In Gmina Wroclaw (C-604/19), the Advocate General was asked to opine on whether a payment from a usufructuary of a piece of and to the owner of the legal title to the land which resulted in the usufructuary becoming the outright owner of the land, was subject to VAT. The municipality of Wroclaw was of the owner of some land subject to a third-party perpetual usufruct (a civil law concept, similar to the common law concept of a lease) requiring the payment of an annual fee by the usufructuary (akin to a lessee). As part of a reform of the law of property, the usufructuary was able, on payment of a ‘transformation fee’ to consolidate its rights into full property ownership so that it was able to sell the land as well as to use it.
Source: dlapiper.com
