Supply of services vs. delivery of goods

1. 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 Supply of services vs. delivery of goods

2. Current treatment Cross-border leasing + option to buy => importation by the beneficiary EU Accession Cross-border leasing + option to buy => 1)within the Community Intra-Community acquisition by the leasing company Obligation to register for VAT purposes 2) with parties outside the Community Importation Cross border leasing

3. 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 Place of supply

4. 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) Compliance

5. ROMANIA L – LOCAL LEASING COMPANY service LOCAL SUPPLIER ROMANIAN CLIENT supply of goods 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 HU RO 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. L – LEASING COMPANY EU SUPPLIER service CLIENT supply of goods ICD ICA NEW

7. LOCAL LEASING – MOVABLE GOODS TR RO 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. FOREIGN SUPPLIERS (outside EU) L – LEASING COMPANY service CLIENT supply of goods export import

8. HU RO L’ L – LEASING COMPANY service EU SUPPLIER supply of goods CROSS BORDER LEASING – MEANS OF TRANSPORT ROMANIAN CLIENT 3 operations: • Leasing - service (except MS where leasing = supply of goods!) always VAT of country of origin (HU) VAT registered personrefund on 8th Directive, subject to limitation in the Client country of origin Non-registered personnorefund If option exercised: • Intracommunity acquisition (ICA) in RO by L / VAT R/C L registration in RO (L’) • Local supply (no transport) NEW NEW NEW

9. HU RO MOVABLE GOODS (except for means of transport) ROMANIAN CLIENT supply of goods CROSS BORDER LEASING – MOVABLE GOODS EXCEPT MEANS OF TRANSPORT L’ L – LEASING COMPANY service 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) NEW

10. TR RO L’ L – LEASING COMPANY service MEANS OF TRANSPORT ROMANIAN CLIENT supply of goods 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. TR RO L’ MOVABLE GOODS (except for means of transport) ROMANIAN CLIENT L – LEASING COMPANY supply of goods CROSS BORDER LEASING – MOVABLE GOODS EXCEPT MEANS OF TRANSPORT service 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) NEW