Source Curia
Decision
Articles 282 to 292 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that, where a supply, to the same purchaser, comprises two items of immovable property, linked by their nature and coming under a single contract of sale, and the annual turnover limit serving as a reference for the purposes of applying the special scheme for small enterprises provided for by that directive is exceeded, the taxable person is required to pay tax on the basis of the value of the entire supply in question, that is to say, taking into account the value of both the items of property being supplied, even where taking into account the value of one of those items would not lead to that annual limit being exceeded.
Details
Small business scheme – Simultaneous delivery of two real estate in a single transaction – Exceeding maximum annual turnover in view of the sale price of one of two goods
Jarmuškienė has bought a parcel of land for agricultural purposes in co-ownership with another natural person and obtained a building permit. A house and two rural tourism buildings were subsequently built on the purchased plot. Later Jarmuškienė and the co-owner sold the house and part of the land.
Following a VAT audit, the Lithuanian tax authorities established that the transaction in question was not incidental or occasional, but that Jarmuškienė was engaged in an economic activity. According to that tax authority, it should have declared VAT calculated on the total amount received from the transaction in question.
The referring court states that it must be clear how the scheme for small businesses is to be interpreted in circumstances such as those at issue in which two goods are supplied during the same transaction but where the annual maximum turnover defined in Article 287 of the VAT Directive has been exceeded only because of the delivery of one of these goods.
According to the CJEU, the small business scheme must be interpreted in such a way that when a delivery to one and the same buyer comprises two real estate that are linked by their nature and are covered by one purchase agreement and the maximum annual turnover that serves as a reference for the applicability of the exceeded certain special rules for small businesses, the taxable person must pay VAT on the basis of the value of the supply concerned in its entirety, that is to say, taking into account the value of the two goods to which this supply relates, even if taking into account the value of any of these goods that annual ceiling cannot be exceeded.
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