Finanzamt Lüdenscheid v Christel Schriever.
Date: 2011-11-10
20. First of all, it should be observed that the first sentence of Article 5(8) of the Sixth Directive provides that Member States may, in the event of a transfer of a totality of assets or part thereof, consider that no supply of goods has taken place and that the recipient is the successor to the transferor. It follows that, where a Member State has exercised that option, the transfer of a totality of assets or part thereof is not regarded as a supply of goods for the purposes of the Sixth Directive and, accordingly, is not subject to VAT under Article 2 of that directive (see, to that effect, Case C‑408/98 Abbey National  [2001] ECR I‑1361, paragraph 30; Case C‑497/01 Zita Modes [2003] ECR I‑14393, paragraph 29; and Case C‑29/08 SFK [2009] ECR I‑10413, paragraph 36).
21. Under the second sentence of Article 5(8) of the Sixth Directive, Member States may exclude from the application of the no-supply rule transfers of a totality of assets in favour of a recipient who is not a taxable person within the meaning of that directive or who acts as a taxable person only in relation to some of his activities, if this is necessary to prevent distortion of competition. That provision must be regarded as exhaustive in relation to the conditions under which a Member State which makes use of the option provided for in the first sentence of Article 5(8) may limit the application of the no-supply rule ( Zita Modes , paragraph 30).
22. Next, regarding the concept of a ‘transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof’, referred to in the first sentence of Article 5(8) of the Sixth Directive, the Court has observed that this constitutes an independent concept of EU law which must be given a uniform interpretation throughout the European Union. There being no definition of that concept in the Sixth Directive, and no express reference to the law of the Member States, its meaning and scope must be identified in the light of the context of the provision and the purpose of the legislation in question (see, to that effect, Zita Modes , paragraphs 32 to 35).
23. It is precisely in the light of the context of Article 5(8) of the Sixth Directive and the purpose of that directive that the Court has held that that provision is intended to enable the Member States to facilitate transfers of undertakings or of parts of undertakings by making such transfers simpler and by preventing the resources of the recipient from being overburdened by a disproportionate charge to tax which, in any event, would ultimately be recovered through deduction of the input VAT paid ( Zita Modes , paragraph 39).
24. The Court has also held that, in view of that purpose, the concept of a ‘transfer … of a totality of assets or part thereof’ must be interpreted as covering the transfer of a business or of an independent part of an undertaking, including tangible elements and, as the case may be, intangible elements, which, together, constitute an undertaking or a part of an undertaking which is capable of carrying on an independent economic activity, but that it does not cover the simple transfer of assets, such as the sale of a stock of goods (see Zita Modes , paragraph 40, and SKF , paragraph 37).
25. It follows that, 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 the Sixth Directive, all of the elements transferred must, together, be sufficient to allow an independent economic activity to be carried on.
26. The question whether there must be both movable and immovable assets among those elements must be assessed in the light of the nature of the economic activity at issue.
27. 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.
28. However, where the very nature of the economic activity entails the use of an inseparable 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.
31. Moreover, the amount of VAT to be paid on the transfer of a business or a part thereof is likely to constitute a particularly heavy burden on the transferee in relation to the resources of the business concerned, even where the totality of assets transferred includes no immovable property. It is therefore consistent with the purpose of Article 5(8) of the Sixth Directive, as described in paragraph 23 above, also to accord special treatment to transfers of a totality of assets concomitant with the conclusion of a contract for lease of the business premises (see, to that effect, Zita Modes , paragraph 41).
32. It follows from the foregoing considerations that an overall assessment must be made of the factual circumstances of the transaction at issue in order to determine whether it is covered by the concept of the transfer of a totality of assets for the purposes of the Sixth Directive. In that context, particular importance must be attached to the nature of the economic activity which it is sought to continue.
34. Even if the economic activity at issue is one which cannot be carried out without business premises, it is not necessary, as a general rule, in order to ensure the continuation of the retail business transferred, for the owner of that business also to be the owner of the building within which it is operated.
36. Furthermore, where the continuation of the economic activity in question requires that the transferee use the same premises as were used by the transferor, there is no reason in principle why possession of those premises may not be transferred by means of a lease contract.
37. It is also necessary, in order for Article 5(8) of the Sixth Directive to apply, for the transferee to intend to operate the business, or the part of the undertaking, transferred and not simply to liquidate the activity concerned immediately and sell the stock, if any (see, to that effect, Zita Modes , paragraph 44).
38. In that regard, it follows from the Court’s case-law 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 (see, to that effect, Case 268/83 Rompelman  [1985] ECR 655, paragraph 24; Case C‑230/94 Enkler  [1996] ECR I‑4517, paragraph 24; Joined Cases C‑110/98 to C‑147/98 Gabalfrisa and Others [2000] ECR I‑1577, paragraph 47; and Case C‑84/09 X [2010] ECR I‑0000, paragraphs 47 and 51).
42. In that regard, it should be observed that 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, for the purposes of Article 5(8) of the Sixth Directive, given that they may have a bearing on that assessment if they might make it impossible to carry on the economic activity on a lasting basis.
43. However, the possibility of terminating a lease contract 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.
44. That interpretation is consistent with the principle of fiscal neutrality inherent in the common system of VAT. That principle precludes, inter alia, economic operators carrying out the same transactions from being treated differently in relation to the levying of that tax (see, inter alia, Case C‑216/97 Gregg  [1999] ECR I‑4947, paragraph 20, and Case C‑540/09 Skandinavska Enskilda Banken  [2011] ECR I‑0000, paragraph 36). It follows that that principle would not be respected if the possibility of applying Article 5(8) of the Sixth Directive to the transfer of a totality of assets, such as that at issue in the main proceedings, depended on the terms of the lease contract, and in particular on its duration and the procedure for terminating it.