Keywords

Summary



Keywords

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable amount – Supply of goods – Option for Member States to exclude the transfer of a totality of assets or part thereof

(Council Directive 77/388, Art. 5(8))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable amount – Supply of goods – Transfer of a totality of assets or part thereof

(Council Directive 77/388, Art. 5(8))

Summary

1. In order to find that there has been a transfer of a business, or of an independent part of an undertaking, for the purposes of Article 5(8) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes, all the elements transferred must, together, be sufficient to allow an independent economic activity to be carried on.

Where an economic activity does not require the use of particular premises or of premises equipped with fixtures necessary for the pursuit of the economic activity, there may be a transfer of a totality of assets for the purposes of Article 5(8) of the Sixth Directive even without the transfer of property in an immovable asset. However, where the very nature of the economic activity entails the use of an indivisible bundle of movable and immovable property, such a transfer cannot be considered to have occurred if the transferee has not taken possession of the business premises. In particular, if the business premises are equipped with fixtures necessary for the pursuit of the economic activity, these immovable items must form part of the elements transferred in order for the transaction to qualify as the transfer of a totality of assets, or of a part thereof, for the purposes of the Sixth Directive. A transfer of assets may also take place if the business premises are made available to the transferee by means of a lease, or if the transferee itself has appropriate premises to which all of the goods transferred can be moved and where the transferee may continue to carry on the economic activity concerned.

Furthermore, matters such as the duration of the lease granted and the procedure agreed for terminating it must be taken into account in an overall assessment of the transaction transferring the assets, again for the purposes of Article 5(8), given that they may have a bearing on that assessment if they could make it impossible to carry on the economic activity on a lasting basis. However, being able to terminate a lease of indefinite duration by giving short term notice does not of itself decisively support the inference that the transferee intended immediately to liquidate the business, or the part of the undertaking, transferred. Accordingly, application of Article 5(8) of the Sixth Directive cannot be refused on that ground alone.

(see paras 25, 27-29, 42-43)

2. Article 5(8) of the Sixth Directive on the harmonisation of the laws of the Member States relating to turnover taxes must be interpreted as meaning that there is a transfer of a totality of assets, or a part thereof, for the purposes of that provision, where the stock and fittings of a retail outlet are transferred concomitantly with the conclusion of a lease, to the transferee, of the premises of that outlet for an indefinite period but terminable at short notice by either party, provided that the assets transferred are sufficient for the transferee to be able to carry on an independent economic activity on a lasting basis.

(see para. 45, operative part)