taxud/2414/08 - European Commission - Europa

involving a financing element, payment by instalments or an allowed period for payment
for the supply of services and goods are a part of the remuneration for the services or
goods and not available separately. For the customer of the goods or services they
usually do not constitute an aim in themselves;
(b)
the grant of credit in connection with hire purchase and lease purchase
arrangements where the consideration for that credit constitutes an integral part
of the consideration for the hire purchase and lease purchase;
This is an implementing provision to Article 135 (1c) stipulating that where the supply of
goods or services includes the granting of credit which is not set out separately, the grant
of credit shall not be a distinct service exempted under Article 135 (1) (b) of Directive
2006/112/EC and to Article 135a (2) of that same Directive.
Hire purchase services usually apply in cases where a buyer cannot afford to pay the
asked price for an item of property as a lump sum but can afford to pay a percentage as a
deposit; a hire-purchase contract allows the buyer to hire the goods for a monthly rent.
When a sum equal to the original full price plus interest has been paid in equal
instalments, the buyer may then exercise an option to buy the goods at a predetermined
price (usually a nominal sum) or return the goods to the owner. Also in these cases the
financing element remains for the client an invisible part of the remuneration which he
pays either for becoming the owner of the goods at the end of the contract or for hiring
the goods; this financing element is not available separately and therefore does not
constitute an aim in itself for him;
Lease purchase is a method of financing, similar to hire purchase, via a finance company,
normally for a vehicle. Instead of spreading the whole payment over several years, there
is a short term lease, followed by an option to buy. There is also sometimes an initial
deposit. The monthly payment is determined by the sale price of the vehicle, the amount
of any deposit paid, the period of the lease contract plus the proposed annual mileage/
kilometre and the estimated future value of the vehicle at the end of the term. An optional
payment equivalent to the estimated future value is payable at the end of the contract, at
which time the vehicle becomes the property of the lessee. In some cases the lease
purchase contract anticipates at the outset that title will pass after the period of leasing; in
other cases the transfer of ownership is left optional. In all these cases the financing
element remains for the client an invisible part of the remuneration which he pays either
for becoming the owner of the goods at the end of the contract or for hiring the goods;
this financing element is not available separately and therefore does not constitute an aim
in itself for him;
(c)
the provision of debit and prepaid card services.
Debit card services cover scenarios where funds are directly withdrawn from the card
holders monetary account when the debit card is used for the acquisition of goods or
services; in most cases it also allows the card holder also to withdraw himself cash from
his monetary account. Such card services do not provide for a lending of money;
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