Cases - Customs & Excise Commissioners v Mirror Group plc
Record details
- Name
- Customs & Excise Commissioners v Mirror Group plc
- Date
- [2002]
- Citation
- ECJ Case C-409/98
- Legislation
- Keywords
- Value added tax - landlord of tenant - new lease - inducement to enter into lease - whether payment of money to enter into lease outside scope of VAT or taxable
- Summary
-
The Mirror Group took a lease of part of a new development and in doing so received a substantial inducement from the landlord. Customs argued that this payment should be VAT-able, but the Mirror Group disagreed. The case was referred to the ECJ. In its judgment, it was explained that the payment of money to enter a lease was outside the scope of VAT, whereas a payment to do something was taxable. The position was referred to the UK courts for final resolution. The difficulty is that the Mirror Group does not know whether to account for VAT, and significant financial differences are therefore possible. Complex contract clauses are required to cover such uncertainties.
It was suggested that the payment could amount to consideration for advertising services, as Mirror Group was effectively an anchor tenant and could attract other tenants into the development.