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Consumer Credit Broking

Overview

Consumer credit broking services, in common with insurance, finance, foreign exchange dealing, betting and gaming etc. are mainly exempt from Value Added Tax (VAT) throughout the EU.

Exempt businesses do not charge VAT to customers on their services, but nor can they reclaim the VAT which is charged by suppliers on goods and services which they buy. This means that the VAT on supplies represents a cost to them and, with VAT rates as high as 25% (in Denmark and Sweden), it can be considerable.

However, certain services provided by EU suppliers, listed in article 9.2 of the 6th VAT Directive, are deemed to be supplied where the purchaser is established. Gibraltar is outside the EU VAT area and supplies of services by EU providers to a business established in Gibraltar are treated as being made outside the EU. They are therefore “outside the scope” of VAT. One example of an article 9.2 supply is advertising, which is an important element of a consumer credit broker’s costs.

STM Fidecs has set up a fully accredited brokerage in Gibraltar, and can help you save between 15% and 25% of advertising (and other art. 9.2) costs.

The Consumer Services division believes that, by working with other financial institutions operating in the consumer service market place, we can deliver an enhanced service, competitive advantage and financial benefit to both parties.

Whilst Gibraltar is outside the EU VAT area, financial institutions within Gibraltar do benefit from the EU’s principle of Freedom of Services and therefore are entitled to sell financial products and services directly to the 27 Member States. This combination of factors makes Gibraltar a unique and ideal jurisdiction in which to establish EU financial services providers.

For further information on the advantages of establishing consumer credit institutions in Gibraltar, contact alan.kentish@stmfidecs.gi.