- The A&P Deco case clarifies that transferring a business (under Belgian VAT Code Article 11) while leasing back the premises (VAT-exempt) can trigger a VAT adjustment for the transferor on previously deducted real estate VAT, even if the business activity continues.
- The General Court ruled that the VAT adjustment is assessed at the transferor’s level due to a change from taxable use to exempt leasing, and a newly created lease right is not considered part of the transferred totality of assets.
- This judgment emphasizes that economic continuity does not automatically equate to VAT continuity, and the VAT implications of assets remaining with the transferor and their subsequent use must be analyzed separately, with structuring options like VAT-taxable leasing or VAT groups potentially mitigating adjustments.
Source: vat-consult.be
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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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