- The EU General Court case T-366/25 concerns whether a transfer of a business can be treated as VAT-neutral under Article 19(1) of Directive 2006/112/EC.
- The rule is meant to simplify business transfers and avoid financing costs for the recipient, but it must not be applied in a way that lets non-deductible taxpayers escape VAT, contrary to fiscal neutrality.
- The key issue is whether a business transfer routed through intermediaries or successive transfers can still qualify as a single “transfer of a totality of assets” for VAT purposes.
- In the case at hand, the court considered that each step was separate: the daughters each received 50% and could independently decide whether to transfer the business onward, so the second transfer did not condition the first.
- The article suggests that, on these facts, the interposed transfer structure may prevent application of the VAT exemption/continuity rule for a transfer of going concern.
Source: eutekne.info
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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