No VAT exemption for fragmented business transfer: Schleswig-Holstein FG ruling (14.3.2024) – Case XI R 12/24.

• No complete business transfer in case of company fragmentation (FG)
• A business transfer is not exempt from VAT if a previously operated business is divided and sold to multiple buyers
• Requirements for a business transfer include the transfer of a business or a separately managed branch of a business in its entirety
• In this case, the acquiring business takes the place of the seller
• The plaintiff operated a solar park and sold parts of it to ten limited partnerships in 2014
• The central infrastructure remained with the plaintiff, while production was carried out by the buyers
• Contracts were made for the buyers to deliver all produced electricity to the plaintiff
• The plaintiff believed these sales were exempt from VAT, but the FG disagreed
• Each transaction involving multiple VAT entities must be evaluated separately for VAT exemption eligibility

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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