UK law on hire-purchase agreements may be contrary to EU law
In HMRC v Volkswagen Financial Services(UK) (Case C-153/17) (3 May 2018) the advocate general considered that hire purchase agreements constitute single complex transactions which must be subject to tax.
The AG opened his opinion by noting that hire purchase contracts are treated in the UK as two distinct transactions: the taxable supply of a vehicle; and an exempt supply of credit. He expressed his ‘doubt’ as to the consistency of such splitting with EU law.
In his view the issue was as follows: ‘does a taxable person who carries out both taxable transactions and exempt transactions which are closely connected to those taxable transactions have the right to deduct a proportion of the input VAT paid on goods and services used indissociably for the purposes of both the taxable and the exempt transactions ...
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UK law on hire-purchase agreements may be contrary to EU law
In HMRC v Volkswagen Financial Services(UK) (Case C-153/17) (3 May 2018) the advocate general considered that hire purchase agreements constitute single complex transactions which must be subject to tax.
The AG opened his opinion by noting that hire purchase contracts are treated in the UK as two distinct transactions: the taxable supply of a vehicle; and an exempt supply of credit. He expressed his ‘doubt’ as to the consistency of such splitting with EU law.
In his view the issue was as follows: ‘does a taxable person who carries out both taxable transactions and exempt transactions which are closely connected to those taxable transactions have the right to deduct a proportion of the input VAT paid on goods and services used indissociably for the purposes of both the taxable and the exempt transactions ...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
