BB/16A/98 VAT on foreign exchange (FOREX) costs

Part V16 Forms and other HMRC material

BB/16A/98 VAT on foreign exchange (FOREX) costs

BB/16A/98 VAT on foreign exchange (FOREX) costs

Business Brief, Issue 16. 28 July 1998


The European Court of Justice in its decision of 14 July 1998 found that foreign exchange transactions are supplies of services for VAT purposes and that for transactions where no fees or commission are charged the consideration is the profit, or as the court stated “the net result of the supplier's transactions over a given period of time” (C & E Comrs v First National Bank of Chicago (Case C–172/96) [1998] STC 850 [Part V11]). The decision effectively overturns Customs and Excise's “no supply” policy set out in Business Brief 22/95. Customs will implement the court's decision immediately.

These supplies of services are exempt under VATA 1994 Sch 9 Group 5. If supplied to a person within the EU there is no right to recover related input tax. If supplied to a person outside the EU related input tax would be

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