Keywords
Summary

Keywords

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Tax provisions ° Harmonization of laws ° Turnover taxes ° Common system of value added tax ° Exemptions provided for under the Sixth Directive ° Exemption for the letting of immovable property ° Definition ° Consideration paid for the surrender of a lease ° Included ° Tax demanded under the Member States' power to limit the scope of the exemption ° Not permissible

(Council Directive 77/388, Art. 13B(b))

Summary

The term "letting of immovable property" used in Article 13B(b) of the Sixth Directive (77/388) on the harmonization of the laws of the Member States relating to turnover taxes to define a transaction which is compulsorily exempt from VAT covers the case where a tenant, for consideration, surrenders his lease and returns the immovable property to his immediate landlord.

The same provision, which allows Member States to apply, in addition to the specified exceptions, further exclusions to the scope of the exemption for the letting of immovable property, does not authorize them to tax such consideration when the rent paid under the lease was exempt under the said rule. The relations created by a lease cannot be broken up.