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Abstract
The international VAT implications for lessors and lessees entering into asset finance deals on a cross border basis are examined. This may mean that the parties to the deal are in different countries with the assets perhaps in a 3rd country. But it may also mean that the assets themselves are moved across borders. Whoever you are within the deal, you will be affected by VAT and will need to understand the rules and its implications. With more emphasis on global contracts and lessees specifying that goods be delivered into a range of countries, the need to understand the international rules is becoming increasingly important. Not only do lessors need to understand the rules so that they can comply, but they also need to understand the rules so that they can structure the deal in the best way for their customer. While the intention of the EC 6th VAT Directive is to harmonize the approach to VAT, the application of the law is far from harmonized.