The concept of “leasing agreement” has no unambiguous definition under EU law and the question regularly arises in which circumstances leasing agreements should be treated as “hire purchase” in the sense of article 14(2) of the VAT Directive, hence be treated as supplies of goods and not services. In this article, the author discusses the recent ECJ decision in the case of Mercedes Benz Financial Services UK, which appears to put an end to the discussion within the European Union. The author also compares the situation in the European Union with the current state of the law in Australia.