Recently, the European Court of Justice (ECJ) delivered its judgment in Eon Aset Menidjmunt OOD v Direktor na Direktsia ‘Obzhalvane i upravlenie na izpalnenieto’ (C-118/11) which (save for capturing the attention of a few VAT practitioners) went largely unnoticed in the United Kingdom. This may have been due to many reasons – the value of the Bulgarian VAT at stake was modest at best, the primary issue on which the court’s ruling was required related to the deductibility of VAT paid in respect of leases of cars to transport employees (which is an area of VAT littered with cases of a routine nature often of limited significance beyond the boundaries of the case in question); or perhaps it is the impenetrable English pronunciation of the Bulgarian tax authority that prevented many of us from daring to delve deeper into the case.

Nonetheless, it is worth noting the significance of this case, for hidden away somewhat innocuously in the ‘preliminary considerations’ section of the judgment is an important determination of the ECJ that may have a far-reaching impact on how finance leases are treated for the purposes of VAT in the European Union including the UK.

Please see full article below for more information.