On 28 May 2025, the Austrian Supreme Administrative Court (VwGH) submitted a request for a preliminary ruling to the European Court of Justice (ECJ) in case Ro 2024/13/0020, seeking clarification on the VAT implications of non-material contributions of real estate to a corporation.
Background
The case involves a sole proprietor who transferred business-used real estate to a corporation in which he is the sole shareholder, without receiving additional shares or consideration. The real estate had previously been used for VAT-taxable rental activities, entitling the proprietor to input VAT deduction.
⚖️ Legal Questions Referred
The VwGH posed four key questions to the ECJ:
- Supply for Consideration? Whether the gratuitous transfer of real estate to a wholly owned corporation qualifies as a supply for consideration under Article 2(1)(a) of the VAT Directive (2006/112/EC).
- Withdrawal of Goods? If not a supply, whether the transaction constitutes a withdrawal of goods for non-business purposes under Article 16(1) of the Directive, triggering VAT liability.
- Compatibility with Article 19 Whether Austrian law, which allows tax-neutral treatment only for reorganizations under the UmgrStG, is compatible with Article 19 of the VAT Directive, which provides for non-taxable transfers of going concerns.
- Direct Effect of Article 19 Whether a taxpayer can invoke Article 19 directly before national courts to claim VAT exemption, even if Austrian law does not provide for such treatment outside reorganizations.
Implications
This case could have far-reaching consequences for:
- VAT treatment of intra-group asset transfers
- Input VAT adjustments under Section 12(10) of the German VAT Act
- The scope of Article 19 and its direct applicability in Member States
A ruling in favor of broader exemption could expand the availability of tax-neutral transfers, especially for real estate contributions in corporate structuring.
Source gv.at
See also
- Join the Linkedin Group on ECJ/CJEU/General Court VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
