ECJ C-931/19 (Titanium) – Judgment – No fixed establishment if the owner of the property does not have his own staff

On June 3, 2021, the ECJ issued its decision in the case C-931/19 (Titanium).

Articles in the EU VAT Directive

Articles 44 and 192a to 205 (in particular, Articles 192a, 193, 194, 196)

Article 44 (Place of supply of services – B2B)
The place of supply of services to a taxable person acting as such shall be the place where that person has established his business. However, if those services are provided to a fixed establishment of the taxable person located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the taxable person who receives such services has his permanent address or usually resides.

Article 192a (Liability to pay VAT)
For the purposes of this Section, a taxable person who has a fixed establishment within the territory of the Member State where the tax is due shall be regarded as a taxable person who is not established within that Member State when the following conditions are met:
(a) he makes a taxable supply of goods or of services within the territory of that Member State;
(b) an establishment which the supplier has within the territory of that Member State does not intervene in that supply.

Article 193
VAT shall be payable by any taxable person carrying out a taxable supply of goods or services, except where it is payable by another person in the cases referred to in Articles 194 to 199b and Article 202.

Article 194
1. Where the taxable supply of goods or services is carried out by a taxable person who is not established in the Member State in which the VAT is due, Member States may provide that the person liable for payment of VAT is the person to whom the goods or services are supplied.
2. Member States shall lay down the conditions for implementation of paragraph 1.


The applicant is a company which has its registered office and management in Jersey and which is active in the real estate, asset management and housing and housing sectors. She has owned a property in Austria since 1995, which she leased to two domestic entrepreneurs under VAT. The turnover generated by the rental was its only domestic income. The applicant had entrusted the management of the property to an Austrian property manager who essentially carried out support and management tasks. The applicant retained the power to take fundamental decisions. The property manager used his own office space and technical equipment for his activities, which were spatially and / or functionally separate from the applicant’s real estate. The tax authorities charged VAT on the services provided by the applicant and ordered the applicant to pay the VAT in question. The applicant challenges that decision by referring to the referring court.


The applicant considers that the property it leases is not a permanent establishment due to the lack of staff and that, in accordance with Article 196 of the VAT Directive, the VAT debt is therefore transferred to the domestic customer. The tax authorities, on the other hand, are of the opinion that a property rented domestically does constitute a permanent establishment in the interior. The referring court has doubts as to the interpretation of the concept of “permanent establishment”, which is why it refers the matter to the Court.


Should the concept of ‘permanent establishment’ be understood to mean that there must always be the deployment of personnel and technical equipment and, therefore, that the service provider’s own personnel must necessarily be present in the establishment, or may, in the specific case of taxable rental of a real estate located in the interior, which only consists of a tolerated use, can this establishment be regarded as a ‘permanent establishment’ without the use of personnel?

AG Opinion



A property which is let in a Member State, in the circumstance where the owner of that property does not have his or her own staff to perform services relating to the letting does not constitute a fixed establishment within the meaning of Article 43 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and of Articles 44 and 45 of Directive 2006/112, as amended by Council Directive 2008/8/EC of 12 February 2008.


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Source Matthias Luther





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