ECJ has released the preliminary ruling request in the case C-239/22 (Belgian State and Promo 54).
Articles in the EU VAT Directive
Articles 2, 9(1), 12, 14, 135(1)(j) of the EU VAT Directive 2006/112/EC
Article 12 (Taxable persons)
1. Member States may regard as a taxable person anyone who carries out, on an occasional basis, a transaction relating to the activities referred to in the second subparagraph of Article 9(1) and in particular one of the following transactions:
(a) the supply, before first occupation, of a building or parts of a building and of the land on which the building stands;
(b) the supply of building land.
2. For the purposes of paragraph 1(a), ‘building’ shall mean any structure fixed to or in the ground.
Member States may lay down the detailed rules for applying the criterion referred to in paragraph 1(a) to conversions of buildings and may determine what is meant by ‘the land on which a building stands’.
Member States may apply criteria other than that of first occupation, such as the period elapsing between the date of completion of the building and the date of first supply, or the period elapsing between the date of first occupation and the date of subsequent supply, provided that those periods do not exceed five years and two years respectively.
3. For the purposes of paragraph 1(b), ‘building land’ shall mean any unimproved or improved land defined as such by the Member States.
Article 135 (Exemption)
1. Member States shall exempt the following transactions:
(j) the supply of a building or parts thereof, and of the land on which it stands, other than the supply referred to in point (a) of Article 12(1);
Facts
- Groupe Henova, currently known as Promo 54, in partnership with Immo 2020, has developed a real estate project to convert a former college into apartments and offices.
- As a result of these activities, a cooperation agreement was concluded between Groupe Henova and Immo 2020 on June 6, 2008, under which Immo 2020, the owner of the land and the old building, entrusted Groupe Henova with the responsibility for the preparation and investigation of the real estate files, as well as for the supervision of the construction site, the coordination of the activities of the various companies, the negotiation of commercial contracts, the takeover all subcontractors and the real estate sale of the property, followed by the deed of renunciation of the right of accession of Immo 2020 in favour of Groupe Henova of February 18, 2009.
- For each of the purchasers, the same pattern as described above was followed as follows for the spouses […]: on 20 December 2008, [the spouses […] signed a hope purchase for an amount of EUR 297 105,68. On February 20, 2009, a private contract is concluded between Immo 2020 and the spouses […] for the conversion of a former school building with land, and on the same day between the spouses […] and Groupe Henova, by virtue of which the latter undertook to carry out the renovation work for the sum of EUR 259 533,52, including value added tax, namely EUR 231 738,50 for the improvements to the apartment, excluding value added tax (VAT) of 6 %, and EUR 11 480,01 for the construction of a garage, excluding VAT at 21 %; from March 2009 to May 2010 and 8 July 2009 an authentic deed of sale signed between the spouses […] and, on the one hand, Immo 2020 for the land plot and the old building, and between Groupe Henova for the apartment and garage, for a total price of EUR 276 615,89, of which EUR 231 738,50 was for the apartment.
- The État belge takes the view that the transaction was artificially divided in order to obtain an abusive tax advantage, and is not the sale of a plot of land with a house frame followed by renovation, which is subject to a reduced rate of 6 %, but a single transaction for the supply of new flats, which is subject to VAT at 21 %.
Questions
Are Article 12(1) and (2) and Article 135(1)(j) of Council Directive 2006/112/EC of November 28, 2006 on the common system of value added tax to be interpreted as meaning that, where a Member State has not defined the procedure for applying the criterion of first use to the conversion of buildings, the supply following the conversion of building which, before the conversion, was first used, wuthin the meaning of Article 12(1)(a) of the third subparagraph of Article 12(2) of the Directive, is still exempt from value added tax?
Source
