In Mydibel SA v Etat Belge (Case C-201/18) (27 March 2019) the CJEU found that a sale and leaseback was a single transaction which therefore did not require an adjustment of input tax deducted on construction work.
Mydibel manufactured potato-based products. It had incurred input tax which it had deducted on the construction of two buildings in relation to which it had entered into sale and leaseback arrangements. The arrangements had been entered into to raise finance. The issue was whether this deduction was allowable given that the sale and leaseback transaction was exempt.
The CJEU observed that Mydibel used the relevant buildings for its economic activity and that while the sale and lease gave rise to an emphyteutic rent to be paid immediately to Mydibel the company also undertook to pay to the financial institutions concerned a quarterly rent during a 15-year period ...
90a1d87b-c1b5-43c3-a720-cd324830adee.tmb-editorspic.jpg?sfvrsn=1b2d0a7e_1)
