Slovenia Tax Agency Clarifies VAT Liability on Termination of Financial Leases

The Slovenian Financial Administration Sept. 16 clarified the VAT liability on the termination of a financial lease. The clarification explains that: 1) VAT applies on the value of unpaid installments after the termination of a financial lease whether the leased assets are returned or not; 2) the lessor may document the termination of a contract to reduce the VAT base; 3) VAT base reductions are allowed only when the lessee returns the leased asset and is a final consumer; and 4) VAT applies on the further supply of a seized leased asset by a rightful lessee as an independent transaction. ...