Should the provision of vehicles to staff members be considered as “a hiring of a means of transport” to a non-taxable person? And, where should these services be taxed for VAT purposes: in the country of the employer or the employee? The European Court of Justice (CJEU) recently ruled that the provision of a vehicle to an employee should be considered as a hiring of a means of transport and be taxable in the country of the employee when made against remuneration. Employers providing company cars to their employees residing abroad should examine the impact of this case, as it may imply potential liabilities and additional VAT obligations in other countries and, therefore, an additional administrative burden.
Source Deloitte
