Fleet News

VAT ruling on registrations

THE European Court of Justice (ECJ) has ruled that European Union (EU) fleet managers importing cars from a foreign EU member state should not have to pay VAT on the cost of registration taxes in the exporting country.

Judges backed ECJ advocate general Juliane Kokott, finding that levying VAT on such fees in an importing country ‘is not covered by the concept of taxes, duties, levies and charges’ in the EU’s sixth VAT directive.

Instead, the purchaser should reimburse the supplier for registration costs net of VAT. The ruling said: ‘The dealer subsequently passes on to that purchaser the amount of the duty he has paid.’

The case focused on VAT problems regarding Denmark car imports, although this ruling is a EU-wide legal precedent.

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