In December the EU’s Ecofin inter-governmental council reached
agreement on new VAT rules for determining the “place of
supply” of services for cross-border transactions like car fleet
leases.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
In the case of long term car hire to business customers, from
January 1 2010 it will be deemed that the place of supply is the
country where the customer is established.
For daily rental (up to 30 days) it will be the place where the car
is made available to the customer. This replaces the existing rules
where the place of supply is the lessor’s place of establishment
and VAT on rentals can be recoverable under that country’s
rules.
The present rules have encouraged large fleet leases to be
arranged from countries like Germany, Belgium or Luxembourg which
have either low VAT rates or relatively generous VAT recovery rules
on car leases. The new deal should close this loophole.
The new announcement has been widely welcomed. “The new rules will
be a significant improvement, removing an unfair advantage for
deals done from certain EU member states”, said Vincent Rupied,
director of corporate relations at Arval and chair of Leaseurope’s
Automotive Steering Group.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
