The situation
A payment company’s merchant price list and a description of each fee
Your payment company in Amsterdam serves 2,800 merchants in the Netherlands and Germany. The price list has grown to fourteen fee lines: per-transaction fees, a monthly platform fee, terminal rental, currency conversion margins, chargeback handling, fraud screening and an instant payout fee. Finance has always treated the lot as exempt, and the new German merchants are asking for VAT invoices.
The exemption for payments is well known. The hours go on each line: whether the fee pays for a service that actually moves money, or for something technical around it. The Court of Justice has drawn that line in several decisions, and the national courts have applied it to fees like these.
What the research has to settle
The rules behind the answer
- The service must effect a transfer
- Transactions concerning payments and transfers are exempt when the service changes the legal and financial situation between the parties by transferring funds. Since SDC (C-2/95), the Court looks at what the service does, not what it is called.
- Technical services are taxable
- Services that only support a payment, such as processing data or providing equipment, are not exempt. In Bookit (C-607/14) a card-handling fee did not qualify, and in Cardpoint (C-42/18) cash-machine services supplied to a bank were held to be technical.
- Each fee is tested on its own facts
- One price list can mix exempt and taxable services. Where elements are supplied together, the first question is whether they form a single supply with a principal element or separate supplies.
- Currency exchange has its own exemption
- Transactions concerning currency are exempt under the same part of the VAT Directive. Whether a conversion margin built into a payout is an exempt currency transaction or part of another supply depends on how the service is structured.
How it runs in azta
From the question to the document
The question, as you would type it
Dutch payment institution charging merchants in the Netherlands and Germany: per-transaction acquiring fee, monthly platform fee, terminal rental, chargeback handling fee and an FX margin on payouts. Which are VAT-exempt payment or currency services and which are taxable, with the case law?
You start with
A payment company’s merchant price list and a description of each fee
- 01
List the fee lines
Paste the price list with a sentence on what each fee pays for. azta searches the VAT Directive, the Dutch and German VAT acts and the Belastingdienst material it holds.
Cited research· Free - 02
Find the decisions on each type of fee
Ask for the Court of Justice, Dutch and German decisions on card, platform and processing fees. azta summarises each holding and links the full text.
Case-law search - 03
Draft the fee-line note
Ask for a table of fee, what it pays for, treatment and the decision relied on. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
Hand it to billing
Export to Word so billing can set the VAT code for each line before invoicing the German merchants.
Word export· Pro You send
A VAT note per fee line, with the decisions relied on
What you get
A VAT note per fee line, with the decisions relied on
VAT note · draft
Merchant fee lines: VAT treatment
Terminal rental and platform fee. These pay for equipment and software access, not for a transfer of funds. On the decisions reviewed, they are taxable. For German merchants the place of supply is Germany, and the merchant accounts for the VAT under the reverse charge.
Per-transaction fee. Where we execute the transfer of funds to the merchant’s account, the fee pays for an exempt payment service. The note sets out the facts that support this and the decisions relied on. Where a partner bank executes the transfer, the analysis changes, as set out in section 3.
Chargeback handling. The fee covers investigating disputes and exchanging data with card schemes. Whether this is part of the exempt payment service or a separate technical service is the open point in this note, with the arguments on each side in section 4.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
18 minutes a month
At €95 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 32
- Capacity at your rate
- €3,078
- More fee-line VAT reviews a quarter
- 1.5
- Return on Pro
- 9.5×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- EUR-Lex · Curia
- wetten.overheid.nl
- Rechtspraak.nl
- Belastingdienst
- Rechtsprechung im Internet
What stays with you
- How each service actually works, from your operations and contracts.
- The position on the open lines and any ruling request.
- Setting the VAT codes and correcting past invoices if needed.
Frequently asked questions
- Does azta hold Dutch tax authority material?
- Yes. It holds published Belastingdienst material alongside Dutch legislation and case law.
- Can it help with invoices that may need correcting?
- Ask about the correction rules and the law at a past date. The review of individual invoices stays with your team.
- Is the free plan enough to test this?
- Five questions a month are free, no card. Canvas and Word export are on Pro.
