Keywords
Summary

Keywords

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Economic activities for the purposes of Article 12 of Directive 2006/112 – Definition

(Council Directive 2006/112, Arts 9(1), 12(1) and 295(1)(3))

Summary

The supply of land designated for development must be regarded as subject to value added tax under the national legislation of a Member State if that Member State has availed itself of the option provided for by Article 12(1) of Directive 2006/112 on the common system of value added tax, irrespective of whether the transaction is carried out on a continuing basis or whether the person who effected the supply carries out an activity of a producer, a trader or a person supplying services, to the extent that that transaction does not constitute the mere exercise of the right of ownership by its holder.

A natural person who carried out an agricultural activity on land that was reclassified, following a change to urban management plans which occurred for reasons beyond his control, as land designated for development must not be regarded as a taxable person for value added tax for the purposes of Articles 9(1) and 12(1) of Directive 2006/112 when he begins to sell that land if those sales fall within the scope of the management of the private property of that person.

If, on the other hand, that person takes active steps, for the purpose of concluding those sales, to market property by mobilising resources similar to those deployed by a producer, a trader or a person supplying services within the meaning of the second subparagraph of Article 9(1) of Directive 2006/112, that person must be regarded as carrying out an ‘economic activity’ within the meaning of that article and must, therefore, be regarded as a taxable person for value added tax.

The fact that that person is a ‘flat-rate farmer’ within the meaning of Article 295(1)(3) of Directive 2006/112 is irrelevant in this respect.

(see para. 49, operative part)