General Court VAT case T-851/25 (Roenes) – Questions – Transfer of a Totality of Assets: Economic Continuity vs. Supplier Intention

The General Court of the European Union has released the preliminary ruling request in the case T-851/25 (Roenes).

Context:

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Summary

• The case concerns whether the sale of a leased residential apartment complex—originally an office building converted by X BV—qualifies as a “transfer of a totality of assets” under Article 19(1) of the VAT Directive and the corresponding Dutch provision, Article 37d of the VAT Law.
• X BV treated the 2017 sale of the let complex as a non‑supply, arguing the transfer of a leasing business; Dutch tax authorities disagreed, treating X BV as a property developer that never intended long‑term exploitation and therefore subjecting the sale to VAT.
• The referring court asks whether Article 19(1) can apply when the asset is used solely for VAT‑exempt activity (dwelling rental under Article 135(1)(l)), especially since Article 136(a) already provides VAT exemption for such goods used exclusively for exempt activities.
• If Article 19(1) applies, the court seeks clarification on whether it is enough that the property is let and transferred in its let state, enabling the buyer to continue an economic activity, or whether the vendor’s intention (e.g., developing solely for sale rather than long‑term letting) is also decisive.
• The referral highlights uncertainty in CJEU case‑law on whether intention-based criteria matter for the transfer‑of‑assets test and notes the relevance for many similar Dutch cases, prompting two preliminary questions to the Court of Justice.

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Facts and Background

1. Origin of the property and development

 

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Article in EU VAT Directive 2006/112/EC

Article 19

Article 19
In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.
Member States may, in cases where the recipient is not wholly liable to tax, take the measures necessary to prevent distortion of competition. They may also adopt any measures needed toprevent tax evasion or avoidance through the use of this Article.

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Question

• Does the first paragraph of Article 19 of the 2006 VAT Directive extend to the supply of immovable property (residential apartment complex) which is used solely for an economic activity exempted under Article 135 of the 2006 VAT Directive (in this case, letting as referred to in Article 135(1)(l) of the 2006 VAT Directive), where the vendor has not enjoyed the right to deduct in respect of that immovable property and that supply is therefore already exempt under
  Article 136(a) of the 2006 VAT Directive and, if not, does the first paragraph of Article 19 of the 2006 VAT Directive extend to the supply of immovable property (residential apartment complex) where that supply is exempt under Article 135(1)(j) of the 2006 VAT Directive?
• If the first paragraph of Article 19 of the 2006 VAT Directive extends to the supply referred to in Question 1, is it then sufficient for the application of that provision that that immovable property is let by the vendor and is supplied in its let state, such that that inseparable whole constitutes an independent economic activity within the meaning of the final sentence of Article 9(1) of the 2006 VAT Directive, or must account also be taken of the intention with which the vendor developed the immovable property and began to let it after completion and the fact that the vendor began actually using it only in order to promote its sale?

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Source

• Curia

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ECJ Cases referred to

• Zita Modes Sàrl (C‑497/01, 27 Nov 2003) — Defines the purpose and scope of Article 19 VAT Directive (transfer of a totality of assets / non‑supply principle) and limits on Member States’ ability to narrow it.
• X BV (C‑651/11, 30 May 2013) — Interprets transfers of leased property and how Article 19 interacts with transactions where the buyer can continue an independent economic activity. Also noted for the interplay with Article 136(a).
• W. sp. z o.o. (C‑729/21, 16 Jan 2023) — Clarifies that the exploitation of immovable property for income on a continuing basis can fall within Article 19 even if not all tangible/intangible elements are transferred.
• Virgil Mailat and Others (C‑17/18, 19 Dec 2018) — Emphasizes an overall assessment of the factual circumstances and the nature of the activity intended to be continued for Article 19.
• Renate Enkler (C‑230/94, 26 Sep 1996) — Foundational on what constitutes “economic activity” and letting as continuous income‑generating activity under Article 9(1) VAT Directive.
• Thomas Fuchs (C‑219/12, 20 Jun 2013) — Factors to assess whether letting is carried out on a continuing basis, feeding into whether there’s an economic activity capable of being transferred.
• Christel Schriever (C‑444/10, 10 Nov 2011) — Focuses on whether the transferred ensemble enables continuation of an independent activity, a key Article 19 criterion.
• Lajvér (C‑263/15, 2 Jun 2016) — Addresses lease duration and continuity, cited for what counts as “on a continuing basis” in property exploitation.
• Floridienne SA and Berginvest SA (C‑142/99, 14 Nov 2000) — Distinguishes occasional exploitation aimed at sale from independent economic activity, relevant to the developer vs investor debate.
• AB SKF (C‑29/08, 29 Oct 2009) — Indicates that Article 19 is not automatically excluded in contexts connected to exempt activities, informing whether the non‑supply principle can apply even where deduction is unavailable.

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• Similar ECJ Cases
• Roadtrip through ECJ Cases – Focus on ”Transfer of Going Concern” (Art.19 EU VAT Directive) – VATupdate

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