Reform of the tax regime for leasing through tax-transparent groupings ("tax lease")

Article 77 of the 2006 amending Finance Act repeals Article 39 CA of the General Tax Code (approval regime for "tax EIGs", whose compatibility with EU law was challenged by the European Commission) and creates a section II in Article 39 C. For assets leased by a partnership, co-ownership or grouping and located or operated in the European Economic Area, deductible depreciation is limited, for thirty-six months, to three times the rent, and losses of the first twelve months may offset up to a quarter of the members' profits. For assets outside that area, depreciation is limited to the rent minus other charges. The regime applies to contracts concluded from 1 January 2007.