«(Sixth VAT Directive – Article 5(8) – Transfer of a totality of assets – Continuation by the transferee in the same branch of business as the transferor – Legal authorisation to pursue the activity)»

Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Taxable amount – Supply of goods – Option for the Member States to exclude a transfer of a totality of assets or part thereof – Scope (Council Directive 77/388, Art. 5(8)) Article 5(8) of Sixth Directive 77/388 must be interpreted as meaning that when a Member State has made use of the option in the first sentence of that paragraph to consider that, for the purposes of value added tax, no supply of goods has taken place in the event of a transfer of a totality of assets, that no-supply rule applies ─ without prejudice to use of the possibility of restricting its application in the circumstances laid down in the second sentence of the same paragraph ─ to any transfer of a business or an independent part of an undertaking, including tangible elements and, as the case may be, intangible elements which, together, constitute an undertaking or a part of an undertaking capable of carrying on an independent economic activity. The transferee must however intend to operate the business or the part of the undertaking transferred and not simply to immediately liquidate the activity concerned and sell the stock, if any.On the other hand, nothing in the provision cited above requires that the transferee pursue prior to the transfer the same type of economic activity as the transferor.Further, the restriction by a Member State of the application of that no-supply rule to transfers of a totality of assets where the transferee holds the authorisation for the pursuit of the economic activity which that totality enables to be carried on infringes that provision.see paras 45-46, 55, operative part 1-2

JUDGMENT OF THE COURT (Fifth Chamber) 27 November 2003 (1)

((Sixth VAT Directive – Article 5(8) – Transfer of a totality of assets – Continuation by the transferee in the same branch of business as the transferor – Legal authorisation to pursue the activity))

In Case C-497/01,

REFERENCE to the Court under Article 234 EC by the Tribunal d'arrondissement de Luxembourg (Luxembourg) for a preliminary ruling in the proceedings pending before that court between

and

on the interpretation of Article 5(8) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes ─ Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 95/7/EC of 10 April 1995 amending Directive 77/388/EEC and introducing new simplification measures with regard to value added tax ─ scope of certain exemptions and practical arrangements for implementing them (OJ 1995 L 102, p. 18),

THE COURT (Fifth Chamber),,

composed of: P. Jann, acting for the President of the Fifth Chamber, D.A.O. Edward and S. von Bahr (Rapporteur), Judges,

Advocate General: F.G. Jacobs,

after considering the written observations submitted on behalf of:

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 26 September 2002,

gives the following

Community legislation

....

National legislation

The main proceedings and the questions referred for a preliminary ruling

Observations submitted to the Court

Findings of the Court

Observations submitted to the Court

Findings of the Court

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Tribunal d'arrondissement de Luxembourg by judgment of 19 December 2001, hereby rules:

Jann

Edward

von Bahr

Delivered in open court in Luxembourg on 27 November 2003.

R. Grass

V. Skouris

Registrar

President