Value added tax

The criteria for a service to fall within the VAT exemption for financial services under Art 13B(d)(3) of the Sixth VAT Directive were well established. The critical test was whether the transaction carried out by the taxpayer truly effected, in the sense of brought about, a transfer. A number of principles were relevant to determining the issue. First, a transfer was the execution of an order for the transfer of a sum of money from one bank account to another. Second, it involved a change in the legal and financial situation existing between the person giving the order and the recipient and between those parties and their respective banks. Third, there was no requirement for the supplier to be a bank. Fourth, there was no requirement for a direct contractual link between the person executing the transfer and the ultimate customer of the bank. Fifth, the test whether a transaction constituted a transfer for the purposes of that directive was a