Minister Finansów v Posnania Investment SA

Cathya Djanogly

In Minister Finansów v Posnania Investment SA (Case C-36/16) (11 May 2017) the CJEU found that the transfer of land in lieu of the payment of tax was not a transaction subject to VAT.

Posnania was a Polish company which carried out a real estate business. In order to discharge arrears of tax it had applied to transfer land to the municipality. It had then applied for a ruling to determine whether the transfer was subject to VAT. The question of whether such a transfer could be held to be a ‘supply of goods for consideration’ within the meaning of the principal VAT directive had been referred to the CJEU.

The CJEU found that there was no relationship entailing reciprocal performance. A tax was a compulsory charge which did not result in any performance by the authority. Consequently a transaction providing property in lieu of payment ...

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