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ECJ rules VAT on card payment handling

  • May 26, 2016 | Richard Asquith

ECJ rules VAT on card payment handling

The European Court of Justice (ECJ) ruled this week on the VAT liability of credit payment handling feed for a cinema ticket service. The ECJ backed the UK’s HMRC and First-tier Tribunal and ruled that VAT was liable on the handling fees.

VAT on credit card payment processing

Bookit Ltd, a UK company, provided cinema ticket credit purchase handling services for Odeon Cinemas. The UK’s HMRC determined that such services which liable to VAT, and not exempt as a financial service under Schedule 9 of the UK’s Finance Act, which mirrors Article 135(1)b to g on exemptions for processing accounts, payments, cheques and others.

Bookit charged Odeon for processing credit card payments taken over the phone or by internet – approximately €0.82 to €0.95 per transaction.

The ECJ found that Bookit paid no specific or essential part in achieving the payments. It merely acted as an intermediary between Odeon, customers and the merchant service (a bank).

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2019 Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.