The ECJ has ruled that a sale-and-lease-back agreement can serve as an invoice for VAT
The company incorporated under Slovenian law, RED doo (hereinafter: RED), owned a plot of land and a house. RED wanted to build new buildings on the lot. On November 19, 2007, it entered into a sale-and-lease-back agreement with Raiffeisen Leasing. Under this agreement, Raiffeisen Leasing would purchase the land at a specified price. RED would pay Raifeisen Leasing monthly lease installments until the value of the land and buildings had been paid off. Sales tax was mentioned in the agreement. Raiffeisen Leasing has not issued an invoice. RED believed that the agreement allowed it to deduct the VAT charged. Because RED did not fulfill its obligations under the agreement, Raiffeisen Leasing terminated the agreement and sold the plot of land to third parties.
Source Taxence
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