Information;Order — ECLI:EU:C:2022:1038
Date: 2022-12-21
Language of the case: Italian
Court formation: Ninth Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling - inadmissible
Origin: Italy

Summary C-250/22 – 1 
Case C-250/22 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
11 April 2022 
Referring court: 
Corte suprema di cassazione (Supreme Court of Cassation, Italy) 
Date of the decision to refer: 
31 March 2022 
Appellant: 
Fallimento Villa di Campo Srl 
Cross-appellant: 
Agenzia delle Entrate 
  
Subject matter of the main proceedings 
Appeal brought before the Corte di cassazione (Court of Cassation, Italy) against 
the judgment delivered by the Commissione tributaria di secondo grado di Trento 
(Trento Tax Court of Second Instance, Italy) by which that court denied the 
appellant the right to deduct VAT paid on purchases and thus assessed an 
additional VAT amount of EUR 416 826.00, plus interest and statutory penalties, 
as being owed by the appellant following the reclassification, for VAT purposes, 
of a real-estate sale as a transfer of a business. 
Subject matter and legal basis of the request 
Compatibility of Article 20 of Decreto del Presidente della Repubblica 26 aprile 
1986, n. 131 (Presidential Decree No 131 of 26 April 1986) (amended by (1) and 
(2) of Article 1(87)(a) of legge 27 dicembre 2017, n. 205 (Law No 205 of 
27 December 2017) and by Article 1(1084) of legge 30 dicembre 2018, n. 145 
(Law No 145 of 30 December 2018)) with Article 5(8) of the sixth Directive 
(77/388/EEC) and with Article 19 of Directive 2006/112/EC. 
EN 
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Question referred for a preliminary ruling 
‘Do Article 5(8) of Directive 77/388/EEC and Article 19 of Directive 
2006/112/EC preclude national legislation such as Article 20 of Presidential 
Decree No 131 of 26 April 1986, as amended by points (1) and (2) of 
Article 1(87)(a) of Law No 205 of 27 December 2017 and by Article 1(1084) of 
Law No 145 of 30 December 2018, which requires that the tax authorities classify 
transactions between parties solely on the basis of the textual information 
contained in the relevant contract and prohibits the use of extrinsic (extratextual) 
information (even if it objectively exists and is proven), with the result that the tax 
authorities are absolutely precluded from proving that an economic supply, 
constituting a transfer of a business, which is in itself indissociable, has in reality 
been artificially broken down into a number of different supplies – multiple 
supplies of goods – and therefore gives rise to a right to deduct VAT where the 
requirements laid down by EU law are not met?’ 
Provisions of European Union law relied on 
- Article 5(8) of Directive 77/388/EEC: 
‘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 in that event the recipient shall be treated 
as the successor to the transferor. Where appropriate, Member States may take the 
necessary measures to prevent distortion of competition in cases where the 
recipient is not wholly liable to tax’; 
- Article 19 of Directive 2006/112/EC: 
‘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.’ 
Provisions of national law relied on 
Decreto del Presidente della Repubblica 26 ottobre 1972, n. 633 (Presidential 
Decree No 633 of 26 October 1972) establishing and regulating value added tax: 
- Article 19, first paragraph: ‘In order to calculate the tax payable pursuant to 
Article 17(1) or the surplus referred to in Article 30(2), the amount of tax paid or 
FALLIMENTO VILLA DI CAMPO 
 
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payable by the taxable person or charged to him or her in respect of goods and 
services imported or purchased in the course of a business, artistic activity or 
profession shall be deductible from the amount of tax on the transactions carried 
out’; 
- Article 2, second paragraph, point b: ‘the following shall not be considered 
supplies of goods: … (b) transfers … relating to businesses or business divisions’. 
Presidential Decree No 131 of 26 April 1986 approving the consolidated text of 
provisions concerning registration tax (‘the TUR’): 
- Article 20: ‘the [registration] tax shall be levied according to the intrinsic 
nature and legal effects of the acts submitted for registration, even if the title or 
the apparent form does not correspond’; the current wording of this provision, in 
the text in force since 1 January 2018, as amended by (1) and (2) of 
Article 1(87)(a) of Law No 205 of 27 December 2017, states that ‘the tax shall be 
levied according to the intrinsic nature and legal effects of the act submitted for 
registration, even if the title or the apparent form does not correspond, on the basis 
of the information that can be inferred from the act in question, disregarding 
extrinsic evidence [emphasis added by the referring court] and related acts, except 
as provided for in the following articles’. 
- Article 40, entitled ‘Acts relating to transactions subject to value added tax’: 
‘for acts relating to the supply of goods and services subject to value added tax, 
the tax shall be levied at a fixed rate. Supplies and services for which the tax is not 
payable under Article 7 of Presidential Decree No 633 of 26 October 1972 and 
those referred to in the sixth paragraph of Article 21 below shall also be deemed 
to be subject to value added tax, with the exception of transactions that are exempt 
under Article 10, numbers 8, 8-bis and 27-quinquies of the same decree. For the 
transactions described in Article 11 of Presidential Decree No 633 of 26 October 
1972, the tax shall be levied on the supply or service not subject to value added 
tax’. 
Succinct presentation of the facts and procedure in the main proceedings 
1 The appellant Villa di Campo Srl is a company operating in the hotel business. 
2 On 14 March 2006, the appellant entered into a contract of sale of immovable 
property with the company Campo Srl, by which it purchased the buildings 
making up the hotel complex included within the Villa Luti property complex, 
including the movable property connected and permanently attached to the 
building structure. 
3 Following an audit by the Guardia di Finanza (Financial Police), the Agenzia delle 
Entrate (the Italian Revenue Agency) reclassified the transaction described in the 
abovementioned contract as a transfer of a business, and therefore subject not to 
VAT (as would be the case with a supply of goods) but rather to registration tax. 
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4 The tax authorities reached this conclusion on the basis of extrinsic information, 
namely information not present in the contractual clauses, acquired during the 
audit by the Guardia di Finanza first and by the Revenue Agency subsequently. 
This relates to the following circumstances: 
- the property complex covered by the sale, consisting of buildings and other 
ancillary facilities (car parks, tennis courts, etc.), constituted a hotel complex prior 
to the sale; 
- several weeks before the sale, the taxpayer company Villa di Campo Srl, the 
purchaser, had also received the equipment and capital goods (furnishings) left in 
the hotel by the seller, Park Hotel Villa Luti Srl; 
- for the first few months of business, the purchaser had actually used those assets 
for the operation of its hotel business, along with 19 rooms located in the property 
covered by the sale, while renovation work on the hotel was in progress; 
- both of the above companies were owned by a sole shareholder of those 
companies. 
5 On the basis of this information, the Revenue Agency denied Villa di Campo Srl 
the right to deduct VAT. Villa di Campo Srl was the company to which the 
property was transferred, with that transfer being classified as a transfer of a 
business by Park Hotel Villa Luti Srl, and as such not taxable for VAT purposes. 
The Revenue Agency then recovered the VAT deducted by Villa di Campo Srl, as 
the transaction did not constitute a supply of goods for the purposes of that tax.  
6 The Commissione tributaria di primo grado di Trento (Trento Tax Court of First 
Instance, Italy) dismissed the appellant’s appeal against that decision. 
7 The appellant brought an appeal against the judgment by that court before the 
Trento Tax Court of Second Instance, which upheld that judgment. 
8 The appellant brought an appeal before the Court of Cassation, the referring court. 
The essential arguments of the parties in the main proceedings 
9 The appellant is alleging an infringement and misapplication of Article 20 of the 
TUR, in that, by upholding the Revenue Agency’s position, the Tax Court 
incorrectly reclassified for VAT purposes the contract concluded with Campo Srl 
as a transfer of a business on the basis of extrinsic information, namely elements 
not appearing in the relevant contract, in breach of the abovementioned article. 
10 The appellant asserts that matters concerning the taxation of the act for the 
purposes of registration tax (which is not at issue here) – and in particular the 
application of the principle of VAT / registration tax alternation laid down in 
Article 40 of the TUR and the power of the Revenue Agency to reclassify the act 
FALLIMENTO VILLA DI CAMPO 
 
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under Article 20 of the TUR – do not affect the classification of the transaction for 
VAT purposes and any power of reclassification by the tax authorities, so there 
should be no conflict between the domestic rules and those of the European 
Union. 
11 The tax authorities refute the arguments raised by the appellant. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
12 To resolve the dispute, the court must ascertain whether the tax authorities are 
able to classify a sale of immovable property as a transfer of a business rather than 
a supply of goods, and thus deny the purchaser of the property the right to deduct 
VAT. 
13 To that end, the referring court has examined the case-law of the Court of Justice 
on transfers of businesses and supplies of goods. 
14 On the basis of that case-law, the transfer of a business or of a part of a business 
corresponds to the transfer of a bundle of tangible and intangible assets, which, 
‘together, constitute an undertaking or a part of an undertaking which is capable of 
carrying on an independent economic activity …’ (judgment of 10 November 
2011, C-444/10, Schriever, paragraph 24). In that judgment, the Court of Justice, 
in examining paragraph 1(1a) UStG, designed to transpose Articles 5(8) and 6(5) 
of the Sixth Directive into German law, held that a transfer of a business included 
the transfer of the stock and fittings of a shop, and as such was not subject to 
VAT. 
15 The reference to a ‘bundle of assets’ highlights the importance of the idea of the 
‘totality’ of the economic transaction: indeed, that transaction may constitute a 
single supply or it may be broken down into several supplies covering the goods 
transferred. 
16 As to the objective view of the financial transaction, namely the goods covered 
by that transaction, the Court of Justice has held that, where an economic 
transaction comprises a bundle of elements and acts, regard must be had to all the 
circumstances in which the transaction in question takes place in order to 
determine whether it gives rise to one or more supplies, stating that, as a general 
rule, each supply must be regarded as a distinct and independent supply. However, 
by way of exception to that general rule, a transaction must not be artificially 
split, so as not to distort the functioning of the VAT system. This is why there is a 
single supply where several elements or acts supplied by the taxable person to the 
customer are so closely linked that they form, objectively, a single, indivisible 
economic supply, which it would be artificial to split (judgment of 4 March 2021, 
C-581/19, Frenetikexito, paragraphs 37 and 38). 
17 The Court then notes the judgment of 19 December 2018, C-17/18, Virgil Mailat 
and Others, a case in which the elements required for the exercise of the economic 
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activity were merely leased without any transfer of ownership. The Court noted, in 
paragraph 23 of that judgment, that ‘making all of these items available does not 
constitute a transfer of a totality of assets or part thereof within the meaning of the 
first paragraph of Article 19 of the VAT Directive’, and then asserted, in 
paragraph 24, that ‘it should nonetheless be noted that, according to the 
observations submitted to the Court, a certain number of movable assets were not 
let but rather sold to the transferee. It ultimately falls to the national courts to 
determine whether those assets alone enabled the transferee to continue to pursue 
autonomously the economic activity in question, or whether the immovable 
property that is the subject of the lease contract in question in the main 
proceedings was equipped with fixtures necessary to pursue that economic 
activity.’ 
18 As for the subjective aspect of the economic transaction, and thus the parties 
undertaking it, the Court of Justice seems, in the judgment of 27 November 2003, 
C-497/01, Zita Modes, to have considered the notion of a business as a 
harmonised concept. The Court stated in paragraph 26 that ‘concerning transfer of 
a totality of assets, a concept of Community law which falls to be interpreted by 
the Court, the Commission argues that the national court must establish whether 
the transferred assets constitute a “totality of assets or part thereof” within the 
meaning of the Sixth Directive, that is, assets capable of being exploited in the 
context of an economic activity’, and then, in paragraph 32, that ‘this 
interpretation is consistent with the purpose of the Sixth Directive, which is to 
determine the basis of VAT in a uniform manner according to Community rules’, 
and therefore (paragraph 33), although ‘as to the assets transferred and the use 
made of those assets by the transferee after the transfer, firstly, the Sixth Directive 
does not include any definition of “a transfer, whether for consideration or not or 
as a contribution to a company, of a totality of assets or part thereof”’. ‘However, 
according to settled case-law, the need for uniform application of Community law 
and the principle of equality require that the terms of a provision of Community 
law which makes no express reference to the law of the Member States for the 
purpose of determining its meaning and scope must normally be given an 
autonomous and uniform interpretation throughout the Community; that 
interpretation must take into account the context of the provision and the purpose 
of the legislation in question’ (paragraph 34). 
19 Still in the judgment in Virgil Mailat (paragraph 25), the Court also emphasised 
the need to consider that ‘the transferee must have had the 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, if any’ (see also Zita Modes, 
paragraph 44) and, in paragraph 26, laid down the principle whereby ‘in that 
regard, it is apparent from the Court’s case-law that the buyer’s intentions can or, 
in some circumstances, must be taken into account in the overall assessment of the 
circumstances of a transaction, provided that they are supported by objective 
evidence’ (see also the judgment in Schriever, paragraph 38). It then emphasised, 
with regard to the case at hand, that ‘even though, in the case in the main 
proceedings, it is not disputed that the lessee pursued for over two years the 
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autonomous economic activity previously carried out by the lessor and … took 
over the employees, kept the same suppliers and honoured the business 
commitments previously entered into by the lessor towards its customers, the fact 
remains that the lessee was never in a position, as such, to liquidate the activity 
concerned, in so far as, not having taken ownership of a large part of the items 
necessary to pursue that activity, it was not entitled to dispose of them’ 
(paragraph 27). 
20 The following conclusions can be drawn from the above: 
- the notion of business or totality is a concept of Union law and must be 
established uniformly in the Member States; 
- this uniform concept meets the need to avoid divergences in the application 
of the VAT system from one Member State to another as regards exemptions; 
- for the purposes of classifying a supply transaction consisting of a single 
supply or multiple supplies as being subject to VAT or not, it is also relevant to 
determine whether the intention is to continue the business activity by means of 
the goods covered by that transaction; 
- that intention may, and in some cases must, be taken into account when 
assessing the overall circumstances of the transaction, provided that it is 
substantiated by objective evidence (a concept that is broader than the concept of 
‘textual information’ referred to in Article 20 of the TUR). 
21 According to the referring court, it seems to follow from the case-law of the Court 
of Justice cited above that the transfer of a business – as an economic transaction 
consisting of a bundle of elements and acts – must be examined taking into 
consideration all the circumstances in which it takes place, in order to determine 
whether it results in one or more benefits. While, in principle, each supply must be 
considered as independent, single and autonomous, as an exception to this rule, a 
transaction cannot be artificially divided into several parts, and a single supply 
must instead be considered to be present when the individual activities comprising 
that supply are so closely connected that they objectively form a single, 
indissociable economic supply, with any division therefore being artificial and 
thus not permitted. 
22 The referring court considers, therefore, that the provisions of Article 20 of the 
TUR – which preclude consideration of extrinsic information for the purposes of 
determining whether the parties have carried out a single transaction or several 
transactions – have the practical effect of completely preventing a verification as 
to whether the division of such transactions is artificial. Thus, even if there is 
objective evidence that could suggest that there is no right to deduct VAT, 
because a single economic transaction has been artificially broken down into 
several supplies, the possibility of contesting the unlawful deduction would be 
excluded. 
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23 According to the referring court, Article 20 of the TUR therefore appears to be 
contrary to EU legislation, as interpreted by the case-law of the Court of Justice. 
24 In providing that the taxation corresponds to a levy on the legal effects of the act 
submitted for registration, without any relevance to extrinsic evidence and related 
acts that lack a textual link to the act itself, the rule seems in fact to exclude the 
possibility, which is admitted and even imposed by the Court of Justice, ‘that the 
intentions of the purchaser can – or, in certain cases, must – be taken into account 
in the course of an overall assessment of the circumstances of a transaction, 
provided that they are supported by objective evidence’ (judgment in Schriever, 
paragraph 39.).