However, cars paid for in cash or by loan will no longer be exempted from VAT, except in certain conditions, such as cars used for emergency intervention, repairs, security, express delivery, TV broadcasting, by sales agents and for personnel recruiting.
Furthermore, car dealers and leasing companies will also be allowed to deduct VAT. The Official Gazette states that VAT is not deductible for vehicles used for passenger road transportation, weighing up to 3,500 kilograms, with no more than nine seats, including the driver seat.
Exceptions to this rule are cars The measure is not applied to down payments paid prior to 1 May 2009, if the cars are delivered after the new measures are enforced. Lawyer Gabriel Biris, a taxation expert, said that this measure has a narrow area of applicability and is not likely to impact on the auto industry or companies.
The Financial Companies Association (ALB) announced that it would issue a recommendation for leasing companies, so that changes to the Fiscal Code are properly understood and applied, to be finalized before the Fiscal Code goes into effect on 1 May.
