Fleet News

French face action over VAT rebates

THE European Commission is taking legal action against France to allow fleet training companies to claim VAT rebates on the cost of their vehicles. French law forces companies to pay VAT on vehicles unless they are used solely for training purposes, but the EU says this goes against its rules.

It has taken French authorities to the European Court of Justice to force them to comply and warned that if they did not yield there are potential fines of about £70,000 a day until VAT rebates are allowed. The Commission said: 'French legislation requires that vehicles used for instruction be assigned exclusively for that purpose, but such a condition is not laid down. This restricts the right to deduct, which is one of the fundamental principles of the VAT system.'

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