Forum contributions: Case C-232/24 Kosmiro: The Court of Justice Excludes the ‘Financing’ Component in Its VAT Assessment of Factoring Transactions

In its judgment of 23 October 2025 in Kosmiro (C-232/24), the Court of Justice of the European Union (CJEU) provides important clarifications on the qualification and VAT treatment of factoring transactions. It confirms a broad interpretation of the notion of ‘debt recovery’ and therefore limits the scope of the exemptions laid down in Article 135(1)(b) and (d) of the VAT Directive.