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A pawnbroking entity has enquired whether interest charged for the period a good remains in storage constitutes financial interest exempt from VAT. The DGT has ruled that these amounts are not financial interest, but rather storage or custody fees, and must therefore be taxed at the standard rate.
This ruling clarifies that storage-related charges in pawnbroking cannot be classified as exempt financial interest, ensuring they are subject to the standard VAT rate.
The tax team reviews your specific situation.
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