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News - tax cases

14 May 2007
Categories: Tax cases
Velvet & Steel Immobilien und Handels GmbH v Finanzamt Hamburg-Eimsbuttel (Case C-455/05); SC Packaging v CRC; Mayflower Theatre Trust Ltd v CRC; UBS AG v CRC; Chiniah v Income Tax Commissioner

Taxable renovation

The claimant agreed to carry out renovation work on the buildings in two contracts for the sale of land. In return the claimant would receive part of the sums paid by the purchasers to the vendors. The issue arose over whether Article 13B(d)(2) of the Sixth Directive meant that the concept of the assumption of obligations excluded from the exemption non-pecuniary obligations such as an agreement to renovate a building.
The European Court of Justice ruled that the exemptions in Article 13 had to be interpreted strictly since they constituted exemptions from VAT. In this instance the wording did not support the inclusion of non-pecuniary obligations. An agreement to renovate a building was therefore subject to VAT.
Velvet & Steel Immobilien und Handels GmbH v Finanzamt Hamburg-Eimsbuttel (Case C-455/05) European Court of Justice 19 April 2007


Tax is due

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