Supply of land which has not been built on EU VAT case law

3 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 2013 to 2021.

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Provisions these cases interpret most

Article 12 of Directive 2006/112/EC Taxable persons · 2 of these cases
Article 135 of Directive 2006/112/EC Exemptions for other activities · 2 of these cases
Article 392 of Directive 2006/112/EC Provisions common to Sections 1 and 2 · 1 of these cases

The 3 cases, most recent first

Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

C-299/20 Icade Promotion

Judgment · 30 September 2021 · France

Margin scheme on resale of building land

The margin scheme applies where acquisition bore non-deductible VAT, and also where no VAT was charged but the purchase price incorporated input VAT borne by the initial seller. Otherwise it does not apply to acquisitions outside the scope (for example from a private individual managing private assets) or exempt. It cannot apply where land not built on only becomes building land after purchase, but partitioning into lots and connection to grids and networks does not exclude it, provided the improvements are not themselves "buildings". For developers and land traders in Member States operating the Article 392 derogation, an acquisition is tested for embedded VAT and not merely for the absence of a deduction.

C-71/18 KPC Herning

Judgment · 4 September 2019 · Denmark

Sale of land with an existing building intended for demolition

A Member State may not classify such a supply as a supply of building land. Where the sale is economically independent of other services and does not form a single transaction with them, land carrying a building at the date of supply cannot be classified as building land, even if the parties intend total or partial demolition. Only objective circumstances, such as demolition undertaken or begun by the vendor and cost borne by the purchaser, can bind sale and demolition into a single supply of undeveloped land (Don Bosco). Relevant to developers, housing bodies and their advisers structuring brownfield and redevelopment deals.

C-543/11 Woningstichting Maasdriel

Judgment · 17 January 2013 · Netherlands

When demolished land becomes building land

The exemption does not apply where an overall assessment of the circumstances prevailing at the time of supply, including the parties' intention if supported by objective evidence, shows the land was in fact intended to be built on. Completed demolition by the vendor, or its undertaking to demolish with a view to future construction, is part of that objective evidence. The national definition of building land must cover all unbuilt land intended to support a building. Application is for the national court. Member State definitions of building land cannot be narrowed by formal criteria such as a requirement for post-demolition groundworks or a granted permit.