KEY POINTS
- Lennartz accounting is an ECJ principle.
- Practical issues dealt with in subsequent cases.
- Application where there is both taxable and exempt use is still to be decided.
So-called 'Lennartz' accounting is the system of accounting for VAT on the use of capital goods purchased in part for business and part for non-business.
The name Lennartz derives from the case of the same name brought by a German taxpayer back in 1985. It concerned Mr Lennartz' right to claim deduction of VAT incurred on a vehicle used both for the purposes of his business and for personal private use.
The German government argued that Mr Lennartz was not entitled to initial deduction because he did not immediately apply those goods to business use or that the initial business use was minimal.
The ECJ ruled that it was the capacity in...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.