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Tax & Legal

VAT on lease concluded after delivery of asset to customer


The finance ministry has changed its VAT Implementation Decree to the effect that a lease concluded after delivery of the asset to the customer is either a sale and lease-back transaction or the grant of a loan.

The finance ministry has changed its VAT Implementation Decree to the effect that a lease concluded after delivery of the asset to the customer is either a sale and lease-back transaction or the grant of a loan. The distinction depends on the circumstances of the case. A sale and lease-back is to be VAT-ted as a sale by the customer to the leasing company followed by a service by the leasing company to the customer (the monthly rentals). If the sale and lease-back is to be seen as a loan, it will not have VAT consequences.