A company performing as its principal activity the rental of ski equipment and the sale of sports goods in stores operated under different brands has been audited and the FTA issued tax reassessments relating to the insurance and transport services pro-vided in addition to the main leasing activity, pursuant to article 267, I-2° of the FTC.
Based on the well-established line of reasoning deriving from CJEU case law, the Court rejected this analysis. It notably pointed out that these two services are optional and may be provided by other operators. Insofar as they are not essential to the equipment leasing main activity, they become an end in themselves for the customers. The mere fact that such services are not offered apart from the equipment leasing is not sufficient to establish that they would objectively form a single economic operation. The Court upheld the company’s position which had not applied VAT on the insurance benefit and had applied the VAT reduced rate to the passenger transport services.
Although this decision appears favourable to the taxpayer, it should be noted that it does not detail the practical conditions for the implementation of these insurance and passenger transport services related to the equipment leasing. Up to date, no appeal to the Conseil d’Etat has been filed.