Securitisation of loans: advocate general opines that loan management services are not exempt from VAT

The opinion of advocate general Brkan in Case T‑184/25 (Veronsaajien oikeudenvalvontayksikkö v A Oy), delivered on 25 February 2026, provides important insights into the interpretation of VAT exemptions applicable to financial services under Article 135(1)(b)–(d) of the VAT Directive. The case centres on a Finnish securitisation structure in which the originating bank transferred housing loans to a wholly owned group entity while continuing to administer those loans for remuneration. The advocate general adopts a strict reading of the exemption provisions, emphasising both the principle of fiscal neutrality and the need to prevent VAT‑free outsourcing of core financial functions.

1. Facts of the case

A Oy, a Finnish bank, grants residential mortgage loans and then sells most of these loans to its wholly owned subsidiary B Oy. All rights and obligations associated with the loans are transferred to B Oy, which uses them as collateral for its bond issuances. Despite the transfer, A Oy continues to manage the loans on B Oy’s behalf and receives market-based remuneration for this service.

The Finnish Central Tax Board held that both the sale of the loans and the loan management services provided by A Oy were exempt from VAT. The Board considered A Oy to remain “the person granting the credit,” except in relation to debt-collection services, which remain taxable. Finland’s Tax Recipients’ Legal Services Unit challenged this view and argued that VAT exemption applies only where the same entity is both lender and loan manager, which was not the case after the sale of the loans.

2. The questions referred to the CJEU

The Supreme Administrative Court of Finland referred the matter to the Court of Justice of the European Union (“CJEU”). The CJEU has been requested to clarify whether loan-management services performed by the former lender fall within the scope of:

• Article 135(1)(b), which concerns the management of credit by the person granting it;
• Article 135(1)(c), which concerns dealings in credit guarantees or other securities; and
• Article 135(1)(d), which concerns transactions related to debts.

3. Key takeaways of the AG opinion

The advocate general advised that loan-management services by the original lender are not VAT‑exempt under Article 135(1)(b) of the VAT Directive when the lender has already sold the credit but continues to manage it for payment. The exemption applies only to the current lender, not the former one.

Furthermore, Article 135(1)(c) does not apply either to the proposed transactions; loan management performed by the seller of the credit is not exempt merely because the purchaser issues bonds secured by those loans. The exemption for dealings or management of credit guarantees cannot be used to cover ordinary loan-management in this scenario.

Article 135(1)(d) also offers no exemption: loan management provided by the original lender after the sale of the loan cannot be treated as a VAT‑exempt transaction concerning debts or payments.

4. What this means for businesses

As the advocate general’s opinion indicates that loan‑management services performed by an originating lender after the sale of the underlying credit portfolios are unlikely to qualify for VAT exemption under any limb of Article 135(1) of the VAT Directive, businesses relying on servicing‑fee models within securitisation or intra‑group financing structures may face potential VAT exposure. Pending the CJEU’s final ruling, companies may benefit from proactively assessing structural sensitivities, reviewing contractual arrangements and evaluating alternative operating models. The Wolf Theiss tax team stands ready to assist by analysing the potential impact on your existing frameworks, advising on risk‑mitigation strategies and supporting the design and implementation of resilient, VAT‑efficient structures as the legal landscape continues to evolve.