Leasing companies ask EC to start infringement procedure

Leasing companies will continue to notify the European Commission (EC) about the incorrect enforcement of the VAT Directive’s provisions and to ask it to start the infringement procedure despite the fact that the Romanian Ministry of Finance has issued a communiqué in which it shows that the VAT regime for leasing operations does not go against the European Union legislation, ‘Financiarul’ daily informs. According to the Ministry of Finance, the national VAT legislation is favorable towards leasing companies when compared to other member states’ legislation since leasing contracts are considered service contracts. Consequently, leasing companies do not collect VAT for the whole value of the good at the start of the contract, instead doing that gradually as it collects installments from customers. Adriana Ahciarliu, secretary general of the Financial Companies Association – ALB Romania, states that at local level leasing is treated as a financial service and does not fall in the category of service contracts. “We are obviously continuing the process of notifying the European Commission. I don’t expect to see the Finance Ministry coming up with technical details in order to explain why it is right. In Romania the leasing law treats leasing as a financial service, not as a service contract. The Ministry cannot come out and say that leasing will be treated differently during a certain period just because doing that puts it at an advantage from the point of view of budget revenues,” Adriana Ahciarliu explained.

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