- A city acquired water supply facilities from an old provider and transferred them to a new provider with an obligation to repurchase at the end of the new contract
- This action is considered sustainable according to a court ruling dated September 25, 2024
- Under EU law compliant interpretation, a public legal entity like the city is considered an entrepreneur if it performs economic activities for remuneration on a private law basis
- The case in question was whether the transfer of the water supply network was a business transfer under specific tax law and if the tax office must agree to a billing correction
- The city’s company entered into a water supply contract with another organization starting April 1, 2003, after terminating a previous contract in 2001
- The company sent a letter to the city on May 12, 2003, showing VAT amounting to 1,656,466.62 euros
- After an external audit in 2007, the tax office deemed the supply of water facilities to the city as taxable and the letter as a bill under tax law
- In 2010, the company issued a new invoice to the city reducing the VAT shown and later presented a corrected invoice in 2017 with no VAT shown after a tax office suggestion
- The lower court dismissed the claim in both the first and second trials, ruling that the city was the recipient of the supply and denied reclassifying the transaction as a non-taxable business transfer because the city was not considered an entrepreneur
Source: datenbank.nwb.de
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.
