Brussels, 05/11/2010 (Agence Europe) - The supply of payment recovery and processing services for a service provider, in this case a client's bank and the client's dentist, using the direct debit system in the United Kingdom, is not exempt from value-added tax (VAT) under the EU's sixth VAT directive (77/388/EEC), decided the European Court of Justice in a ruling issued on 28 October 2010 in Case C-175/09, responding to a request from the English appeals court over a dispute it has to settle between the British tax department and the company AXA UK Plc.
The direct debit system enables payments to be automatically made from a client's bank account to an authorised third party, the amount of the payment being variable and determined by the third party. In the case in question, operations were carried out by Denplan, a company belonging to a VAT group whose representative is the AXA company. (F.G./transl.fl)