The tax authorities and tax courts generally deny input VAT deduction from procured consulting services for sales of shares not subject to VAT. In its judgment of 8 November 2018, in the case C&D Foods Aquisitions ApS (C-502/17), the ECJ reminds us that this does not always apply. If the sale of shares serves the economic activity of the taxable person or expands it, an input VAT deduction can be considered. This principle should also apply to other asset transfers not subject to VAT, e.g. supplies of real estate.

With a further ruling, the Federal Fiscal Court has clarified its case law on the transfer of a going concern. In the disputed case, only the inventory was sold. The business premises were not included. The Federal Fiscal Court was required to deal with the question of whether the isolated sale of the inventory constituted the transfer of a going concern, and was therefore outside the scope of VAT.

The Federal Fiscal Court confirms the ECJ’s decision in the legal case Stadium Amsterdam, according to which a partial application of a reduced VAT rate in the case of a single supply is found to be out of the question.