Judgment of the Court (First Chamber) of 4 October 2017 (request for a preliminary ruling from the Court of Appeal (England & Wales) (Civil Division) — United Kingdom) — Commissioners for Her Majesty’s Revenue & Customs v Mercedes-Benz Financial Services UK Ltd
(Case C-164/16) 1
(Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Article 14(2)(b) — Supply of goods — Motor vehicles — Finance lease with an option to purchase)
Language of the case: English
Referring court
Court of Appeal (England & Wales) (Civil Division)
Parties to the main proceedings
Applicant: Commissioners for Her Majesty’s Revenue & Customs
Defendant: Mercedes-Benz Financial Services UK Ltd
Operative part of the judgment
The words ‘contract for hire which provides that in the normal course of events ownership is to pass at the latest upon payment of the final instalment’, used in Article 14(2)(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, must be interpreted as applying to a leasing contract with an option to purchase if it can be inferred from the financial terms of the contract that exercising the option appears to be the only economically rational choice that the lessee will be able to make at the appropriate time if the contract is performed for its full term, which it is for the national court to ascertain.
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1 OJ C 191, 30.5.2016.