The Zeeland-West Brabant Court has ruled that in a sale-and-lease-back arrangement for a fiscal unity, there is no transfer of (part of) a company for value-added tax (VAT) purposes. The case involved a fiscal unity that leased (business) buildings and machinery and the son of the only shareholder and director of the fiscal unity, who was also a shareholder and director of a limited liability company. The limited liability company transferred its movable property to the fiscal unity and charged VAT, which the fiscal unity deducted. The fiscal unity then leased the movable property back to the limited liability company. The inspector challenged the deduction of the VAT by the fiscal unity, arguing that the transfer constituted the transfer of a business. The court ruled that the inspector had not proven that the transfer constituted a transfer of (part of) a company, as the limited liability company continued to operate the transferred assets in exactly the same way as before the transfer. The court ruled that since the movable property was not physically moved in the transfer and the activities of the limited liability company were not changed, it could be concluded that the company had fully continued its economic activity/business and thus had not transferred part of it. Therefore, the court ruled that there was no transfer of a (part of a) company to the fiscal unity within the meaning of Article 37d of the VAT Act.
Source: accountancyvanmorgen.nl
