Violation of the Principle of Neutrality – Provision of a Vehicle to an Employee

In this article, the author discusses the strict interpretation of the term “rent” in the ECJ case QM. He analyses the possibility that the transaction is subject to VAT where the customer resides only when the employee pays rent in money, otherwise the transaction would be subject to VAT where the supplier resides. The author considers that it seems inappropriate and against the meaning and purpose of the VAT Directive to tax hiring (rent) of a means of transport differently depending on the existence of a remuneration in money.