Following an inspection, the Lithuanian tax authorities found that ARVI had incorrectly charged VAT on the sale of a property to Fondas, as Fondas had not yet been identified for VAT purposes at the time of that sale. After the objection was rejected, ARVI appealed and preliminary questions were asked.
According to the ECJ, Articles 135 and 137 of the VAT Directive may make the right of a taxable person to opt to charge VAT on the sale of immovable property subject to the condition that the property is transferred to a taxable person who has already been identified for VAT purposes at the time of the conclusion of the transaction. The seller of immovable property may be required to review the deduction of the VAT paid on that property after being denied the right to opt for taxation on that sale because the buyer did not meet the requirements at the date of this transaction. the conditions for the seller’s exercise of that right.
Source BTW jurisprudentie
See also ECJ C-56/21 (ARVI ir ko) – Judgment – Exemption of a sale of real estate only if buyer is VAT registered