- The qualification of a transaction as a “normal” supply of goods or as a transfer of a business is still a topic of consideration for VAT purposes in Europe.
- There have been inconsistent and sometimes fraudulent case laws on this topic, particularly in Italy.
- The Italian Tax Authorities and tax court have provided contrasting interpretations, creating issues for taxpayers.
- It is crucial to determine whether the assets transferred qualify as a business unit under Italian law.
- EU principles should be referred to in order to correctly address each case from a VAT perspective in Italy.
- In Belgium, it is important to analyze each transaction and confirm the applicable VAT treatment with a ruling.
- In the Netherlands and the UK, the application of the transfer of a going concern VAT exemption depends on whether the nature of the transferred economic activity continues to be the same.
- The EU legislative framework allows member states to consider a transfer of a going concern as not a supply of goods to prevent financial instability for businesses involved.
- The VAT Directive does not provide a specific definition of a transfer of assets, but it includes any transfer of a business or independent part of an undertaking capable of carrying on an independent economic activity.
- The use of the transferred assets by the recipient does not have specific conditions, except that the recipient must be the successor to the transferor.
Source: insightplus.bakermckenzie.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.
