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ARTICLE · 05 AUGUST 2021

No VAT Fixed Establishment For Buildings Rented Without Staff

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In June, the CJEU ruled on the concept of a fixed establishment for VAT purposes.

European UnionTax
Thibaut Boulangé
Thibaut Boulangé
Johen Djied
Johen Djied

OUR INSIGHTS AT A GLANCE

  • In June, the CJEU ruled on the concept of a fixed establishment for VAT purposes.
  • According to the CJEU, the existence of a mere building without any human resources enabling it to act independently does not qualify as a fixed establishment from a VAT perspective.
  • The CJEU clarified that having local staff members is part of the requirements to have a fixed establishment for VAT purposes.

In the decision C-931/19 published in June, the Court of Justice of the European Union ("CJEU") ruled that a foreign company does not have a fixed establishment for VAT purposes in a Member State if its activity is limited to the exploitation of a real estate without having any human resources locally to do so.

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