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 the payments from O. Fundusz to the...