CJUE. Refusal of the fiscal authorities to grant an adjustment of the VAT which was paid for following the conclusion of two leasing contracts

The Court of Justice of the European Union released on Thursday, the 2nd of July 2015, the judgment issued in Case C-209/14, NLB Leasing.

The Court has ruled in the VAT domain with regards to the restitution to the paymaster of an immovable property which represents the object of a leasing contract; the interpretation of the notions “annulment, refusal and total or partial non-payment”; the right of the paymaster to have the taxable base reduced.

The reference for a preliminary ruling was made in a dispute between NLB Leasing d.o.o., on one hand, and the Republic of Slovenia, represented by the Ministry of Finance, on the other, regarding the latter’s refusal to grant an adjustment of the amount of the value-added tax which was paid for following the conclusion of two leasing contracts.

The Court maintained that in the case of a leasing contract concerning an immovable property which provides either for the transfer of property in the user’s favor at the maturity of the contract, or for making the essential attributes of the property over this real estate available in the user’s favor, passing on to that particular user the majority of advantages and risks posed by the right of property over the real estate, and the updated value of the rates basically being identical with the market value of the good, the operation resulting from such an agreement ought to be assimilated to an operation of capital acquisition.

Withal, the Court held that the Directive is to be interpreted in such a way so as not to allow a taxable person to reduce his taxable base when the latter has already cashed all payments to all intents and purposes in exchange for the benefit which he has performed or when, without the termination or the annulment of the agreement having intervened, the other party to the contract does not owe the agreed price anymore.

Ultimately, the principle of fiscal neutrality has to be interpreted as not opposing to a leasing performance with regards to immovable property, on one hand, and on the other, not opposing to the idea of a transfer of such immovable property to a third party (in what concerns the leasing contract) representing the object of a different taxation with the purpose of value-added tax, to the extent that these operations cannot be considered as constituting a single performance, aspect which needs to be appreciated by the referring court.

:: The Source: JURIDICE.ro

Andreea LUCACI

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