VAT: shall a lease agreement with call option be qualified as a supply of good or service?

The European Court of Justice has delivered, on the 4th October 2017, important clarifications regarding the characterisation as a “supply of service” or “supply of good” under the VAT legislation of a lease contract with a call option*. Relevant issue, if any, as the lease is subject to tax, in the first case, on each monthly instalments or, in the other one, in full on the total price at inception of the contract, with notable differences in terms of VAT deduction rights. This new case law is of a strong interest, particularly for the car leasing industry and its clientele. * ECJ, 4 October 2017, Mercedes-Benz Financial Services UK Ltd, C-164/16.
Posted in VAT