The applicant, Mercedes-Benz Financial Services Ltd, a subsidiary of Daimler AG, proposes three types of standard contracts for the financing of the use of motor vehicles: a standard lease, “leasing”, a “lease” and a lease agreement with the “Agility” purchase option, which combines certain characteristics of the first two types of contracts and allows customers to defer the choice between renting and buying after the vehicle is handed over. and also sets a maximum mileage from which the customer must pay a fine. In this case, it was not disputed that this type of agreement falls under the “service” category, with VAT due on monthly payments. On the other hand, the “Hire Purchase” and “Agility” agreements provide for a transfer of ownership, but on different terms. Under the “lease-sale” agreement, all monthly payments made during the duration of the agreement generally constitute the total sale price of the vehicle, including financing costs. At the end of the contract, a small additional fee must be paid for the purchase of the vehicle. This final payment is included in the agreement and does not depend on the option exercised. Again, it was not disputed that this type of agreement falls under the category of “delivery of goods”, the VAT being due at the time of the delivery of the vehicle. This dispute over the “Agility” agreement, whereby monthly payments are generally lower than those of a “Hire Purchase” agreement, with total rates (including financing costs) accounting for approximately 60% of the selling price of vehicles. If the user wants to use the purchase option, they must pay about 40% of the sale price. This “balloon” payment represents the estimated residual value of the vehicle during the duration of the contract.
Three months before the end of the contract, the customer is asked if he wishes to make use of the option. The decision The applicant argued that the “Agility” agreement should fall into the category of “service”, as VAT is due on monthly payments, as the agreement does not necessarily provide for the transfer of ownership.