To recover VAT on a rental purchase, you need a valid VAT bill and the devices purchased must be detectable for commercial purposes. This can be done either by signing the agreement by the company manager or the business manager at the Point of Sale, but the signature of the entity must be VAT for it to work. Yes, you can claim VAT again on a rental agreement, but your company must have registered VAT itself to do so. The agreement must also be entered into under the name of the director of the company or company to prove that it serves a commercial purpose. The VWFs Finanzhaus provided loans to customers who wanted to buy a vehicle. It operated by purchasing the car from the dealership, while providing financing to the customer, representing all of its profits on the delivery of exempt credit. The question was how much VAT could be recovered from overhead. PCPs are a type of lease-purchase, usually for car contracts, which includes for the customer three distinct phases. Phase I – the down payment, which can normally be between 10 and 30% of the value of the car. Phase II – regular monthly repayments spread over the duration of the contract, usually three to five years. Unlike HP`s agreements, the payment of the final amount of the contract is not transferred to the customer. The payment of the final amount leads to Phase III – a choice of three end-of-term options: under HP, ownership of the car is automatically transferred from the financial home to the customer after payment of the last tranche (usually the 36th). The monthly payment consists of two amounts: a capital payment representing the value of the car, plus financing by borrowing.

The first is a non-event for VAT (since VAT has already been accounted for in advance), while the second is exempt from VAT (interest). Financial institutions that supply cars with HP are entitled to a total deductibility for the purchase of cars. The European Court of Justice has considered the impact of exempt loan financing on the financial company`s ability to deduct VAT on overheads related to its HP business, with the precise method of allocating VAT among these costs, which is now at issue with Revenue.