Revenue and Customs Commissioners v Mercedes-Benz Financial Services UK Ltd

Value added tax – Supply of goods. The words 'contract for hire which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment', used in art 14(2)(b) of Council Directive (EC) 2006/112 should be interpreted as applying to a leasing contract with an option to purchase if it could be inferred from the financial terms of the contract that exercising the option appeared to be the only economically rational choice that the lessee would be able to make at the appropriate time if the contract was performed for its full term, which it was for the national court to ascertain. The Court of Justice of the European Union so held in a preliminary ruling in proceedings between Mercedes-Benz Financial Services UK Ltd and the United Kingdom Revenue and Customs Commissioners.

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