Supply of services vs' delivery of goods

1
Supply of services vs. delivery of goods

• Current treatment
• Supply of services
• Split of capital from interest
• VAT applies to capital element at the VAT rate
  for goods
• VAT does not apply to the finance element
• VAT is deductible
• Account for VAT at time of instalments

• EU Accession
• Supply of services main rule
• May be deemed as delivery of goods
• Case by case analysis of the leasing contract
• VAT Standard rated
• Treatment unclear and varies between countries

2
Cross border leasing

• Current treatment
• Cross-border leasing option to buy gt
  importation by the beneficiary

• EU Accession
• Cross-border leasing option to buy gt
• 1)within the Community
• Intra-Community acquisition by the leasing
  company
• Obligation to register for VAT purposes
• 2) with parties outside the Community
• Importation

3
Place of supply

• Current treatment
• Leasing of
• movable tangible property where the beneficiary
  is located
• immovable property where the property is located

• EU Accession
• New rules
• movable tangible property except means of
  transport where the beneficiary is located
• means of transport where the supplier is
  located
• immovable property where the property is
  located
• Use enjoyment for leasing transactions with
  non-EU parties

4
Compliance

• Current treatment
• VAT return
• VAT purchase ledger
• VAT sales ledger

• EU treatment
• Register of non-transfers
• Recapitulative statement for intra Community
  deliveries and acquisitions
• A list of capital goods subject to adjustment
  (e.g. fixed assets)

5
LOCAL LEASING MOVABLE GOODS

• 2 operations
• Leasing service VAT on each installment
• Financial VAT both on principal and
  interest
• Operational VAT on lease installment
• Local supply of goods at the end of the leasing
  contract (if option exercised) VAT on
  residual value.

NEW
6
LOCAL LEASING MOVABLE GOODS

• 3 operations
• Intracommunity acquisition (ICA) in RO / VAT R/C
  
• Leasing - service VAT on each installment
• Local supply at the end of the contract (if
  option exercised)
• VAT on
  residual value.

HU
RO
L LEASING COMPANY
EU SUPPLIER
service
CLIENT
supply of goods
ICD
ICA
NEW
7
LOCAL LEASING MOVABLE GOODS

• 3 operations
• Import by L
• Import duties (import VAT,
  customs duties) at the moment of import
• Leasing service VAT on each installment
• Local supply at the end of the contract (if
  option exercised)
• VAT on
  residual value.

TR
RO
FOREIGN SUPPLIERS (outside EU)
L LEASING COMPANY
service
CLIENT
supply of goods
export
import
8
CROSS BORDER LEASING MEANS OF TRANSPORT

• 3 operations
• Leasing - service (except MS where leasing
  supply of goods!)
• always VAT
  of country of origin (HU)
  
• VAT
  registered person refund on 8th Directive,
  subject to limitation in the
• Client
  country
  of origin
• 
  Non-registered person no refund
• If option exercised
• Intracommunity acquisition (ICA) in RO by L / VAT
  R/C
• L registration in RO (L)
• Local supply (no transport)

ROMANIAN CLIENT
NEW
NEW
NEW
9
CROSS BORDER LEASING MOVABLE GOODS EXCEPT MEANS
OF TRANSPORT

• 3 operations
• Leasing - service (except for MS where leasing
  supply of goods!)
• VAT in RO if Romanian
  client is a taxable person
• R/C if Romanian client
  is a VAT registered person
• If option exercised
• Intracommunity acquisition (ICA) in RO by L / VAT
  R/C
• - L registration in RO
• Local supply (no transport)

L
L LEASING COMPANY
service
NEW
10
CROSS BORDER LEASING MEANS OF TRANSPORT

• 3 operations
• Import performed by L
• L registration in RO by FR
• Leasing service
• Always VAT in RO
• Local supply of goods (no transport)

NEW
NEW
11
CROSS BORDER LEASING MOVABLE GOODS EXCEPT MEANS
OF TRANSPORT

• 3 operations
• Import performed by L
• L registration in RO by
  FR
• Leasing service
• VAT in RO if Romanian
  client is a taxable person
• R/C if Romanian client
  is a VAT registered person
• Local supply of goods (no transport)

service
NEW