Summary

Countries vary in their legal approach to charging VAT on leasing, mostly subject to whether a specific transaction is treated as the transfer of goods or the provision of services in the national law. The author provides an overview of VAT regulation and the problems encountered in this field in Estonia. The author examines the law in force but also addresses the recent history of charging VAT on leasing. Further, the author outlines the principles adopted in other countries in this issue. In analysing the Estonian law in force, the author brings out shortcomings in primarily the leasing of automobiles and the export and import of leasing. In the context of export and import, the author gives a brief overview of tax jurisdiction disputes which have arisen in the European Union. The author puts forward a proposal to apply the rule of economic property in the taxation of leasing. This would simplify the regulation and help combat different cases of tax evasion which are common at present.