Commentary

V3.537 Input tax scheme for motor cars on which input tax was irrecoverable

Part V3 Supplies, acquisitions and imports

V3.537 Input tax scheme for motor cars on which input tax was irrecoverable

V3.537 Input tax scheme for motor cars on which input tax was irrecoverable

The input tax scheme was devised to allow a taxable person, who was unable to recover VAT charged on the supply (including self-supply1), purchase, acquisition or importation of a motor car2 (henceforth referred to as a “relevant car”), to account for VAT on the profit margin3 (if any) of any subsequent supply, thus avoiding double taxation.

In the case of EC Commission v Italian Republic4, the ECJ ruled that, by enacting and maintaining in force legislation which did not exempt from VAT supplies of goods excluded from the

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