Article in EU VAT Directive 2006/112/EC
Article 19 (Taxable transaction – Transfer of Going Concern)
In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.
Member States may, in cases where the recipient is not wholly liable to tax, take the measures necessary to prevent distortion of competition. They may also adopt any measures needed to prevent tax evasion or avoidance through the use of this Article.
(Article 5(8) of the Sixth VAT Directive)
ECJ Cases Decided
- C-408/98 (Abbey National plc) – Costs of the transferor for the services related to TOGC form are directly and immediately related to the entire economic activity
- C-497/01 (Zita Modes) – TOGC covers intention to operate the business or the part of the undertaking transferred and not simply to immediately liquidate the activity concerned and sell the stock
- C-137/02 (Faxworld) – Right to deduct VAT for preparing taxable activities of another person
- C-444/10 (Schriever) – TOGC includes rental for indefinite period of the retail space to the transferee
- C-651/11 (X BV) – The transfer of 30% of the shares in a BV for which the transferor provides VAT-taxed services does not constitute a Transfer of Going Concern
- C-17/18 (Mailat – Apcom Select) – TOGC, a lease of immovable property and related equipment and consumables constitute a single rental service
- C-729/21 (Dyrektor Izby Administracji Skarbowej w Łodzi)- Order – Sale of real estate can be considered as a Transfer of Going Concern
ECJ Cases Pending
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