
Fax +48 58 782-0060
gdynia@pl.millercanfield.com
ul. Nowogrodzka 11
00-513 Warszawa
Tel. +48 22 447-4300
Fax +48 22 447-4301
warszawa@pl.millercanfield.com
ul. Św. Mikołaja 7
50-125 Wrocław
Tel. +48 71 337-6700
Fax +48 71 337-6701
wroclaw@pl.millercanfield.com
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developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to a particular course of
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