- The CJEU held that a free transfer of a business to two daughters, each receiving a 1/2 share, is not a transfer of “all or part of assets” under Article 19 of the VAT Directive, even if they later contribute those shares to a partnership and continue the business.
- The VAT exemption for transfers of a business must be interpreted narrowly and based on the actual legal and economic steps taken, not just the ultimate business outcome.
- The Court treated the donation and the later contribution in kind as two separate transactions, so they cannot be automatically merged into one non-taxable transfer.
- As a result, the Polish VAT exclusion for transfer of an enterprise or an organized part of an enterprise does not apply merely because the business will eventually be consolidated into another entity.
Source: mddp.pl
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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