VAT deduction right confirmed even where costs are not recharged in taxable transactions: a precedent in the car leasing sector *

 

After having recently ruled over the qualification of leasing agreements with call option as a supply of goods or services [1], the ECJ has now investigated the VAT treatment of hire purchase transactions and, more precisely, the right to deduct the input VAT on costs incurred by the lessor. As an extra, new insides are provided about the “direct and immediate link” test[2]. Where do we stand now? 

 

[1] Cf. ECJ, 4 October 2017, Mercedes-Benz Financial Services UK Ltd, C-164/16, obs. in B.J.S., mai 2018, n° 608, p. 12.

[2] Cf. ECJ, 18 October 2018, Vokswagen Financial Services UK Ltd, C-153/17, disponible sur www.curia.eu.

 

 

Posted in VAT