Cooperation agreement by granting a loan for the purchase of goods and subsequent delivery of produced goods. Difference between a complex single transaction and independent ones. Judgment of the ECJ. Stock ’94


As is usual, the execution of several operations that are jointly lent and which maintain some kind of link between them may lead to doubts as to whether both operations may constitute a single complex operation, which would follow the same treatment of VAT, or two separate operations, each of which would have its own VAT treatment. In addition, it can be considered, in the case that the operation is unique, which of the two is the main one that determines the treatment to follow.

This is the case of the judgment of the Court of Justice of the European Union (ECJ) of December 8, where a Hungarian company acts under a regime known as “cooperation with the integrator”, by which it (the integrator) grant a loan to a farmer (integrated) who uses it to buy from the integrator the means necessary for his activity (current assets) and later on sells his production to the integrator or to the market. These loans can only be used to buy the current assets from the company.

In connection with the sale of these assets to the farmer, the company charged the corresponding VAT. However, the interests charged quarterly on the loan granted was exempt from VAT. In this sense, the Tax Administration considered that the loans granted were intrinsic elements of the cooperation service, so that the same type of VAT should be applied to the delivery of goods and loans. However, the national court asks the ECJ whether the granting of the loan for the purchase of current assets and the supply of such assets should be considered as a single complex operation or independent transactions and, in the case of being a unique operation, which are the criteria that allow to determine which operation establishes the regime applicable to the unique operation.

The Court relies on numerous existing case-law in this regard, recalling that two transactions form a single complex operation when they are so closely linked that they objectively constitute a single economic benefit, while the breakdown would be artificial, or when one is ancillary to the other, that is to say that “it does not constitute for the customer an end in itself, but the means to enjoy in the best conditions of the main service of the provider”.

To determine this, it is necessary to attend to the characteristic elements of the operation, such as the economic objective of the operation and the interest of the recipients. In the present case, the granting of the loan does not have an autonomous interest for the recipient since those resources cannot be used freely, but could only be used for the purchase of current assets, among other reasons because the lender was not authorized to grant loans for a different purpose. Therefore, the loan and sale of the assets pursue the same economic objective, i.e. the start-up of the business.

On the other hand, as regards the transaction to be considered as the determining factor in order to establish the treatment for VAT purposes, in this case the Court considers that the granting of the loan is not understood without the sale of the assets, so the loan is not an end in itself, but only a means to acquire the goods. Therefore, the main operation that determines the treatment of VAT will be the delivery of the goods, operation subject to and not exempt from VAT that determines the application of the tax to the entire single operation.

A copy of Judgment number C-208/15 is attached.

For more information please contact at

ECJ C_208_15

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