Leasing agreements with a residual value guarantee often also include a right for the tenant to receive compensation in cases where the car’s market value at the end of the contract period exceeds the estimated residual value. Such compensation to the lessee is regarded as a credit of previously paid leasing fees, which is why previously deducted input tax must be reduced on the basis of the credit note that the lessor must then issue to the lessee. Normally, the tenant receives the compensation in the form of a refund from the lessor.
If the tenant chooses to buy the car from the lessor, it may happen that the lessor instead deducts the compensation from the sales price. In such a case, the tax base for the sale must include the settled compensation. This is to avoid that the right to deduct part of the tax on the acquisition cost arises as a result of high leasing fees and low residual value, cf. SOU 1994: 120p. 254. This also means that if the sales price is determined, for example, at the residual value and the tenant simultaneously waives his right to compensation, the tax base for the sale of the car must still consist of the sum of the car’s residual value and the compensation that the lessor would otherwise give the tenant. The VAT calculated according to this tax base must be stated in the invoice issued by the lessor to the lessee.
Leasing agreements with a residual value guarantee often also include a right for the tenant to receive compensation in cases where the car’s market value at the end of the contract period exceeds the estimated residual value. Such compensation to the lessee is regarded as a credit of previously paid leasing fees, which is why previously deducted input tax must be reduced in accordance with the lessor’s credit note. If the tenant buys the car, the tax base must consist of the higher market value of the car in order to avoid that the right to deduct part of the tax on the acquisition cost arises as a result of high leasing fees and low residual value.
The leasing car is acquired prematurely
If a tenant buys a car before the rental period according to the contract has expired, he must pay the remaining leasing fees until the end of the rental period. That VAT on the redemption of the leasing contract cannot be considered as leasing fees, but is VAT on the purchase of a car. Because of this, there is no right to deduct VAT on the redemption of a leasing contract that applies to a car unless it is for such use that there is a right to deduct or refund when buying a car.
The leasing car is returned early
The amount that a car rental company receives from the tenant due to the lease being terminated before the end of the contract period is part of the compensation for the service that the buyer has been given the opportunity to benefit from even if the buyer chooses not to do so. VAT is therefore included in the additional compensation.
Acquisition of leasing contract
It happens that a taxable person who leases a car (the lessee), sells his leasing contract. The car is considered to have a surplus value and the buyer is therefore willing to pay to take over the contract. It is then a question of a transfer of a kind of right, a turnover that is taxable.
A taxable person who acquires such a right can neither be considered to buy nor rent a car. The deduction restrictions in ch. 8 §§ 15-16 ML can thus not be applied. However, it may be relevant with a limited right to deduct according to the general rules in ML. Note that when acquiring a leasing contract, it is a matter of acquiring a service, not the acquisition of an investment item. If the acquisition is made partly for private use , the right to deduct must consequently be limited.