- The General Court held that a contribution of leased real estate to a GmbH can fall within the VAT “transfer of a totality of assets” regime under Article 19 of the VAT Directive, even if no additional shares are issued, provided the transferee continues the taxable activity.
- Austria’s rule limiting the asset-transfer relief to certain income-tax categories (for example, excluding mere property letting activities) was found incompatible with Article 19.
- The Court said Article 19(2) allows only two types of national restriction: to prevent competition distortion where the transferee is not fully taxable, and to prevent tax evasion or avoidance; these grounds are exhaustive.
- The tax authority’s reclassification of the transaction as a taxable exchange in return for shares, and the resulting input VAT adjustment, were therefore not justified under EU law.
Source: assets.kpmg.com
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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