- The EU Court ruled that VAT input tax on work done to property must be adjusted if the property later becomes used for VAT-exempt rental, even if the business is transferred to the tenant.
- In the case, a Belgian company deducted VAT on renovations to buildings used in its taxable gardening business, then sold its business and leased those same buildings to the buyer under an exempt lease.
- The court held that the right and duty to rectify the deduction stays with the original taxpayer who claimed it, not with the transferee.
- The fact that the business transfer was outside the scope of VAT did not prevent the adjustment, because the property changed from taxable use to exempt use.
- The ruling confirms that VAT correction rules apply to protect VAT neutrality when the use of investment goods changes after the initial deduction.
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.
Latest Posts in "Italy"
- Simplified VAT Refund Procedure for Companies in Simplified Accounting
- EU B2C Electronic Services VAT Rules and OSS
- Even if Goods Leave First State, Triangular VAT Exemption Can Be Denied
- Advance Notice to Join Special Arrangement Regime for Import VAT
- VAT: Business Transfer via Donations and Partnerships Not a Single Transaction
