Tax & Legal

In two most recently published decisions the Supreme Tax Court commented on the VAT situation in the event of the sale of a business which is not turnover within the meaning of the VAT Act under certain circumstances. The court denied VAT exemption in both cases, namely where - after the sale - the business is continued by the lessee and where facilities in a solar park are transferred to various purchasers while continuing to feed electricity into the grid.

The proceeds from the sale of a self-contained business are not subject to VAT provided the sale includes all assets necessary for the purchaser to continue the operation. In a most recent decision, the Supreme Tax Court held that this only applies to services provided between the transferor and the transferee and does not include transactions that are supplied to third parties.

The Supreme Tax Court has held that the required documentation in support of a tax-free intra-community supply cannot be substituted by other evidence.

The finance ministry has amended its definition of a VAT-free sample to reflect the ECJ judgment C-581/08 EMI of September 30, 2010.

The finance ministry has accepted as a precedent a Supreme Tax Court ruling that a payment to a motor car dealer for an extended warranty is subject to VAT.