ARTICLE · 27 JULY 2021

Quarterly Indirect Tax Update - July 2021

Grant Thornton

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Welcome to the latest edition of our Indirect Tax Quarterly Update which covers a range of topical international VAT issues which have an impact on both Irish and EU based businesses:

IrelandTax

Jarlath O'Keefe

Janette Maxwell

Creation of fixed establishments: Letting of property in EU countries in which staff are not present

A recent judgement issued by the Court of Justice of the European Union ("CJEU") stated that a business is required to have its own staff in order to create a fixed establishment for VAT purposes. The CJEU ruled that the concept of fixed establishment implies a minimum degree of stability derived from the permanent presence of both the human and technical resources necessary for the provision of given services.

Background to the decision

In this case, a company established in Jersey (Titanium) owned properties in Austria, which were being let. Titanium did not have any staff located in Austria and they appointed a real estate agent to manage the lettings. Titanium retained all decision-making powers to enter into and terminate leases, to determine the conditions of any of the tenancy agreements and to carry out all maintenance work with regard to the property.

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