If the user decides to purchase the car previously used after the termination of the rental agreement, the user is entitled to a new deduction limit. This is due to the fact that the sale/sale contract is treated by the tax authorities as a separate agreement from the lease agreement. In this case, the user is allowed to deduct VAT on the invoice that documents the purchase up to 60% of the tax collected, but no more than 6,000. Abu Dhabi law does not clearly distinguish between a rental contract (a personal right) and a usufruit (a real right). Although the law provides that long-term leases (longer than 25 years) are property rights, it does not make it clear that the characteristics of leases with shorter terms than these are defined. In practice, Abu Dhabi Municipality (ADM) considered leases of more than four years for the benefit of a non-EMIRATS national (or a company owned in whole or in part by a non-MEMBRE NATIONAL of the United Arab Emirates) in relation to land outside an investment zone that includes sublease rights as usufruit rights (and are therefore unable to grant to a non-EMIRATS national outside an investment zone). Leases (or short-term leases) have a maximum term of three years. The tenant waives the protection of the mandatory scheme for commercial tenancy agreements. Any renewal of the lease agreement must be carried out under the terms of a normal commercial lease agreement. For the referring court, it is not certain that the terms of the Agility lease agreement constitute, in this case, a regular lease agreement with the option to purchase at the end of the lease (as a rental service from the point of view of VAT during the agreed lease period). Furthermore, the agility agreement should be regarded as a lease agreement which, from the point of view of VAT, considers that a delivery of goods is carried out, the VAT being due on the total sale price assumed at the beginning of the agreed period.
This provision governs cases where the primary purpose of the insured`s activity is the resale or transfer to the paid use of vehicles (vehicles) under leases. This means that cfm companies have the right to deduct the total amount of VAT when buying a particular car. Other companies that do not meet the above condition are allowed to deduct VAT, in accordance with the above principles, when purchasing vehicles and renting.